Time to get your asset allocation right

Quick Edit:

The power of hoarding is such that it can actually make you believe that the manipulated price that gets thrown up is for real. Once the power to hoard goes, the price will simple fall. This truth is universal. Wealth is mostly lost because we believe that hoarding is for real. Every bubble, be it in equity, realty or gold or for that matter in anything, caused losses, grief and sorrow to those who placed trust in hoarding. Yet, time and again, we repeat the folly of believing hoarding to be real. The arguments we make up in support of our irrational belief will simply fail under the power of supply. One thing is for sure. Supply always breaks the back of hoarding. Realty is currently under the hoarder’s spell. Buyers beware.

Invest Speak:

If you wondered how stock prices of newly listed companies rise swiftly in the first few days of trade only to fall after a week, the answer lies in circular trading. This age old trick involves a band of stock brokers indulging in huge trading among themselves. No shares get delivered and huge quantities of shares of the company are merely bought and sold among a select few. This buying and selling is done in a way that prices are raised swiftly to draw the attention of the market .A perception of an actively traded stock is built and market attention falls on the company. At this point, gullible traders and small investors rush in to buy these stocks and the brokers start to distribute their own holdings among the gullible investors while creating a euphoric rise in prices through circular trading. Once the shares are distributed at high prices on gullible buyers, the prices begin to fall as the brokers lay off at the end of the operation. Circular trading dupes investors, enriches insiders and creates loss of confidence.

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