How can I know in advance if foreign investors are about to pull money out from Indian stock market?
There is a large chunk of money in Indian stock market, which are pushed by investors from foreign investment companies. Is there a way by which we can know if foreign investors are about to sell huge numbers of stock for any XYZ reason?
The fundamental reason underlying your question is the concern about the potential steep fall in stock prices when foreign investors pull their money out from Indian stock markets. If you dig deeper you will discover that the question/ concern stems from other fundamental reasons, as follows:
- Investing in stocks really not intimately knowing the companies, their business models and their true value.
- Investing in stocks at very high valuations not knowing their intrinsic value.
- Investing in stocks presuming that returns from stock markets accrue only from increase in stock prices and if prices fall, investments will generate losses.
- Investing in stocks for short term, again with an intention of making a profit from price fluctuations.
However the problem is that nobody can predict reliably when they might do so.
While I may not be able to provide solace by reliably predicting when foreign investors may pullout their money from the Indian stock markets, I can surely show you a way:
- How you can be a happy investor not worried about when foreign investors are likely to pull their money out.
- How to invest safely and profitably in every market situation - both bull and bear markets.
- How instead of attempting to predict the unpredictable, you can simply react to the markets.
- And finally, how to surely make significant riches out of stock markets.
This sure and safe path is called ‘Value Investing’.
Buy a copy of the book, ‘The Intelligent Investor’ by Benjamin Graham. It is a masterpiece, Warren Buffett cherishes till date.
Read following articles that may completely change your attitude to investing:
- Miracle of Compounding
- Risk Comes from Not Knowing What You are Doing
- You Only Find Out Who is Swimming Naked When The Tide Goes Out
- Margin of Safety
- How to Calculate the Intrinsic Value Shares?
To conclude, it is not possible to reliably predict when foreign investors are likely to pull their money out, but certainly possible to overcome the underlying concerns behind the question and profit form the stock markets.
With Best Regards,