Equity has proved itself to be the
best investment instrument as far as the returns are concerned provided that
one has a medium to long term horizon. After a turbulent 2011, the equity
markets did very well in 2012 and are continuing the momentum in 2013 owing to some
key reforms by Government and in last 1 year expectation of a strong and
decisive Government in 2014.
As we all know, markets have hit new
all time highs and economic and political environment looks better by the day.
Globally too, recovery is evident across the globe and markets look poised for
more. While, equity markets are up, most investors are complaining of being
left out or being trapped at wrong basket of stocks.
While there is a general feeling that
this is not the right time to invest in equity, we feel otherwise. One must not
forget that markets have made a new high after 6 years and after almost doubling
up of EPS from 2008 levels. Also, policy paralysis which was plaguing the
market seems to be a thing of the past now. While, 1 year has seen definite
policy action from current Government and the expectation of a new strong
Government will provide further impetus to the markets.
Although, volatile environment tends to keep investors away from this
instrument, we feel that if one has a longer horizon, equity still remains the
best investment instrument considering its ability to generate returns far
superior than any other. However, due care must be taken while investing in
equity and for retail investors Mutual Fund remains the best mode of investing
in equity. At the same time, HNIs must consider investing in equity through PMS
route which will enable personalized monitoring of their investments.
Hence, we request you to reconsider
allocating a part of your portfolio in equity and reap the benefit of higher
returns over medium to long term. While there may be some volatility in the
lead up to elections, we still feel that markets will climb wall of worries and
reach higher levels in medium to long term.
By Rajat Gupta– Research Analyst (Value Addition) – Concept Securities Private Limited
