The benchmark indices have rallied quite strongly last week witnessing strong buying in index heavyweights. The BSE Sensex closed the week above the 58,000 mark for the first time in history, while the NSE Nifty settled above the 17300 levels. Bulls have been on a rampage on Dalal Street, lifting the indices to new levels every week. The stock markets have shot up very fast in the last few trading sessions soaring over 10%. At the current juncture, we believe that traders and investors have become too callous and are ignoring the lofty valuations of the Indian equities at present. We would advice retail investors to stock to their asset allocation philosophy of investing and maintain ample amount of diversification portfolios.
It would be prudent to have many hedges in place. Please remember that bull markets have an uncanny ability to surprise on the upside. However, it is important to appreciate the fact that stock markets are richly valued and corrections can be sharp.
Stay nimble, book some profits and stay on the sidelines at present. Check with your financial advisor and take correct investment decisions. For the time being, stay away from the markets, file your tax returns and enjoy your profits!
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.