If you are planning to say bye bye to stocks we will not stop you. But read the article and decide for yourself.
Remember the famous quote of Warren Buffet
“Be Fearful when others are greedy and be greedy when others are Fearful”
We have picked up safe stocks trading at very reasonable valuations which have the potential to deliver about 50% returns in the next 1 year.
The Indian stock markets have been on a sell off mode over the past few days with stock indices taking a downward trend catching retail investors off-guard. The selling has been brutal particularly in the mid-cap space leading to lot of panic selling. Investors may wonder what went wrong with midcaps as every analyst appearing on TV and sections of the print media were extremely bullish in this space. The reason for bullishness given by those experts is the high growth potential of these companies. While it is true that some midcaps do have good growth potential in the medium term it has to be remembered that the stock prices of those companies has also risen proportionately leading to high valuations. Those investors who had invested in 2014 in the midcap space would have made good money on account of sharp rise in value of those scripts. The stocks of several midcap companies were trading at attractive valuations and some stocks had given 3x returns in 1 year. Of course not all stocks in the midcap are worthy of such lofty valuations. As they say”A rising tide lifts all boats” and this is what happened with most midcaps.
So as a retail investor what should you do now? Is it time to look at large-caps? Is it time to average your midcaps? Or is it time to quit the market and say bye bye to stocks. The answer to those questions is patience and perseverance always pays. This is not a market of large caps or small caps which matter. During this current year of 2016 it is prudent to be stock specific and look for stocks in the market which offer great value in this carnage. The irony of mid and small cap space is they always tend to over react to situations. They go up steeply or they fall like nine pins on corrections. When there exists a sharp fall in values they provide good entry points to accumulate quality midcaps at reasonable prices. It is in these type of crisis that presents great opportunities and we should be ready to grab it with both hands. Smart people always look for opportunities in a crisis and work around a solution while others just blame the market for their bad decisions. There is no point in blaming the markets for our woes as the market is only doing what it had been doing over the past so many years.
So you may ask the question as to where is the market headed and what is the lowest levels the markets can go from here. The markets are currently trading at 18.87x its FY15 EPS and the long term average for the markets is about 15x its trailing 12 month EPS which effectively means that the markets may bottom out around 7100 levels. But beware of your stock selection as picking the wrong stock may result in wealth erosion. We at Sublime financial services can help you to pick the right stock which will give you stupendous returns in the medium to long term.
So what are you waiting for? Call us at 9740080851 mobile number or sms us at 9740080851 mobile number. Our representative will get in touch with you.