Currently long-term investors have started playing a dangerous game wherein they are selling mutual funds to buy shares. The idea is not bad, but the market condition is wrong. The transaction is selling something which is high to buy something which is higher. Investors are not getting any bargain. In fact they are selling a low risk asset to buy a high risk asset. It is like getting down from bus and sitting on a sports bike on a wet and slippery road. Most investors have started comparing mutual fund returns with individual stock returns which is wrong. One cannot compare fruit salad with mango. Mutual funds are portfolios which try to optimize returns by diversifying risk. When you look at standard deviation (which no one does) of individual stock against that of mutual fund, the standard deviation of mutual funds is much lower as compared to that of stocks (standard deviation is a measure of risk)
I would like to advise this community of investors to avoid this dangerous game. Have clearly differentiate fund allocation between stocks and mutual funds. Money set aside for stocks must not flow into mutual funds and money allocated to mutual funds must not flow into stocks. Those feeling stocks are born to rise and bluechip companies are there forever please have a look at the below table. The below stocks were investor’s darling and everyone wanted to own them.
Sr. No. |
Name of stock |
Highest to lowest price |
1 |
Aban offshore |
5400 to 35.40 |
2 |
Adlabs |
207 to 4.5 |
3 |
Alok Ind |
105 to 3.80 |
4 |
Atlanta |
270 to 9.30 |
5 |
Bartronics |
255 to 3.90 |
6 |
Central Bank |
210 to 22 |
7 |
Cox & King |
367 to 62.70 |
8 |
DHFL |
690 to 62.90 |
9 |
Dolphin offshore |
445 to 29.40 |
10 |
Educomp |
1100 to 1.50 |
11 |
Eros Int |
643 to 25.80 |
12 |
Gati |
290 to 57 |
13 |
GMR Infra |
124 to 14.80 |
14 |
Goa Carbon |
1185 to 340 |
15 |
GTPL |
180 to 58 |
16 |
HDIL |
1100 to 14.50 |
17 |
HEG |
4500 to 1320 |
18 |
Hotel leela |
85 to 7.55 |
19 |
IFCI |
114 to 7.65 |
20 |
ILFS |
308 to 3.10 |
21 |
IRB INFRA |
310 to 93 |
22 |
J&K Bank |
176 to 34.70 |
23 |
Jain Irrigation |
264 to 25 |
24 |
Jet Airways |
883 to 33 |
25 |
JP Associates |
339 to 2.70 |
26 |
JP Infra |
100 to 1.60 |
27 |
JP Power |
140 to 1.90 |
28 |
kohinoor food |
136 to 16.30 |
29 |
Kwality |
225to 2.45 |
30 |
LEEL Electricals |
340 to 7.30 |
31 |
Lovable lingerie |
612 to 69 |
32 |
Manpasand beverages |
500 to 28 |
33 |
Mcleod Russel |
325 to 18.85 |
34 |
MTNL |
217 to 7.60 |
35 |
Oil Country |
172 to 5.90 |
36 |
On mobile |
361 to 31.15 |
37 |
PC jewellers |
600 to 45 |
38 |
Punj Llyod |
580 to 1.25 |
39 |
R COM |
800 to 1.45 |
40 |
R NAVAL |
117 to 3 |
41 |
Rel Capital |
2924 to 62 |
42 |
Rel Power |
430 to 4.15 |
43 |
Reliance Infra |
2500 to 42.70 |
44 |
Rolta |
375 to 5.45 |
45 |
RS Software |
400 to 20.75 |
46 |
Shree Renuka Sugar |
120 to 9 |
47 |
Sintex Plastic Tech |
120 to 8 |
48 |
Snowman logist |
130 to 29.50 |
49 |
Subex |
725 to 5.80 |
50 |
Suzlon |
400 to 3.35 |
51 |
Uttam Galva |
172 to 7.55 |
52 |
Vakrangee |
515 to 31 |
53 |
Varroc Engineers |
1151 to 450 |
54 |
Videocon |
760 to 1.70 |
55 |
VIP Clothing |
100 to 11.70 |
56 |
Vodafone Idea |
118 to 11.35 |
57 |
Windsor machines |
150 to 25.10 |
58 |
Jet Airways |
883 to 33 |
59 |
Mercator |
165 to 1.65 |
60 |
Patel Eng |
1020 to 18.80 |
Avoid the trap of selling low risk moderate return asset for high risk high return asset. The day market corrects you will not get a chance to sell even a single share of few low quality stocks.