Optimism is the Way Ahead

As anticipated, the market is undergoing a correction owing to rising corona virus cases and the expected economic slowdown led by multiple lockdowns in the country. The situation may not get awfully bad for the equity markets though. If you were to look at some of the available data, there are at least 344 stocks that have gained more than 50 per cent on YTD basis alone and about 602 stocks that are making fresh 52-week highs this month. The rising virus cases are also likely to peak out in a month or so. The latest government decision to vaccinate everyone above the age of 18 is strategically a positive for the markets as it reduces the possibility of further strict lockdowns across the country. 
 

Another indicator comes from the buoyancy of the unlisted companies wherein India’s ace investor, Rakesh Jhunjhunwala, mentioned that his unlisted companies’ portfolio has done better than his portfolio of listed companies. A report published by Credit Suisse highlights 100 odd unicorns that have a combined valuation of USD 240 billion. This goes to show the vibrancy in the economy and potential to see some quality IPOs hitting the markets this fiscal.

In our cover story we have discussed in detail the triggers that will decide the market direction. Indeed, apart from the rising cases, globally the world is steadily getting vaccinated. The real fear for the markets can be the rising bond yield owing to the expectation of rate hike by the US Fed. In the story we have highlighted why that may not happen and that equity markets may deliver high double-digit returns this calendar year. There are many things going in favour of the global equities right now. Understanding that the markets are giving a renewed investment opportunity, we have chosen to recommend seven stocks that can be added to power your portfolio.

In a special story of ours, we have explained why P/E multiple matters and how to interpret P/E levels intelligently. Often enough, investors miss lucrative investment opportunities just by misreading the P/E multiples. The story aims to help those readers who rely on P/E levels to make investment decisions. In another special story in this issue, we have discussed the importance of government policies and their impact on the stock markets. The importance of monetary and fiscal policies is laid out in simple language.

Going ahead, start using the market corrections to accumulate the stocks you always wanted to have in your portfolio but could not buy due to high valuation, etc. These days a good story once broken leaves truly little time for investors to enter quality stocks as the prices soar immediately. So be agile and invest promptly once convinced. As stated previously, the coming four weeks are going to be important.

RAJESH V PADODE
Managing Director & Editor