Muhurat Trading Do’s & Don’ts: Time is your friend & impulse can cost you money

Diwali marks the beginning of Hindu New Year Calendar. All across India, this festive period is considered as the most auspicious time to welcome wealth, prosperity and good luck. Right from Diwali Poojan to trading activities, everything revolves around favourable Muhurat and pleasing Money Gods. As an age-old practice, the stock exchanges will open for a special Muhurat trading on October 24, 2022, from 6:15 pm to 7:15 pm. The pre-opening session will begin at 6 pm for 15 minutes

The ‘Muhurat’ for one-hour special trading session is announced according to the auspicious planetary positions. A lot of enthusiasm & interest is seen among new as well as active traders and investors across the country during the Muhurat Session. More than booking profits, investors are particularly enthusiastic to participate in this customary and auspicious trading ritual. More so, even new ventures, business activities and commercial projects are also inaugurated during this festive period for a good start and favourable returns in the next year. 

If you too are considering toping up your portfolio on the auspicious day of Diwali and looking out to welcome fortune and good returns from the markets, let’s understand the best way forward.  

Time is your friend; impulse can cost you money

Be it a new to markets investor or an active trader, everyone on the festival day during the one-hour special trading session is full of festive cheer and looking out to make a trade for good reasons. And historically, 11 out of the last 15 Muhurat trading sessions have been positive. However, markets move in swings, and it is thus recommended that you always trade in quality and fundamentally strong stocks. You should not make impulsive decisions without knowing the investment rationale.
All the leading broking houses as well as market experts share top stock picks for new Samvat year and Muhurat trading stock ideas for long to medium term investors days before Diwali. You must read these reports beforehand and be confident to make informed decisions during one hour of the Muhurat trading. You should refrain from buying penny stocks based on whims of news headlines or social media trends on that day. 

Further, buying gold is also considered auspicious during Diwali. Investors of any ticket size can buy gold by investing in gold ETFs. Adding gold will also diversify your portfolio. Those who are new investors and particularly risk-averse, can also choose to invest in blue chip mutual funds during Muhurat Trading. 

Stay with the basic principles and do not make hasty decisions for short term quick returns. It is always advised to keep a medium to long-term investment period in mind. Be informed and choose stocks according to your time horizon, risk appetite and profile.
 

The writer is the Vice President, Research, Religare Broking.