When the Sensex swings wildly from day to day, and when the RBI and the Government takes measures to fight the liquidity crunch by cutting down Cash Reserve Ratio and decreasing the interest rates, a common Indian is bound to have questions.

Is it a good time to buy ? Do you think that stock prices will fall even further ? Sensex has taken a big hit, it has lost nearly 50% from its year’s highs – do you think this will continue or will it stop?

Our gut feel is that for long-term investors, now it is an outstanding time to buy. We can’t tell you where the market is going in the short-run. But definitely can assess an opportunity for the future. Unless you need to pull cash out of your account in a big way over the next couple of years, you should be buying.

Specifically, best-of-breed operators with healthy cash flows and strong balance sheets.

There are some outstanding, low-risk values out there today. Blue chips like Reliance Industries, Infosys, Reliance Communications, DLF, L&T, ICSA, Satyam Computers etc boast safe, sizable dividends that will pay you while you wait for the market to turn.

Why settle for a 6% yield when you could lock in a better yield on a blue chip with tremendous upside? It is difficult to believe that these blue chips will not give you more returns than an average Fixed Deposit over a 5 year period.

It takes nerves of steel to buy in this market, but remember that no great investor ever made their fortune buying high and selling low.

So keep making those buying decisions and resist the urge to stash your cash under your mattress. Years from now, when you look back on the decisions you made about your investments, you’ll be very glad you did.

Remember the old saying

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