Money Tree

DON’T WAIT FOR CORRECTION

Are you holding your funds to be invested in stock markets and waiting for a major correction? And why not, most of the analysts on business channels, magazines and from broking houses are putting the public on caution, they are advising retail investors to stay away from the markets till the sensex is touching all time highs.

There are more than 8000 listed companies in India and what Sensex or Nifty depicts is a very few of them, therefore it does not mean that if Nifty or Sensex is all time high, all the stocks are all time high and overpriced. Actually even at this time there are some stocks which are at their bottom and there are stocks with very low PE, they are going very cheap.

Also if you look at sectoral movement, there are some sectors which have not seen any rally till now, such as Fertilizers, Textiles, etc. and also there are sectors which have rallied in the past have come down significantly, like most of the sugar stocks have fallen so rapidly in the past after the rally near September to November 2005 that now they are very attractive.

You might have observed that after the budget, Automobile, power and infrastructure stocks are soaring and at the same time PSU Banks and midcaps are coming down. At this time instead of putting your money in Maruti at this level, try to find out an attractive PSU Bank.

This is a market where opportunities exist at all times. Go search a good stock, look at the numbers, charts and past movement, observe for some time and try to pick it up at a lower price.

As far as a major correction is concerned, we see a number of Mutual Funds have come out with NFOs and most of the life insurance premium is also being invested in equity linked schemes, after all they are going to put the money collected from public in some stocks, they would also try to pick up the best available in the market. FIIs are also bullish on India and Indian stocks and, more and more funds are coming in to this market. In these conditions a minor correction or profit booking is possible but overall the markets should march ahead to make further new highs.