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Is it right time to invest in these stocks?
Mon, 9 Aug Pre-Open

Mid and small cap stocks are having a good FY11. This is given that these stocks in general have outperformed their large cap peers since the start of April 2010. Against the BSE-Sensex's gains of a mere 3%, the BSE-Midcap index has risen by 9% during this period. As for the BSE-Smallcap index, it is up 10% since March end.

Data Source: BSE

Mid and small cap stocks in fact have been outperformers since the bull run started in March 2009. This is after the big declines these stocks had seen in 2008. As we stand now, these two categories of stocks aren't looking cheap anymore. Not even if one factors in a good growth in corporate earnings over the next 2-3 years. As such, following the momentum and buying these stocks (just because they are rising) is highly risky.

So, should mid and small caps be a strict 'no-no'?
Well, the answer is - it depends on your long-term needs and risk appetite. But purely as a matter of prudence, one looking to build a portfolio from a 10 to 15 years perspective can allocate 10-15% each to mid and small caps...and quality stocks in each of these categories.

Treat this allocation towards mid and small caps as just a guide and, we repeat, allocate your equity portion using your understanding of different kinds of companies across different levels of market caps.

Overall, the opportunities to buy good companies at low valuations are still not available in plenty. In such a scenario, the better thing to do will be to make a list of good quality mid and small cap stocks - well-managed simple businesses - that will be worth buying if the markets crack.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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Stock Market Updates

Sensex Trades Marginally Lower, Dow Futures Up by 174 Points (Today's Market)

May 14, 2021 12:30 pm

BSE Sensex is trading down by 29 points, while the NSE Nifty is trading down by 39 points.

Sensex Opens Flat; Asian Paints Rallies 7% Post Q4 Results (Today's Market)

May 14, 2021 09:30 am

Indian share markets open flat. The BSE Sensex opened down by 33 points, while the Nifty is trading lower by 14 points.

ADANI TOTAL GAS Share Price Down by 5%; BSE 500 Index Down 0.1% (Today's Market)

May 14, 2021 09:34 AM

ADANI TOTAL GAS share price is trading down by 5% and its current market price is Rs 1,330. The BSE 500 is down by 0.1%. The top gainers in the BSE 500 Index are ASIAN PAINTS (up 6.7%) and BANK OF INDIA (up 5.7%). The top losers are ADANI TOTAL GAS (down 5.2%) and VINATI ORGANICS (down 7.1%).

JINDAL STEEL & POWER Share Price Down by 5%; BSE METAL Index Down 2.4% (Today's Market)

May 14, 2021 09:32 AM

JINDAL STEEL & POWER share price is trading down by 5% and its current market price is Rs 466. The BSE METAL is down by 2.4%. The top losers are JINDAL STEEL & POWER (down 5.3%) and NMDC (down 5.3%).

BANK OF INDIA Share Price Up by 5%; BSE BANKEX Index Up 0.3% (Today's Market)

May 14, 2021 09:28 AM

BANK OF INDIA share price is trading up by 5% and its current market price is Rs 77. The BSE BANKEX is up by 0.3%. The top gainers in the BSE BANKEX Index is BANK OF INDIA (up 5.2%). The top losers is HDFC BANK (down 0.2%).

GRINDWELL NORTON Share Price Up by 8%; BSE CAPITAL GOODS Index Up 0.4% (Today's Market)

May 14, 2021 09:26 AM

GRINDWELL NORTON share price is trading up by 8% and its current market price is Rs 1,259. The BSE CAPITAL GOODS is up by 0.4%. The top gainers in the BSE CAPITAL GOODS Index is GRINDWELL NORTON (up 7.7%). The top losers are L&T (down 0.3%) and V GUARD INDUSTRIES (down 0.4%).

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