Markets At All-Time Highs - Hold On As The Best Is Yet To Come!

Markets are at all-time highs and again the investors are faced with the dilemma – whether to hold, buy fresh or sell the investments. While the valuations do not look cheap, we believe the sentiment in the market is at its best as Narendra Modi is expected to win emphatically. Along with a Modi win, the market is also factoring in business-friendly policies from the new government. The new government is also expected to adopt liberal economic policies and take expansionary measures to boost economic growth further. India’s stature in global economy will rise in the coming year and India will continue to be the fastest growing economy in the world. This will ensure that the FIIs pump in more money in the Indian market as they have been doing so far in 2019.
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Talking about the results, the earnings growth has been better in the current quarter so far when compared with the previous one. Expect earnings growth momentum to continue throughout the year. The growth in earnings and the speed at which it grows, after all, will determine how quickly we grow our wealth by investing in equities.

I see that most investors are worried about the Nifty and Sensex valuations being at all-time highs. Precisely to help investors make informed decision now when the indices are at all-time highs, we have explained in our cover story how and why it is still a good time to invest in the markets. The EPS growth and the PE expansion will ensure that the markets will go up in the coming year or so. Do have a closer look at our Nifty projections and let us know if you have any view on our observations. We will be glad to know what your think about our cover story.

In one of the special stories, we have observed that the PSU stocks are trading at attraction valuations. Whether the PSUs make a good investment bet at this point of time or are they merely ‘value traps’ – you will get a good perspective on PSUs from our special story! 

Any change in promoter holding is always a crucial information while analysing any stock. We have highlighted in our special story how the stocks have reacted to the changes in promoter holdings across market capitalisation. I am sure investors will find our observations useful. Do write us your feedback on the same.

If you closely look at global equities, a common trend that you will observe in developed markets such as the US is that of improving earnings growth and PE expansion. The prevailing risk-on mode in the global markets will ensure liquidity flows into Indian markets. Basically, the quality of earnings growth, certainty and continuity of policies in India owing to stable government, softening interest rate environment, positive sentiment in the investment world, expected infrastructure spend in India and the consumption story being intact—all these factors make me believe the markets are in extremely good shape and that the stock prices may head northwards. Looking at all the variables, we would like to place our Sensex target at 46,000 level by March 31, 2020.

Build your portfolio without leverage and stick to quality stocks and hunt for growth stocks available at reasonable prices. If you can do all this, you are way ahead in the game of investment – and riches will come your way, sooner rather than later!

Happy Investing and Best of Luck for Your Investments in FY20!