I was going through the Twitter and found out an interesting image where it was shown how one of the mutual fund industry have bought in the month of June. Now mutual fund industry doesn't buy for short term, they usually buy it for 6 to 9 months or more.
PC: Twitter.com
So that means if they have increased a stake in any of the company that means there is something which they know about it or there might be something going to happen in the near future. For example, the above mutual fund has increased stake in Indrapastha Gas, that means this Mutual fund is anticipating something good in recent times.
For example, there is a budget in 20 days and thus one of the BJP's manifesto was to provide gas pipeline to every household and thus if the government allocates some money in thar sector then Indrapastha Gas will get huge order from government and that is good for the share holders. Next is ITC limited, there is a talk going on for the demerger of ITC and if that happens, there will be a more shares coming up which actually benefits the shareholder. And having ITC at this level makes sense because it can give stellar return in the coming years if everything is as planned.
And then other are self explanatory. Now copy cat investing means that we copy the investment style of someone and use it with our style. I am not saying copy everything, just take the shares what someone is investing, try to reason behind it and do some research and if it looks good then you can invest. Doing research is absolutely required and just blindly copying is not great. This is because they might have invested some days prior and if the stock starts to go down then can come out any day and you will not know until the end of the month. So you have to invest and plan the exit if the investing doesn't go as planned.
Posted Using InLeo Alpha
I never thought about how mutual fund buys could signal future trends. Makes sense to follow their moves but always do some research too.
Hmmmm 🥺