Market Guru in talk with RJ Salil Acharya of Radio City: Sovereign Gold Bond scheme is the best method to invest in Gold

Anil Singhvi, Managing Editor, Zee Business, says, the ongoing correction is a time-wise correction more than the price-wise correction and this is a time when one should focus on stocks and sectors instead of the indexes. During a candid radio chat with RJ Salil Acharya, Radio City, 91.1 FM, Mumbai, Mr Singhvi said, given the market conditions, 15% correction is a healthy correction in the stocks, and you can add the stocks if you get a 12-15% correction in them.

Starting the radio chat RJ Salil said, there is a slight sluggishness in the market at the moment and the market is falling heavily and has lost around 600-800 points. Do you think that this is a correction – a long correction - for which we were waiting for? To which Mr Singhvi said, this is time-wise correction more than the price-wise correction. And the major reason is that this is the month of March, which is an end time, so people are not in a mood to make new trades and are in a mood to end their positions. From April, the action will be seen returning. You can see slight sluggishness and weakness not only in our market but also in the global market. However, it is not a big weakness and there is not even a big boom. It is possible, the market will remain range-bound for the next two weeks and will spend time in the range of 500-700 up or down. So instead of looking towards the indexes, one should focus on stocks and sectors, actions will be seen there. 

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In his next question, RJ Salil asked, do you think that people who have stocks like banks and Shree cement in their portfolio should add those stocks in their portfolio or should invest in something else? What do you suggest? Mr Singhvi in his reply said, the good stocks that you have, and they have shown correction of around 10-15% then you should add them. To which RJ Salil said, then the thumb rule is that if there is a fall of 10% then one can average it. Is this the rule? And, Mr Singhvi said, it is not a thumb rule but given the kind of market, a 15% correction is a healthy correction in the stocks. Because a correction of 8-10% in the index is considered a healthy correction and a correction of 15% in stocks are considered healthy and they should be repurchased from that level. So, looking at the current environment, if you get a correction of 12-15% then add it. There is nothing to worry about. 

Continuing the radio chat further, RJ Salil said, Gold is being talked and you have suggested 45,000-46,000 levels and they have been achieved. So, let us know the way to buy the metal, Gold, in the case when you just want to trade and don’t want to make gold jewellery? Mr Singhvi said, there are two ways, firstly, from Rs 44,000-45,000 buy 20-20% gold on every thousand rupees, i.e. buy 20% when it comes to Rs 43,000, again 20% when it comes to 42,000 and so on. If you want to buy gold from an investment perspective then do not go and buy gold, gold bars and gold coins. The government brings a sovereign gold bond scheme every month and you get an interest of 2.50% on it plus whatever fluctuation is there in the price of the gold. It is a scheme of 8 years and you can renew it after five years and it is available for a maximum of 8 years. Interestingly, you will get the gold in the Demat form and you will also get 2.50% interest. Now, as you have bought gold and kept it in your locker, it will not grow and will remain as it is. But if you invest in the gold bond scheme then you will get 2.50% extra interest in it and you also get the appreciation of increased gold price. So, the government’s Sovereign Gold Bond scheme is the best method to buy and invest in gold. Generally, it is launched at the end or start of the month and then this is the time when you can invest, and this is the best process.