Timidity prompted by past failures causes investors to miss the most important bull markets.
Are the markets expensive now? Given that the SENSEX is very close to its all time high, investors tend to believe the case of markets being costly. But, the truth is that only parts of the markets are really expensive and the market as a whole is certainly not expensive. At the same time, the markets aren’t cheap either. This makes it difficult to make decisions on when one should deploy money. The wait for a deep correction may well be a long one too. It could also be very painful and prolonged. The trick is to follow a bottom up strategy and to buy parts of the markets that aren’t too expensive and offer growth at a reasonable price. GARP (Growth at a reasonable price) is the way to go in the Indian markets if one is to avoid getting left out. While making investment choices now, one must stick to quality in a rising stock market. That is the only way to avoid getting hit in the event of a correction. Clearly, the long term story will slowly get better for investing in India. As the case for Indian equity gets strengthened, investors must ensure they are adequately invested. Being under invested is simply not an option now. One thing is increasingly certain. Equity is set to regain preference over other investment asset classes like gold and realty in the coming years.
Investment strategy: Being invested in equity & staying invested is the way to be.