Post the elections, most of us who invest into the capital markets have the question what to do now. Is it the time to take profits, or enter? Most of the brokerages are very bullish on the markets, and with the hope that the economic macros will improve significantly, nifty targets are now set at above 8000 by the end of next year. We should understand that markets moves based on the forward projections, so in case GDP increases this should not be a difficult target to be achieved. Most of the analysts believe that the growth has bottomed out and there should only be rise from here. Of Course, no one is considering a black swan event.
Having said that, there is a lot of euphoria and lots of expectations, which eventually will take 1-2 years to materialise. I believe the prudent thing to do is to book partial profits and start new investments in a staggered way. The reason being, markets have moved quite fast due to the election event in a very less time without any changes to fundamentals, and historically markets consolidate after such large moves. Therefore, there will be sufficient opportunities to get into the markets. Suggest buying good companies like SBI, ICICI Bank, L&T Finance in a staggered way to build a long term portfolio (2-5 yrs) to play the cyclicals or economic uptrend.
I think it is always good to add some hedge to your portfolio, and GOLD ETF is one way to do that. With the whole world bearish on Gold or upbeat on equity, gold as an asset class will be underperforming the markets and my view is to start adding gold to your portfolio. Don't expect any returns for at-least one year, but this will be like a protection that will provide hedge from any black swan event. Always remember, sell the greed and buy the fear. One can do this with IT and Pharma stocks as well which will be under-performing as well in the near term.
Stay Invested!!
Having said that, there is a lot of euphoria and lots of expectations, which eventually will take 1-2 years to materialise. I believe the prudent thing to do is to book partial profits and start new investments in a staggered way. The reason being, markets have moved quite fast due to the election event in a very less time without any changes to fundamentals, and historically markets consolidate after such large moves. Therefore, there will be sufficient opportunities to get into the markets. Suggest buying good companies like SBI, ICICI Bank, L&T Finance in a staggered way to build a long term portfolio (2-5 yrs) to play the cyclicals or economic uptrend.
I think it is always good to add some hedge to your portfolio, and GOLD ETF is one way to do that. With the whole world bearish on Gold or upbeat on equity, gold as an asset class will be underperforming the markets and my view is to start adding gold to your portfolio. Don't expect any returns for at-least one year, but this will be like a protection that will provide hedge from any black swan event. Always remember, sell the greed and buy the fear. One can do this with IT and Pharma stocks as well which will be under-performing as well in the near term.
Stay Invested!!
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