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  • Category: Computers

    Whether I should hold or quit the shares

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    I am a Jharkhand govt employee and going to retire in June-19. Recently I have started thinking of shares and stock markets.
    I have bought last month 4000 shares of GITANJALI GEM @ Rs. 82.01 on my self research and study. Recently this share came suddenly down and todays (19-1-18) price is Rs. 68.40 . Since I am new in this area, I need your opinion that whether I should wait or quit?
    I can wait if waiting would be favorable because today I am suspicious about the behavior of this share.
    Can I get advice?
  • Answers

    2 Answers found.
  • The one year high and low of this share are 104.40 and 53.00, respectively, in NSE. Today's maximum and minimum price of this share in NSE are 69.45 and 67.55. The closing price in NSE is 67.75 showing a very marginal increase.

    You have purchased 4000 shares @ Rs. 82.01/-. So, it is evident that you purchased the share at higher side. Now, the share is on the downward journey. So, what are the options available to you?

    (a) You can purchase some more shares of the company when it reaches below 63 for averaging and wait patiently for around one year. It can be stated that the script has the potential of reaching at least Rs. 90/- in a year, with some impetus during the budget.
    (b) You can book loss and invest the amount in a good quality mutual fund.

    I would advise you to buy some more shares of the company at lower range and wait for one year or so, before selling. You will get a marginal profit.

    I would also advise you that if you don't understand share market, then don't invest your valuable retirement corpus in share market by listening to others' advice. Instead invest in a good quality balanced mutual fund and stay invested for five years or more.

    Come on, have a fight. Don't shoot and scoot.

  • If you look at the 5 year chart of Gitanjali Gems the price has fallen from 650 in April 2013 to 30 rupees in Feb 2016. Then it slowly picked up. From April 2017 to October 2017, its main promoters value fell by 91%. This should have raised alarm bells in your mind. Apart from Government regulations on gold import, demonetization, the company also had issues with SEBI.

    So, the options would be waiting. The market is at the peak and your share is falling. If you can hold on, then don't quit now.
    Please follow the daily trend, Every lower circuit equal to a 5% fall, the day you see a reversal in the trend, then you can start averaging. A lot of people would advise averaging, but don't average in one shot. Start averaging in a step wise manner, you can keep adding in small lots of 10% (400) each time to spread out your risk.

    The other option would be to book a loss ( you would lose around 56-58K) and then invest in a well-performing hybrid MF and then invest with a 2-4 year horizon. If have any other holdings that are giving good profit you can book profit on them and use it to equalize the taxation on short term gains. So, there are many thing you can consider. Do you have a portfolio manager, if so then have a chat with him?

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