Category Archives: Market

Market Exuberance

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Greetings from PenguWIN,

The stock markets are rising every day and Sensex closed today, 11th Dec 2020 at 46,099. From the low of 25,981 on 23rd Mar 2020, this is an increase of 77.4%. The worrying factor is that the fundamentals of profit, sales and GDP are not in tune with it.

Foreign Institutional Investors (FIIs) have been flooding our markets with huge amount of money. This money is going into select Large Cap companies in the Index, Sensex and Nifty. The speed at which it is flowing is abnormally high in business that deliver growth. The flow is not the same across all companies as some are expected to do better without any surprises in earnings growth.

While I am happy seeing the portfolio go up and up, I do worry at the back of my mind as its irrational.

In equity investment we have to be prepared for the long haul and not get carried away by highs and lows, until we reach the long-term objectives.

Retirement, one of the most important goals for every investor (creating a good corpus to retire peacefully) may be 20 or 10 or even less than 5 years away and depending on the time frame, it’s extremely important to make sure that the corpus allocation is right rather than being too conservative or too aggressive. The farther away the retirement, the more the risk tolerance.

Please feel reach out to me if you have any questions.