Investments play a very significant role in today's market; earning money is not enough. Every person works very hard for money, but that may not be adequate for him to lead a relaxed lifestyle or fulfill dreams and goals. So, a people should invest their funds smartly to get good income out of it.

Human being sentiments and actions also keep fluctuating based on many global and local factors. In these circumstances, a query starts in everyone's mind - whether to jump off the boat or to stay on path to be a part of the market. This shows that the peaks and troughs of market fluctuations will be ironed out or smoothed over as a result of invest on a regular basis over a long period. Market corrections are fairly regular and sign a healthy market cycle. So the question arise, how investor can defend itself from volatility. The answer to the question is invest steadily with patience and discipline.

I prefer fundamental approach to invest. In fundamentals, studying factors that can affect the stock's value, including macroeconomic factors (e.g. economy and industry conditions) and microeconomic factors (e.g. financial conditions and company management) is particularly very important. The idea is to spot primarily strong company or industry over essentially weak company or industry.

It is therefore significant to stay away from the noises (rumors) and focus on construction of portfolio along with managing risk to be a successful in

the long term. Individual Investors do not know anything about the outlook and have little idea when the market will correct or appreciate. They do not know how unexpectedly what can occur. All that an investor knows with a high degree of poise is that continuously over years, stock market investments will give huge returns, attached with great volatility.

Below is the table of Top Stocks of Nifty in term of Returns (5 Years).

The only way to use this grouping of huge returns and great instability is to keep investing constantly, regularly and gradually, without break.

While one could potentially argue that investing regularly will result in returns that are no better than average because you are buying some units when stock markets are down and some when the stock markets have gone up, Bowes counters that this could be considered a positive strategy. Now, it's your time to be smart and generate wealth.

Keep Investing & Stay Invested!

Pledging of shares has evolved as an important gauge of corporate governance in recent times. It essentially means taking loan against shares held. It helps promoters of a company to get loans to meet their business or personal requirements by keeping their shares as collateral with the lenders. It can be used to meet different requirements such as funds for working capital, funding other ventures, buy outs, acquisitions and settling personal obligations. Generally, promoter is the majority shareholder group that manages and is involved in the day-to-day dealings of a company. In the context of pledging of shares by a listed company, investors should find the answers of some questions such as why do promoters need to do pledge shares, strength of the balance sheet or financial position of the company, frequency of cash flow, usage of collateral fund. So, it is always worthwhile for investors to find out answers of all these questions before investing, since it may signify a cash crunch for the company or promoter's inability to raise further funds. Promoter pledges shares only when all other options of raising funds from the market got exhausted. It is the last recourse and raised by promoters only when the debt situation gets little fragile. Promoters pledging is a bit of red herring and red flag for investors.

Secondly, investors need to know how pledging of shares leads to fall in stock price. Usually the value of stock and value of collateral are directly proportionate to each other and when value of stock falls, lenders or financial institution ask promoters to bring in more collateral to maintain the loan-to-collateral value and if promoters are not able to do that lenders have prime right of enforcement and has right to sell shares and with that action, stock price falls more. Normally out of 10 times, 8 times

pledging has negative impact on the financial strength of the company and as per my point of view a pledge above 50% of promoter's holding really needs to be given weight while evaluating investment option in a stock. So what percentage of promoter's shareholding is pledged needs heed from investors. One more thing, it is not necessary that pledged shares is a bad thing, it may be a normal routine course of action by the promoters to fulfill the short term financial requirement of the company.

As an investor, one can find the details of pledged shares on the websites of the stock exchanges. SEBI has mandated that publicly listed companies need to disclose information on quarterly basis and hence, investors should count high on rising promoter pledges as an extra risk factor as when choosing stocks to invest.

Here are the names of few companies that are listed in F&O space and where promoters have pledged half or more of their holdings:

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US Yield curve inversion is now what global markets are talking about? Does the inversion really a better predictor of recession or simply exist due to bond market positioning. Ironically US Yield curve always remain centralized in global markets, although UK, Japan yield curve remain inverted for long time without facing recession in next one-two years. During 1980s when bond yield reflects the inflation expectations for longer term which motivates rate-setters to shape monetary policy. As time has changed so does the economy cycle and thus the direction of bond yields.

What makes US yield curve so important and how Dollar behaves under inversion.

Mathematically Yield curve inversion defined when yield of shorter tenure rises over longer dated and most of the time it precedes recession. But in 21st century, Central Bank usually influenced shorter tenure yield by managing short term interest rate and let market decides about long term. Policy setters benchmarked inflation and other growth parameters to decide interest rate for short term, so does the relationship between shorter-dated bonds yield and interest rate and further economic outlook established. The myth is involved in understanding longer dated yield. Admittedly US 10 year yield is a global benchmark for global bond markets. Decomposing 10-Y yield gives rise to the importance of real yield as Investor park money in longer tenure to earn an extra yield. The real yield inversion should be a matter of priority. Precisely movement of long term yield is highly mattered to understand the yield curve inversion. US 10 year yield hardly project inflation expectations in US as the CPI basket includes more than 40

percent of non-market parameters (education, rent, etc..) which is not discovered by market dynamics – a big flaw in the monetary policy. During Quantitative easing, Central Banks pushed to buy bonds (preferably US 10 year bonds – US Yield curve is matter of attention) which in-turn suppressed yield to a lower value. During Global financial crisis in 2008, it's the Central Bank which pushes the yield curve inverted.

Recently US Yield curve - 10 Y/3M has dipped below zero as shown from the chart above by Capital Economics since GFC (Global Financial Crisis) after dovish stance from Federal Reserve and thus consensus of markets that recession is heading in US economy over the next few years established. To challenge this consensus, if we look into the US Treasury curve, shorter end (3M) is barely justified to claim the economy health relative to longer duration (10 Y). At the same point of time if we look into the curve of 30Y/10Y spread which largely gives a broader picture of the economy. It boasts steepen or flat curve and never fell into inversion.

Currency which deals relative world performances signify that Dollar strength will remain neutral over G10 currencies as other developed markets are fading and most of the central banks are turning to dovish regime. Global bond yield will likely to remain low in 2019 and will stay at lower levels in 2020 as well. US 10 Year yield likely to touch sub 2.25 (presently 2.40). EM currencies where yield are high will be largely beneficial due to relative yield differences over the coming two years.

The study referred as “wave theory” or “Five wave principle” was discovered by Ralph Nelson Elliott which was formally published on August 31, 1938 written by Charles J. Collins is often misunderstood among majority of market participants which make them difficult to understand or apply this theory to project future prices. Here, the difference is that one makes his/her own assumptions while making forecast and ignoring the basic rules outlined by R.N. Elliott in his writings. “Elliott wave theory” is often referred as “EWT” in this excerpt.

Markets can continue to move upwards for indefinite period of time even in corrective structures. Elliott has marked the up/down moves in asset prices either in impulsive or corrective structures. The impulse wave is often mistaken as uptrend which is not true. A double or triple three corrective structure could take markets upwards for indefinite period of time. Another combination of double and triple three's could take prices further higher.

Elliott wave analysis is not about trading the tops and bottoms.A market participant who makes a couple of forecasts correct starts to assume the development of holy grail system and trades on the next predicted top or bottom which eventually wipes off the complete capital of the trader. This made me to come to a conclusion that R.N. Elliott has never mentioned anywhere to sell at the exact top or buy at the exact bottom which always seems fascinating to the trader. A trend following system “Dow Theory” should rather be used to enter into a trade. The

study helps in projecting probable top or bottom which warns the trader not to enter the market towards wrong direction. Also, there are points of failure/termination which brings to the conclusion that top/bottom has been formed which is often not mentioned in various available material on Elliott wave principle.

Impulsive/Motive waves are often confused with uptrend. . An uptrend is defined as the formation of higher highs and higher lows. In its early career of research on financial markets, R. N. Elliott respected and followed the publications of Robert Rhea on Dow Theory which is all about trend following. Many students of EWT gets confused that impulse waves always form in upwards direction and corrections in downwards direction which makes the case that markets will always and continue to move upwards. The direction of impulsive waves can be on the downside so as for corrective structures.

A second rise after a correction is most often not a third wave. There are certain rules mentioned by R. N. Elliott while introducing EWT to the world. And, many books on the principle have listed the importance of wave third which is the most powerful in impulsive structure and gives highest profits if captured correctly. This grabs immediate and highest attention by traders which should be avoided. The rule of minimum of 161.8% extension of wave 1 should always be used to identify the move as third wave. There are various other parameters needed like finding the sub-division of first wave in the sequence to know the nature of the wave.

One final advice from my side to end this excerpt, I have hardly seen any motive structures in an uptrend of the highest degree which makes any asset class to rise forever. Majority of moves that exist in the form of impulsive structures eventually form the part of a corrective structure larger degree.