Sensex crossed 50,000 levels, moving up over 90% from its March low of 25,981 points.
We spoke to a few MFDs to understand what they are telling clients.
Gaurav Awasthi, Senior Partner at IIFL Wealth Management believes Sensex at 50K is a psychological feel good factor and it has no significance on the decision to invest or exit from equity markets. “The relevant yardsticks to look at for investing include the current valuations and future earnings trajectory of underlying companies. The longer-term view remains positive given the strong tailwinds in a host of industries including IT, pharma and manufacturing. However, the current valuations do warrant some caution with likelihood of increased volatility in the short term.,” said Gaurav.
While positive earnings have supported the current market rally, Naveen Kulkarni, CIO, Axis Securities believes sustainability in earnings would help extend the market rally. “The outlook for earnings has improved with a faster than expected economic recovery. If positive earnings momentum sustains, then we could see more such milestones in coming time," said Naveen.
Kolkata MFD Bharat Bagla of Bees Network believes markets have the potential to continue this momentum considering a broad-based rally is around the corner. “Currently, only a few stocks are supporting the rally. This means, gains in remaining stocks can further extend this rally. Take for example the index heavyweight RIL. If it surges to its record high from current levels in the near term, the benchmark has the potential to rally another 2,000 points,” said Bharat.
Bagla believes that clients should stay invested until Union Budget 2021 as he expects positive reforms in the upcoming budget.
Tarun Birani, Founder & CEO, TBNG Capital Advisor feels that investors who have achieved their financial goals should look at booking profits. “My two cents to investors with a goal-driven approach to investing would be to take a closer look at their portfolios and their set goals. Investors who may have achieved their targets may go ahead and book their profits. At this specific time, investors should pay attention to their portfolios, which may need rebalancing to ensure their portfolios aren't overweight in any specific asset class. Investors must pay keen attention to the right asset allocation which is key to a balanced portfolio and vital to achieving their financial goals,” said Tarun.
Suresh Sadagopan of Ladder7 Financial Advisories feels that investors should not get swayed by the rally. “Investors should focus on long term investment and stay invested during all market cycles. I recommend investors to book profit only if their goal is achieved,” said Suresh.
