Tuesday, April 15, 2014

Jump out of steady boat to take the beta bait or stay put?


Thought for the day

“I see that the fashion wears out more apparel than the man.”

—William Shakespeare (English, 1564-1616)

Word for the day

Prelusive (adj)

Introductory

(Source: Dictionary.com)

Teaser for the day

What are key issues is 2014 election?

·         Narendra Modi’s marital status

·         Manmohan Singh’s reticence

·         Azam Khan’s defiance

·         Arvind Kejriwal’s humiliation

·         Rahul Gandhi’s ineffectiveness

·         All of the above

·         None of the above

Jump out of steady boat to take the beta bait or stay put?


Overwhelming outperformance of high beta midcap and small cap stocks in past couple of months has made many market participants fidgety; especially those who have been excessively skeptic about the political and economic environment of the country. Though most household investors have remained nonchalant by the market exuberance, traders certainly appear restless and willing to take the plunge.

The question is should traders and investors jump out of the good quality (though expensive) defensive large caps to participate in ongoing beta rally for some accelerated gains or just stay put?

The search for an answer took me a decade back. In past one decade the market has seen four clear instances of material midcap outperformance. All instances were followed by a massive correction in markets.

Keeping this in view, in coming days we shall discuss what should be the strategy under the circumstances.
(Source: InvesTrekk, Falcon)
Readers can send their views, comments, criticism to the author at vijaygaba.investrekk@gmail.com
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