Once you have made your Direct Equity investments in the companies you have selected, you cannot afford to simply forget about your investments and hope that someday, when you need the money and you check on your investments, they would have significantly risen in value. Companies go through business cycles of ups and downs, which affect their share prices. Not only this, companies also go through mergers, acquisitions, changes in managements, new business developments, etc., all of which affect their stock prices for the better or worse. You need to periodically monitor your Direct Equity performance.
In addition to assessing the company’s performance, you need to keep track of developments in the economy since this affects the businesses of all corporates. For instance, in a year when the monsoons are good, companies’ businesses show a positive impact, especially those directly affected by the monsoons. This is especially true for investors in Direct Equity investments, where market cycles can impact returns.
With India becoming an integral part of the global economy, most companies are impacted by global developments. For instance, if the US raises or lowers the Fed rates, the impact is felt in our country, too. Similarly, if countries lower or increase their import quotas, our exporting companies are impacted. This implies the need to keep track of global market developments, which is crucial for anyone holding Direct Equity or planning future Direct Equity investments.
Information on the economy and news on the global markets are available in daily business publications and websites of foreign business publications, helping investors in Direct Equity make informed decisions.
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