Staggered Investment Approach: A complete Guide – Religare

Investors should try to stagger investments into equity markets


Markets are sometimes driven by sentiments and today one of those times. Hope has trumped fundamentals. The National Democratic Alliance has received clear majority in the elections and the Modi wave has catapulted the BJP securely to power. The allocation of ministerial portfolios is also done and there are no allies to please. This makes for a strong government which can take big decisions quickly, at least during its honeymoon period over the next 12 months.

With political risk blown away, a shrinking CAD and our emergence as an emerging markets sweet-spot, any step to revive the economy, draft business-friendly policies and follow general good governance will result in across-the-board increase in share prices. In fact, our best-case target for the S&P BSE Sensex for March 2015 is 32,000.

Given the initial determination and articulation on policy from the new government, we believe that the economy will perform better going ahead. So it makes sense to invest in companies that earn more from domestic sales. In any case, we recommend buying only quality stocks and that too with a long-term investment horizon.

Since the markets are at their all-time high, investors should invest in a staggered manner only in fundamentally strong stocks taking the benefit of any possible dip.

Yes, India is in a bull market and this is probably going to continue. There will be corrections along the way and there will be disappointments, as India still has problems in the economy. But at the end of the day, it will continue to have a very bullish market. The S&P BSE Sensex is trading over 15 times its forward earnings. Are valuations expensive? Perhaps the earnings growth has not been as good as it should be. But with reforms, those earnings numbers and estimates will be revised. Valuations may get stretched. So we have to be careful and make course corrections as markets correct. One must also remember that there has to be revision of those earnings estimates in view of the reforms that are planned for the economy. It’s a bull market and it will continue. The budget is also around the corner and hopes are high.

Buy low, sell high. This has been a timeless (and fairly pointless) advice given to investors by all and sundry. In fact, the reverse usually happens as one doesn’t buy low due to fear that prices will trend lower and one definitely doesn’t sell at a high because of unending greed that the markets and specially your stocks will continue upwards endlessly. Today is yet another time when investors wonder whether it is still safe to make a safe entry into markets and which part of the cycle the markets are in.

Over the years, the resilience and optimism of Indian investors has been quite amazing. Every bull-run has been sharp and swift, and full of opportunities. Right from Harshad Mehta’s infamous 1991 episode to 1994 when the FIIs came in to the dot com boom in 2000 and then the last, long global bull-run from 2004 right up to January 2008, the opportunities were as clear as the writing on the wall just before decline. But it is difficult not to be blinded by the relentless hype. The question on everybody’s lips is: How long will this bull-run last? Well, nobody really knows how long but I advise you to buy but don’t borrow money and buy, not in this or any other bull-run.

Many investors are still skeptical and feel there is too much smoke and no substance in this rally. For them, I recommend unending systematic monthly investments into Sensex or Nifty. Trust your gut and safely bet on India. Due to a likelihood of the rupee appreciating as well as confidence in companies with sales within a resurgent India, investors can reduce investments made in IT companies and convert to private banks, cement, FMCG and energy stocks. Till we see some real action, infrastructure too remains on the back-burner.

While the indices have run up quickly and substantially, stock specific movements continue with renewed interest from retail investors. In fact, investors should use this rally to exit weak counters they held on to during the just-ended bear market and convert to top quality stocks.

Benefits of Online Stock Trading – Religare

Benefits of Online Trading Platform - Get the power of online trading


Online trading has redefined the contours of broking in more ways than one. It has brought about transparency in an otherwise opaque industry. It has made the entire order chain from order placement to confirmation to demat credit absolutely seamless. But above all it has empowered the retail investor like never before. With information and action at the tips of her fingers, online is a natural choice.

Get the Power of Online Trading

For those of us who have seen the pain of offline trading, the downsides were numerous. You placed an order and you could never be sure that you would get the best price for your order. More often than not, the dealer would prioritize your order based on your past relationship and brokerage revenue. A small investor was typically at a disadvantage in the broking game.

Online trading makes sense for a variety of reasons. Firstly, the investor is perfectly aware at what price the order can be placed and in what quantity. Secondly, online trading has created a democratic market place because what you see on the screen is largely what you get. The age-old risk of the dealer not operating in your interest is substantially, if not entirely, eliminated.

The biggest advantage of online trading is that it integrates 3 critical components of any trader’s interaction viz. banking funds, trading engine and demat holdings. The link between 3 components becomes virtually seamless in online trading. An investor is able to allocate funds of his choice, trade at the time and price of his choice and be rest assured that the demat credit comes on T+2 day.


A major cost saving for brokers…

No two opinions about that. Whether you run branches or franchises, the direct and indirect costs of establishing and maintaining the structure is huge. It also takes away your flexibility. Online trading saves the broker these blushes!

Easier risk management is enabled…

In online trading the discretion at a branch level or region level is largely absent. Since all the trades and orders are online, the broker has a measure of risk exposure at any point of time. Makes risk management a lot easier.

In online trading the discretion at a branch level or region level is largely absent. Since all the trades and orders are online, the broker has a measure of risk exposure at any point of time. Makes risk management a lot easier.

More of a one-time investment…

Unlike the offline model which is resource intensive, the online model is a one-time investment. Subsequently, the maintenance and support costs are substantially lower than the offline model. A sure kicker for ROI!

“Online Trading rewards scale by trading higher up-front costs with lower marginal costs” – John Katzman


  1. Always use your private PC or laptop only to trade. Ensure that your internet connection is secured and not an unsecured Wi-Fi connection. Remember, when you trade on a random PC or on an unsecured connection you are compromising your bank account, trading account and demat account.
  2. Every online trading portal gives you sufficient information and tools to do your research. Make the best of it. You can use your broker’s recommendation as a starting point. Try to ratify with your own research before taking a buy or sell decision on any stock. That is the real power of online trading.
  3. Your online trading facility gives you direct access to the availability of any stock at various price points. Don’t simply jump into a market order. Observe the market for some time to get cues on the demand pattern. If you see weakness in a stock, try to buy at a lower price. Online trading empowers you to do that.
  4. Most online brokers give you live news and corporate announcements during trading hours. Make the best of it. More often than not, tracking this info helps you to decide on your existing investments and trading positions. Over a period of time you will realize that it is fairly easy.
  5. Keep a tab on your online trading statements and your contract notes to ensure that you are getting stocks at the price you want. Always cross check that order cancellations are actually implemented by the system. Also ensure that you get demat credits of your purchases latest by T+3 day.
  6. Most online trading portals also permit you to create portfolios online and also take stock of your capital gains / losses over a period of time. This is useful to identify if your trading activity is profitable over a period of time. Use this feature extensively and regularly to modify your strategy, if necessary.


An old broker friend once rightly said, “Online trading does not make you rich. But it surely saves you from becoming a sucker”. Back in the late 90s, the spread of online broking was helped by 2 major factors viz. dematerialized ownership and online banking. The spread of personal PCs and laptops only accentuated this trend towards online broking. That was the first phase of growth in online broking.

We are now at the beginning of the second phase of growth in online trading. The hardware has now shifted from being a PC / laptop to the more nimble Smartphone and notepads. Faster internet connections, broadband and Wi-Fi have ensured that it is almost possible to trade from anywhere without compromising security. Additionally, stiffer competition among brokers is forcing more retail investors to be migrated to the online platform. If anything, it will be for the benefit of retail investors.


The bottom-line is that online trading empowers retail investors like never before. As a customer you do not have to worry about being discriminated by the dealer for the size of your trading volumes. You can do the research, decide the price, decide the quantity and execute the entire transaction end-to-end from the comfort of your home or office. This empowerment is critical because it not only opens up a wide market for equities, but also ensures easy on-boarding of customers into equities.

Over the last many years, the broking industry in India has gone through a variety of crises. The biggest refrain has been the doubts in the minds of retail investors that they were not getting a fair deal in the equity markets. Not any longer. Online trading has ensured that the retail investor is empowered like never before. It is the future of equity market trading. It is also a golden opportunity for investors to take full control over their trading performance. The customer may finally be the king!