X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Poll: At 4,800+ levels, I would...? - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Oct 22, 2003

    Poll: At 4,800+ levels, I would...?

    Indian stock markets have continued to rise unabated over the last few months as if there is no tomorrow. This is evident from the fact that they have appreciated by almost 70% (till last week's closing) since the rally began in April this year. And mind you, this is without any significant correction on its path to achieving the 4,900 (Sensex) levels last week! The correction, which took place on a couple of occasions during this leg of the bullrun, is not worth mentioning (see chart below). However, now the question at the top of investors' mind is, what stand should one take now? Whether to book profits, or to hold, or to continue buying?

    Keeping this in mind, we conducted a poll on our website and the results, trust us, did not take us by surprise, especially at the current index levels. The poll question was, "At the current index levels of over 4,800, your investment strategy would be to..." The poll result is depicted in the chart below.

    Out of the people who participated in the poll, 22% were of the opinion that they would be buyers even at the current index levels, whereas, the remaining 78% would refrain from doing so, if we can put it that way. Out of the latter group, around 39% opined of booking profits, while the remaining 39% opted for the wait-and-watch policy of staying put with their existing investments. Considering this sample to be representative of the general market view, we believe that the onus of pushing the markets to newer highs now remains in relatively fewer hands.

    Amidst all this euphoria, what is our stand?

    We can comfortably place ourselves amongst the majority above because, as we have mentioned in the very recent past also, that the markets have run up too-fast-too-soon and some amount of correction and consolidation is important for the markets to sustain at higher levels. This is because corrections attract fresh investments, not only from the existing players but also from newer market participants, who have either not participated in the current lap of the rally or have exited too soon from the same. While the markets continue to trade at 13x-14x forward earnings, it still remains attractive from a longer-term perspective and the 'investment in Indian equities' case only gets stronger when we compare the same to some of the other developed markets which are trading at over 20x earnings, where forward earnings growth rates would be just about 2%-3% compared to India's 6%+. Our faith in Indian equities is also reaffirmed by the fact that there have been huge foreign inflows into the India stock markets over the last 5-6 months.

    So, if one is a long-term investor, he/she can consider investing in well-researched stock specific stories, which are yet to unfold, as they will continue to provide value to the investor over a period of time. Since it is very difficult to time the markets, slow and steady building of the portfolio by investing in a systematic manner would help in optimizing returns by taking advantage of market rise and falls. Remember, 'equity' as an asset class has outperformed all other 'investments' over the longer-term. But, no speculation please!

     

     

    Equitymaster requests your view! Post a comment on "Poll: At 4,800+ levels, I would...?". Click here!

      
     

    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    Jun 10, 2017

    Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

    Why NOW Is the WORST Time for Index Investing (The 5 Minute Wrapup)

    Aug 18, 2017

    Buying the index now will hardly help make money in stocks even in ten years.

    Trump Takes a Beating (Vivek Kaul's Diary)

    Aug 18, 2017

    Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.

    How To Read Your Mutual Fund Account Statement Correctly (Outside View)

    Aug 17, 2017

    PersonalFN simplifies the mutual fund account statement for you.

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process) (The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE SENSEX


    Aug 18, 2017 03:37 PM

    MARKET STATS