Picking the Signals

The market continues to trade closer to its all-time highs. Rarely do we have the Nifty50, Sensex, Nifty Midcap, and the Nifty Smallcap 250 indices trading at record highs around the same time. Such a market construct must make all stakeholders happy and thrilled. But, that does not seem to be the market mood right now.

Investors are anchored to making higher returns with ease from their COVID rally experience. And, they aren’t experiencing anything similar. This market is not a secular bull market. It is a layered market with several underperforming sectors giving investors a mixed experience. So, sectoral investing hasn’t really done great post-COVID.

The performance of smallcaps, midcaps and frontline indices, however, has been spectacular. Investors seem to be either chasing these themes late or waiting to invest in that elusive dip. Clearly, investors are unhappy because they haven’t succeeded in timing the market, and in that process, have lost out on this market rally.

That train has left the station, and waiting for it is futile. Investors must look beyond the immediate and invest in fundamentally sound themes that are out of favour. This is a time to invest diligently and steer clear of the fear of missing out.

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