Well none of us know what next…but let us look at the crystal ball:

– we are at 16,200 on the sensex as I write this post. Do not rule out a 25% jump in about 12 months time – which is more than 3 years yield in the debt market.

– we all knew that there were scams. Some have come out, many have not yet. The arrest of Jagmohan Reddy has to be for Congress the negotiate the splitting of the 5-6000 crores that JR must be sitting on.

– a scam eruption HAS to by definition bring the markets down – as an acknowledgment of the eruption.

– markets could remain low / lower for 5-7 months. On the other hand it could scream to a high of 20,000 in 5 months. Do not look for logic in the short term. It does not exist.

– realty, infra, have been really hammered down, so the rise could be the fastest there.

-psu shares have also been beaten down, recovery could be good, but beware of the rogue promoter. The rogue promoter has also an arm called SEBI which says that all promoter holdings have to come below 75%. Now if Ongc, Ntpc, Nhpc, Coal India…were all to do it, the market would be flooded. Such a tap opening actually reduces the prospect of appreciation. Having said that Nhpc at 18 Rs. cannot be too great a risk, esp if the dividend yield is about 3.5%…

– interest rates will peak out say at 12% at retail level. At that stage invest in INCOME FUNDS OR GILT funds, hoping to benefit from a falling interest rate.

continue your SIPs

– if you hold pivotals (read Reliance, Hdfc, SBI, L&T, hdfc bank, Colgate, …etc.) bought at higher prices, average. Not because these are great shares (caveat I do not like RiL, L&T or Sbi – but I do have a few of them directly, and some more through mf holdings)

if you have bought some duds which are speculative in nature (you know them dont you?)..sell on rallies…

if in doubt put money in an index fund

if u are not insured take term insurance – the cheapest will also pay. However take it only from a company that you TRUST…

caveat: have given these shares just as an example..it could have read Tata Motor (dvr), TCS, Gillette, Oracle, Divis laboratories – i have these too 🙂 so caveat again.