Investing in 2009: ALL your questions answered

It's been a bad year across asset classes, whether one bought into a commodity or a stock or the stock market.

 

It was one where the Sensex started off with the market close to 21,000 and before closing, crashed almost 50%. Global markets came off a whole lot as well - which can be a little comforting.

 

Here's a guide on what you should prepare yourself for in 2009, whatever be the space you want to look for. If you want to look at a mutual fund or you want to look at the equity market or with commodities or a call on home loans or any kind of loan next year, what should you expect from rates?

 

CNBC-TV18's show Classroom gets together the experts to answer the tough questions - relating to equities, bond markets, mutual funds and commodities. Also watch the accompanying video.

 

On how an investor could go about trading in 2009, CNBC-TV18's Managing Editor Udayan Mukherjee said, "My approach in 2009 till the market tells you that it has begun trending once again - which it has not at the end of 2008 - is to try and take away 15-20% whenever the market is giving you and then preserve your gunpowder for a better day."

 

"The prudent approach from an equity mutual fund investor's point of view, then, would be to buy at low levels for the market," Mukherjee said, adding, "So, the one thing that you have to tell yourself is: you cannot time the market perfectly, but you know that the market in 2008 had gone and visited 7,500. So, you keep that as a ballpark figure saying those are the lows. I will buy close to the lows."

 

Dr CK Narayan of ICICI Securities advises a careful approach while selecting a stop-loss. "It [the stop-loss] should be meaningful to the amount of money that you have. There is no point in having a 5-15% stop because it will blow you out in three trades and all your money is gone. So, have it realistic aligned to the capital, make it 1%-2% at the most, so that you will be alive to take more trades and hopefully make more profits."

 

CNBC-TV18's Anichya Shah, on bear market lessons to be learnt in 2008, said, "To quote Warren Buffet: look at market fluctuations as your friend rather than your enemy. Profit from the folly rather than participate in it." He added, "Do not fear this 50% sell-off and look for opportunities. Having said that, traditional valuation tools like price-to-earnings, price/earnings-to-growth or PEG, EV/EBIDTA may not work effectively in a bear market when the earnings component is not known. Core balance sheet stripping is the only way to go."

 

On what one could expect from bonds in 2009, CNBC-TV18's Banking Editor Latha Venkatesh said, "You are going to see a goodish amount of money going into bonds. The 10-year yield, which is now at 6% or thereabouts, can easily go towards the 5% mark. If the repo rate goes to 4%, then actually piercing the 5% is also not ruled out and all this could happen even as early as in the first quarter."

 

Crude - as also other commodities - stood out for its dramatic rise and subsequent fall through the course of the year. CNBC-TV18's Commodities Editor Manisha Gupta said, "You might be in for a supply shock for most part of 2009, the second half for sure, and that is when you would see support coming for prices. USD 40 per barrel or below should be a good strategy to start accumulating in crude."

 

CNBC-TV18's National Editor Vivek Law said 2009 would not be the year for FMPs (fixed maturity plans). "As far as debt mutual funds are concerned, it may be one good place to look at because over the next year, chances are that you are going to get pretty decent returns there."

 

Read on to know more...