Time to be Cautious in Equities

Dear Friends,

I would refer to my article dated 2nd Oct 2013, in which, I was of the opinion that equities would be the right asset class to invest into. In last 5 years, broad based NIFTY has moved from 5800 (Oct ’13) to 11400 (present), thereby giving about 15% per annum return on broader index only.


Implementation of GST would be giving the desired push to the economy, yet I feel that markets are fully priced. On a macro basis, there are some worry points :

  • Increase in international Oil price to USD 80 per barrel.
  • Increase in Bond yields to 8.1%
  • Rupee devaluation to 73
  • Markets trailing PE at 27 (app)
  • Forthcoming general elections 2019


Looking on to the situation I think that investors are better off booking profits. My advise would be :

For those who have been investors in MF for long time and are nearing their goals or objectives (within a year or two), they should book profits and park money in short term accrual funds. The profit booking should be done gradually and at every rise of the market.

For those investors who have recently started investing into MF and have their goals or objectives at least 5 years away, please continue to invest and not be bothered about market movements.

Indian economy is robust and the fastest growing economy in the world. Next 10/20 years, the economy will continue to grow at fast pace because of the population demographics, wherein 50% of the population is under 35 years of age.

As such, Equities will give good returns for sure.

Its only near term or short term that might not give the desired results.

With warm regards,

Samrendra Tibarewalla, CFP(CM)


PS: You are the best manager of your money. Please take informed decisions only.


Disclaimer : The author in no way will be held responsible for losses incurred on the basis of above re commendations. The investors are advised to take independent decisions after verifying all facts.



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