Stock Trading Strategies: 10 Key Points for Budget Season

Akat Sastav advises traders not to overtrade during budget, focus on undervalued stocks, and prepare for high market volatility.

### Key Points for Trading the Budget
* 💰 Don't try to make up for missed opportunities, as the budget is based on **previous interim budgets and clear government direction**.
* 📊 High volatility is expected in the Indian markets due to the country's **high debt-to-GDP ratio**.
* 📉 Avoid overtrading during the budget, as stop losses can be triggered **below expected levels** in volatile markets.
* 💵 Maintain a **20% cash allocation** in your portfolio to take advantage of potential market dips, as historical data shows frequent **10% corrections**.
* 📈 Buy the market at support levels, starting at the **first support line** and adjusting your portfolio accordingly.
* 🔄 Consider sector rotation, moving from **overvalued themes** to **undervalued themes**, such as shifting from **IRFC** to **private banks**.
* ⌛ Sometimes the best strategy is a "**wait and watch**" approach, especially in uncertain markets without clear support levels.
* 🛡 Consider buying defensive stocks in high-risk market environments, as these stocks tend to **perform well during market downturns**.

hi everyone welcome to today's video. So many of you are excited to trade about the budget. Trading means that okay before budget I'll buy this stock. During budget I'll buy these stocks and it will give you massive rally and P P. Please understand things fundamentally this might be a major mistake that you might make. So on this video I'm going to help you understand through 10 very simple points what is it that you should be doing in terms of trading the budget in case you are trying to do that. So let me present the entire story in 10 very simple easy to understand points. Now for people who do not know about me, my name is akat sastav. I graduated from incad worked in Finance Management Consulting top tier firms have been managing a fairly big portfolio for the last several years and now I run my own hitge fund. So whatever I learn by speaking with the rich I bring it to retail investors in very simple No Nonsense manner. So in case you like you can

subscribe to the channel. Also, since we are on the topic of the budget, it is important to note that our household expenses or household budget can get deeply impacted by uncertain events. For example, the loss of a loved one. So, on that note, let me introduce you to the partners of today's video, which is Policy Bazaar. It is an excellent platform for buying health and term insurance. By paying just 600 to 700 rupees per month, you can get a term insurance cover worth 2 crores. For health insurance, you can get a cover of 1 crore rupee just by spending 300 to 400 rupees per month. Please note that the premium on health and term insurance is going very high. The medical inflation in India is close to 14%, so the sooner you do it, the better it is for you. Through Policy Bazaar, you can get a 30-minute claim assistance in the event of any tragedy and get up to 25% discount on health insurance plans. You can get up to 10%

discount on term plans. You can compare up to 51 plans and pick the plan that is best for you. So do check out the links in the description and comment box. Now with that said, let's move over to the main video. Okay, so 10 simple points. Point number one is that people had missed the election rally. I think it was around third when election results were announced. There was a dip in the market. People missed buying that. And on Fourth, the market rallied and they missed the rally, right? So, but you get the concept now. Those people are trying to make up election rally we missed, but we will now go and trade in the budget and we will make up for the losses that we incurred in that election rally. Please don't do that because this is the actual budget. An interim budget had already been provided in the past. So we already have a clear direction as to which way the government is going to go in terms of its budget allocation. So the first key point is that don't try to

make up for the election rally. You might actually end up making losses. Point one, point two. If you look at the macro data, what you will figure out is that there is likely to be very high volatility in the Indian markets going forward. Why is that the case? Macro data for India. So, for example, if you take a look at something called as India's government debt to GDP ratio, you will quickly realize that India's debt to GDP is still very, very high. Now, some of you might start China, give the higher US, give the higher, etc., etc. True, I'm not trying to deny that. All I'm simply trying to tell you is that India's debt to GDP is currently very high, which means that the markets are likely to be volatile because debt to GDP simply means leverage. Right now, if Chinese government has taken a lot of loan, Indian government has taken a lot of loan, US government has taken a lot of loan, then the markets will not rise like this, okay? Markets rise, markets might rise like this, okay? So, there will be a lot of volatility.

volatility means next. It is coming down, etc., etc., so that volatility can be problematic, especially for inexperienced investors, and especially for Traders, which brings me to point number three that don't overtrade due to budget. Now, mostly Traders trade as per their stop losses. Stop losses, you know what you are buying. Let's say ITC stock at hypothetically 100 rupees, okay, and you have put the stop loss at 90 rupees. If ITC falls to 90 rupees, I will sell. Okay, many of times what that happens is that ITC directly falls from 100 rupees to let's say 85 rupees, right, and your stop loss gets triggered, but there are no counter buyers at the other side. So, this is called as triggering of the stop loss below your value that you have perceived, and this can lead to massive losses, right, so this happens more and more in volatile in environment. Similarly, when you place orders, and I was reading like about this on Twitter that a lot of Traders place their order through their

Brokers, but we got allocation at some other price that we had perceived, and that was the fault of the broker. Now, fault if you sit and overtrade. This is the third key important point. Now, what is a better approach? A better approach is called as keeping 20% cash. Okay, so now what is the meaning of keeping 20% cash? So, if portfolio is worth 1 CR, okay, then right now you should keep 20 lakhs as your opportunity fund, right? Opportunity fund. Why am I saying this? That why is it that I am actually giving you this logic, right? And this is going to be very powerful. This is something that I discussed on my member Community also. In case you are someone who is looking to learn about Stock Investing properly sequentially in a step-wise manner, I run a course also. Live batches starting, these batches get filled out very very quickly because we have limited seats. This is a live course. The completion rate of my courses is 95%. All the investors who come to study, they actually completed watch the course.

multiple times, and the feedback has been exceptionally good. You guys can go and check it out yourself. The link is in the description. Now here, see, I'll tell you very, very honestly why that 20% cash strategy makes a lot of sense. And now let me explain it. So, see, basically what you will find out is that CH August October 2021, right? So you will see this one 10% dip here, right? So this is dip one, right? 10%. Yeah, another dip at 10%, key. Another dip at 10%, key. Yeah, another dip at 10%, key. And this was roughly 10% dip. So, 1, 2, 3, 4, 5. So, five times in the last how many years, roughly like 2 and a half, 3 years, right? Time frame. There have been five dips where the market has corrected by more than 10%, okay? Right now, where we are, if you draw the technicals, what you'll see is that this is the long-term

trading channel of Nifty. Okay, it has broken this down. Okay, and where does the first support come for Nifty? It comes here, and the second support comes here. So, the chances are there is a good probability or a very high probability that the markets will fall to this point. A there is also a decent probability that it will fall to point B. So, investing, you should do buk investing at point B. You should do some investing at Point A. Okay, but this, you know, budget time, we, you know, keep on trading, it makes no sense whatsoever. This is like, you know, there is just no support here, right? And there is no macro Factor, at least as of now. Macro factors can be generated in the market. I don't know, and that could Propel the market even further. I'm not denying that possibility, but the chances or probability game in the stock market, there is a higher likelihood that the markets are going to fall at this range. So, right, I mean, that makes more sense. That is a much better opportunity, right? I mean, everyone is

sitting right now budget then we will you know go and invest money or like you know do this and do that or we'll wait for the budget to get over it does not matter from that angle uh and having that 20% cash strategy is a very powerful strategy especially when the market is at an all-time high and it is trading without a support right very very high chance that it will fall right I'm not trying to make you panic all I'm simply trying to tell you is maybe like wait for one 2 weeks 3 weeks one month and you will get to buy the market at support so that is probably the best time to buy it again right in bulk that is what I would sort of suggest to you next key point is that you need to buy the market at support all the time so this is just a repeat from the previous point that I was explaining for example this is a trading channel right so this is support one for the market this line right this is the

support line this will become support two most likely right and in fact support three. Support two and this will be support three then you'll have fourth support here so right if the market falls to this point. Now this is unlikely to happen right unless there is like some massive negative news or some kind of uncertain thing that has come out but buying your buying should start from here and you have to plan your portfolio accordingly and therefore learning how to cultivate and build a portfolio is absolutely critical. Now again this is something that I teach on my courses cash flow manage how do you build a portfolio using index mutual funds direct stocks small cap midcap how to target a particular return so all these strategies are discussed. Point number five that there are certain overvalued stocks. I have spoken about this on this video also so for example up IR f c right so irfc is here now here what is happening right so the stock went from 31 rupees all the way till 217 almost seven times right and have

the profits revenues gone up seven times double right this is here and double right so it's not as if ke you know the the PE of the stock is making sense right this is a real stock. This is primarily driven by regulation. Uh public sector Enterprises government 43 44 St stock at a market cap of 2.68 lakh. It doesn't make sense in the market. There is something called a sector rotation right so sector rotation right sector rotation. There are themes right for example there is rail theme okay right. It will be made to go like very very high why because F you know operators so they will keep on buying this stock right and they will just pump it up right okay then what would they do right once their money is made they will they will cut their positions here right and then what will they do whatever money they are getting they will rotate that money into some other theme for example just private Banks key theme is undervalued right so they might pick a theme which is overvalued cut their positions and

rotate that money into an undervalued theme. Now, which brings us to the next point that, hey, buy undervalued themes, not overvalued them. Now, what do I mean by undervalued themes? So, for example, consider K Mahindra Bank. You know what MRA fell by 3.5 or 3.3%. See guys, basically, the way sector rotation works is that the money moves from overvalued themes to undervalued themes, okay? And overvalued themes undervalued themes, under you, under you, okay? So, that is what is happening on K Mahindra Bank and the likes. Now, there is nothing wrong with the banking system right now, right? Take a look at the fundamentals of K Mahindra Bank, for example. P ratio, P ratio was 18, or right now it is 18. When was the last time the P ratio of K Mahindra Bank was 18, 19? It was when banking crisis was going on in America, right? This was roughly one and a half decades ago. Now, natural question comes for

example since 2020 right the business has doubled there is no problem since 2020 the profits have almost tripled there is no problem so problem right the problem or the simple thing that is happening on banks like mahra that's it right why so that themes like and it flows into private Banks. I'm not saying that MRA Bank cannot fall but that is something that you could consider right so that's a simple point I will tell you here now. Next Point comes that basically that you can sometimes the best strategy in the market is wait and watch strategy now the meaning of wait and watch strategy is we will go buy something or we'll go sell something in the market you don't need to do that all the time especially in markets like these AB we are trading without a support we are here there is no support as of now so does not make sense on the flip side there will be investors 2022 and sitting on 40% 50% profit on my portfolio 60 70% so right I mean Market.

looks high. See, there are macro triggers left, which is primarily an interest rate cut which is about to happen. So, there is no point in selling also, right? So, this is just a wait and watch type of a market. Please understand that this is one of the most important decisions you have to take regarding your portfolio. Now, whether to build more positions or cut some positions. You don't necessarily need to cut if you don't have better use of that money, okay? So, this is what I will say next is that you could consider buying defensive stocks. Now, I'm not saying defense stock, I'm saying defensive stocks. An example would be that, for example, in 2020, H was probably the only stock, and H and friends, they were the only stocks that continued to give a run-up despite the entire market falling. Why? Because these are defensive stocks. You require these types of things for daily use. I've been speaking about consumer durable stocks for the last 8 months. SW poool have given very good run-up in that time frame. Why? Because this

was a rebounding industry. This was defensive in nature, so to say. These are regular use products, so to say, and people are going and they were bouncing back from a negative time, so to say, right? So, the point is ABB, right? I mean, because the market, the risk in the market is high, the money will get rotated to defensive stocks. There is a very high likelihood this will happen more and more in the future because the bond market or the long-term bond market has just eroded, right? I mean, like fundamental problems there, right? I'll make a separate video on that, but to cut the long story short, there are issues with the bond market. So, therefore, investors have no choice but to move money between high risk to medium risk to low-risk stocks, right? So, defensive stocks are low-risk stocks. When market risk, then defensive stocks are always going to rally, at least for a substantial future. Then comes the next point that don't do FNO, okay? FNO is a sub-segment of trading, a F tax, right, and India. It does not make

you know logical sense. You have to take a look at your after-tax return. Number two, as I was explaining, that the volatility on the market is really, really high, and FNO Traders are the worst hit by volatility. So, there is no point in touching. Please stay away. It does not make much sense. Final point is that please understand when interest rates are going to cut, that will be the major rally point for the market. Next, this is what it looks like, and it is most likely going to happen. Expectations are that US is going to cut the interest rate towards the end of the year. India will follow. Other countries will also follow. January, February. So, next 3-4 months are going to most likely be sideways. You don't need to do much, right? I mean just keep pruning your portfolio, keep adding good undervalued stocks, keep selling overvalued stocks. Have confidence in your investing style. If you don't have confidence to buy like good things which are undervalued, you'll not make money when these things turn.

around so that's a simple point. So right, this is my simple kind of viewpoint, which I was able to express. And also, a quick reminder that please check out the links for. And also, a quick reminder, please check out the links for buying health and term insurance through Policy Bazaar in the description and comment box. Hope you enjoyed the video. If you did, do press the like button, and I'll see you soon.

Buy Private Banks before Budget? (10 Important points to know about)

Akshat Shrivastava

Trading based on the budget can be risky, especially if trying to make up for previous losses.

The direction of the government's budget allocation is already clear from the interim budget.

It's important to understand the fundamentals and not just trade based on events like the budget.

Consider the impact of uncertain events on household expenses and consider investing in health and term insurance.

Policy Bazaar offers a range of insurance plans with discounts and quick claim assistance.

Managing Investment Volatility in the Indian Market

High government debt to GDP ratio in India is leading to projected market volatility, which can be challenging for inexperienced investors and traders.

Overtrading due to market volatility can result in significant losses, making it crucial to adopt a more conservative approach such as keeping a 20% cash opportunity fund.

A live course on sequential stock investing is recommended for those looking to navigate the market effectively.

The Power of a 20% Cash Strategy in a High Market

A 20% cash strategy makes sense due to the historical pattern of the market correcting by more than 10% five times in the last few years.

It is suggested to invest at point B and point A as the market falls, rather than impulsively trading.

Buying the market at its support levels is emphasized as the best time to invest.

Tips for Building and Managing a Stock Portfolio

Start buying at the current market point to plan your portfolio effectively, considering potential market falls.

Learn portfolio building strategies, including index mutual funds and stock selection, to target a specific return.

Avoid overvalued stocks and focus on buying undervalued themes during sector rotations, such as the example of K Mahindra Bank.

The MRA Bank has experienced a significant increase in profits since 2020, potentially impacting other private banks.

In the current high-risk market, adopting a "wait and watch" strategy is crucial for investment decisions, especially with an upcoming interest rate cut.

Considering investment in defensive stocks is advisable due to the market's high risk and the potential for money to be rotated into low-risk options.

It is recommended to avoid FNO (Futures and Options) trading in the current market conditions in India.

After-tax return should be considered when evaluating investments, especially due to high market volatility.

FNO Traders are particularly affected by this volatility.

Anticipated interest rate cuts in the US and globally may lead to a sideways market for the next few months.

It's recommended to adjust the investment portfolio by adding undervalued stocks and selling overvalued ones, while maintaining confidence in your investing style.