Better to invest post-correction

Pankaj Razdan,MD, Prudential ICICI AMCInvestmentThere is always a psychological pressure to book profits when markets are going through hist...

Pankaj Razdan,
MD, Prudential ICICI AMC

A serious equity investor should ideally have a large risk-appetite, adequate time to track the market value of his investments and be willing to regularly update himself with the fundamentals,technicals, market position and such dynamic factors. At one time, not very long ago, 4,500 looked to be the high level, now perhaps 6,200 is good enough to book profits and quit. Selling should be driven by ones needs and the desired asset allocation, rather than a call on the market level — to sell now would mean reducing allocation to a rising market. Equity markets always rewards a patient investor, and it’s not time to quit yet. A cautious investor may perhaps like to book some profits, and perhaps re-enter the markets in a gradual manner with a view to rebalance his portfolio and achieve his desired asset allocation. It would be wiser to allocate the job of managing equity in a volatile and structurally changing market like the current one, to competing professional managers, which is why equity mutual funds make more sense today than ever before.

“Right time to review portfolio”

Deena A. Mehta,
MD, Asit C Mehta
InvestmentThere is always a psychological pressure to book profits when markets are going through historical highs. But since a correction is due, it would be a safe step for retail investors to sell out of short term stocks which have shown good yields. Also, this is the right time to review ones portfolio. Even with historical heights being hit, if ones shares are not doing well, then it is the right time to exit. When it comes to funds, the same outlook goes — do not get carried away by the euphoria, and wait before you make any fresh investments. But one big rule to be followed is to collect the right knowledge before you leap into the market, after all this is one investment option one cannot stay away from.

“Sector funds are good picks”

Motilal Oswal,
Chairman, Motilal Oswal Securities

For those who have an investment horizon of two to three years, this is the right time to buy shares. For retail investors who are looking into a short term horizon, the news may not be that good considering the market is highly volatile. The time now is good for investments in balanced funds or diversified funds, as index funds can turn quite risky taking the market conditions. Sector funds like pharmaceutical, hotels and banking seem to be doing well, and could turn to be a good decision. This is also the best time to restructure the portfolio and identify the right sectors. One can move to sectors which show growth potential like a movement from FMCG to banking or pharmaceutical.

“Exit from non-performing funds”

Krishnamurthy
Vijayan, CEO, JM Mutual Fund

The idea should be to book at least 50 per cent profit and direct them to safer avenues like fixed deposits or RBI bonds. The time is also ripe to exit out of funds which have not performed well as there is ample liquidity in the market. For those who want to enter the market, it should do well to slowly start accumulating shares, and then pause for the correction to happen and then start again. With the way the market is performing, post January should bring in some changes. If one were to chase specific segments, then mid-cap shares gives more room for appreciation compared to large cap at the current levels.

“Investors should be cautious”

Gurumath Mudlapur,
Research Head, Khandwala Securities

The current level of the market should make a retail investor very cautious and selective with investment decisions. He needs to go for undervalued stocks and shares of frontline companies across sectors. At the current level, an investor should look for a balance of growth and value funds as a long-term strategy. The markets will maintain this phase for some time before slowing down, but the sectors that look bullish throughout are commodities, steel and technology. The strategy for the next 12 to 14 months should be buy and hold, sell is not a good sign right now.

As told to Smita Nair