Some blue chips down 50%, should you invest?
12 Feb 2016
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The S&P BSE Sensex nosedived a little over 20 per cent in last 12 months, while as many as 11 of the top 100 stocks on the BSE wiped out over 50 per cent of investors wealth in the same period.

Stocks from the S&P BSE100 index, which have fallen over 50 per cent in last 12 months, include Vedanta (down 70 per cent), Hindalco (down 57%), Aditya Birla Nuvo (down 56%),

PNB (down 54%), Tata Motors (down 50%), SAILBSE -5.97 % (down 50.8%), and Cairn India (down 54%).

Can you create wealth from these stocks?

Most experts said the latest correction is more technical in nature and as the global situation stabilises, the Indian market will be the first one to bounce back and high beta plays would lead the gain.

It is not a gloom and doom situation for India, per se. But yes, investors should not go and buy everything just because most of it is cheap. Instead they should select companies that have better earnings visibility, that are linked to government reforms push, stable management, and have low debt levels, preferably debt free.

Global volatility is something which investors have to deal with at least for some more time before the markets stabilise. Double-digit returns on stocks will be hard to come by in the short-term and investors should keep a minimum time horizon of two to three years.