The Best Period To Be An Investor

For many of you who have been staying tuned to my editorials for the past few issues since the pandemic began, you would recall my mentioning about waiting until the mid of July for a clearer picture to emerge as far as this pandemic and markets are concerned. And here we are. While the writing is clear on the wall that this pandemic is here to stay, we would like to add that it is also the best period to be an investor. This may seem ironic considering that the last 2-3 years have placed investors in a turmoil scenario and therefore it is quite likely that many may not agree with the previous statement.

However, if you were to objectively assess the existing situation, you would soon come to the realisation that we are currently in the midst of multiple major issues and that is what is keeping the markets subdued. These include the slowing economy, surging virus cases, new lockdowns, negative ratings, poor results, FIIs being net sellers, India-China tension, etc. And yet, our markets have not been faltering and in fact have been displaying good resilience. This is especially so since retail investors have shown a lot of faith in the potential for India to bounce back.

The low yields from all other asset classes be it property, debt, etc. are driving people to move their savings into equity. And more importantly, all this is supported by the added infusion of money in the system from the stimulus given by our government. Thus, would you rather invest now or would you have preferred to invest in January 2018 when the markets were full of hope and sunshine? The answer is obvious! The best period to invest in the equity markets is when the market is subdued by a barrage of negative news and developments.

We are already a lot into this phase, and it is a matter of time when all these restraints will start disappearing. It is this journey wherein the maximum monies will be made and not when all issues have disappeared. It is now until then. So, we would advise our readers to book partial profits where substantial gains have been made and redeploy these funds at every market correction over the next 1-2 months. The recent surge in infections and market lockdowns will provide opportunities to catch some dips as the market which will remain strained during these times. Make the most of this period. There may not be too many such opportunities available in the future. 

Even while the markets are struggling through this tough phase, there are many companies that are unlocking value for investors and providing big gains. In our cover story we have explained what exactly ‘value unlocking’ is and what the catalysts are that an investor should focus on while identifying the value unlocking candidates. Do share your feedback on our observations.

Meanwhile, momentum investing is an evergreen strategy to beat the markets. In our special story we have emphasised how momentum investing strategy can help you beat the markets and have also shared couple of recommendations based on the philosophy of momentum investment. In our other special story we have analysed the prospects of cement stocks. Now that there is more clarity available with investors, the focus should be on the next winners and market leaders. We at DSIJ will continue to identify them for you. Stay tuned!

RAJESH V PADODE
Managing Director & Editor