Markets at new high – Should we sell?
I am getting this question from different investors
every day.
Our common sense says that since if we are stuck up in
equities for last 4-5 years, this is the time to exit.
This is a wrong decision. Decision to sell, hold or
buy should not be based on past but on base of current valuation and future
outlook.
Our advice has been to review, restructure and hold.
Also add if possible.
After a gap of 5 years, stock markets have attained
new high. SENSEX is @22000 and NIFTY is @ 6600. Remember that during the 5
years that SENSEX has taken in regaining the new high, earnings of the
companies have almost doubled. So P/E multiples are still reasonable. Current
P/E is 15. History suggests that investment below 15 times has always been
double in next 3 to 5 years. Second factor – Possibility of Modi lead NDA
government coming to power next month.
In India, current account deficit has reduced, rupee
has strengthened and inflation is not rising. Crude prices are stable. Gold and
commodities are going down. So present situation is good. Going forward, Indian
Economy is going to be US $ 5 trillion GDP by 2020. This would be 2.5 times the
present one. Market Cap would go up more than this. So equities should perform
well in next 4-5 years. We will continue to see new highs.
We had organized a seminar on `Equity – The Game
Changer’ about a month before. It was jam-packed seminar with high
interactions. Our predictions and recommendations have come true within just
one month. This is not an end of Bull Run but a beginning of Bull Run. We are
repeating this seminar at Navsari on 11th April 2014. Please
contract Ajay on +91-99131-92829 for information about this seminar.
We suggest making a review of current holding and
restructuring. Our Value Addition shall help you in this exercise of health
check up of your portfolio free of charge. Please get in touch with Siddharth
on 0261-6676655 for this purpose.
Creation of Wealth is a game of asset allocation and
monitoring. Current position suggests higher weight to equities compared to
real estate and gold. Please rebalance your investment.
By Hemant Desai – Chairman – Concept Securities Private Limited
