“Success is 20% skills and 80% strategy.” — Jim Rohn.
First we saw the Modi Rally. In that high tide, all boats ( read stocks ) went up. Few stocks like consumption, IT and pharma did not participate. But, these were the bedrocks of the market for a long while. Investors always try to buy what they don’t own when the markets break out. The fact that these stocks they buy are not exactly of the desired quality hardly matters. All investors want is a quick trade. Once the trade ceases, the return to sanity sees investors search for quality. This leads them right back to the stocks that did not participate in the market high tide. We are seeing the revival of FMCG, pharma and select IT stocks. The coming weeks will see more churn as investors conduct reality checks and quickly shift towards more long-term oriented investing. The Modi trade has begun to end. Serious investing will gain momentum.
Investment Strategy: Keep your powder dry for a correction. Accumulate cash.