Sensex at multi year high
Marina Wealth
Sensex is at an multi-year high. Indian stocks are showing strong momentum with an expectation of a stable government formation post election by NDA. FIIs are pouring money into the Indian stock market.
The question which appears in everybody’s mind is it sustainable? Would the rally continue? The answer is what kind of investor you are. If you are a long term investor, it is a positive sign with the confidence coming back to the markets. If you are short term investor, its very difficult to take a call on which way the markets would move.
The only thing you should remember is that the index movements are based on the earnings of the underlying companies in the index. We are at the bottom or probably close to the bottom of an economic cycle. So, things can improve from hereon rather than waiting for more downside.
Don’t get blinded by the absolute number of the Sensex. Rather go by the earnings of the sensex which is on a continuous growth trajectory over the last 3 quarters in spite of poor economic situation. The valuations are not cheap but not very expensive as well.
Continue to remain invested is my view at this stage.
