Is it good time to invest in indian stock market

Never miss a great news story! Get instant notifications from Economic Times Allow Not now. Choose your reason below and click on the Report button. This will alert our moderators to take action. Get instant notifications from Economic Times Allow Not now You can switch off notifications anytime using browser settings.

ET APPS ET Android App ET iPhone App ET iPad App ET Wealth Android App ET Blackberry App ET Nokia App ET Markets Android App ET Markets iPhone App ET Money Android App. FOLLOW US FACEBOOK TWITTER YOUTUBE LINKEDIN GOOGLE PLUS RSS. Home Markets News Industry Small Biz Politics Wealth MF Tech. Jobs Opinion Blogs NRI Magazines Slideshows ET NOW ET Speed ET Portfolio. Real Estate RERA and You. Calculators IFSC Bank Code New Invoice Generator EPF Calculator House Property Income HRA Calculator Sukanya Samriddhi Calculator Education Loan Calculator Car Loan Calculator Home Loan Calculator Personal Loan Calculator Risk Tolerance Calculator Financial Fitness Calculator Tax Impact Calculator Homeloan Refinance Calculator Retirement Savings Calculator.

NIFTY 50 9, Select Portfolio and Asset Combination for Display on Market Band.

Download ET MARKETS APP. Drag according to your convenience. As the stock markets touch new highs, some investors are jittery while others are excited.

Find out how to avoid errors and make most of the situation. With the stock market hitting a new all-time high, confusion among investors has also hit a new peak. While some believe that the bull market has finally started and will take the market to much higher levels, others are scared of a crash. Here are some tips from experts to help you make the most of the situation.

Investors should avoid the mistake of going by absolute numbers—absolute value of the Nifty , the Sensex or an individual stock. Valuations of stocks or indices need to be compared with their earnings potential.

10 Simple Tips for Starting to Invest in Stock Market - The Financial Express

Since earnings were moving up in the past three years, albeit slowly, their valuation could have fallen during this period. The broader market valuation has yet not hit the high.

Since the market is looking at future earnings, let us take a close look at that. Given that corporate earnings in the current financial year, , are muted, experts are expecting a jump in However, you should moderate your return expectations. Experts' survey Despite the likely pick-up in earnings, there is a good reason why you should moderate return expectations. Amar Ambani, Head of Research, IIFL concurs: Market valuation is not very high, if one goes by the market cap-GDP ratio.

stock markets: Stock market is hitting new highs: Here are 8 tips to invest wisely

Data compiled by ETIG Database Dec GDP data used for March ratio Also, there is no guarantee that the market will fall once it crosses the fair valuation zone. It could enter the highly overvalued zone before a meaningful correction starts: Sensex PE crossed 28 during the peak, compared to the current So, equity valuation is not so as to warrant a change in your tactical asset allocation.

One must also remember that a key factor that determines market levels is availability of funds. Increased domestic inflows are further bolstering the market, with mutual fund SIPs systematic investment plans attracting a large number of retail investors. Unlike investments from FIIs and via SIPs, which falter if markets turn bearish, there is new institutional money coming in, which is unlikely to be impacted by short-term market volatility. Sridhar, Director and CIO, IndiaFirst Life Insurance.

Continue regular equity investing Since there is no reason to change your asset allocation, experts advise investors to continue with their regular investments. These regular investments will help you take advantage of short-term volatility.

Data compiled by ETIG Database Stagger lump sum investments If you have a large sum to invest, it is best if you invest it in instalments.

The market is expected get volatile and, if you stagger your investments, you may be able to buy at lower levels. The first trigger for this volatility can come in April, when corporate numbers of the fourth quarter will start coming in. Sridhar is also waiting for such an opportunity.

The directional change in inflation and the interest rate trajectory is another short-term worry for the market. These short-term worries, however, may not result in a very big cut in market valuations. Returns from equities are bound to exceed those from bonds over the long term. Dynamic asset allocation funds reduce equity exposure when the market valuations are high and increase it when the valuations are low.

You should scan through valuations and dump overpriced stocks. The high market valuation we mentioned earlier is the average of highly valued stocks and reasonably valued stocks. So, you can generate a better return than the index, if you invest in undervalued stocks or sectors. Traditionally, the mid-cap segment is valued less than the large-cap segment. However, it is the opposite now.

Mutual fund investors can also follow a similar strategy—those holding small- and micro-cap schemes can switch to large-cap funds. Stay away from penny stocks Chasing penny stocks is a mistake many investors make during market peaks.

They incorrectly assume that the risk in a stock priced at Rs 2 is much less than in a stock priced at Rs 2, You need to compute risk in percentage terms. And the likelihood of a Rs 2 stock falling to Rs 1 is much more than a Rs 2, stock reduced to Rs 1, And, as mentioned earlier, investors need to get out of the habit of looking at absolute price. Ostwal, CMD, CNI Research. As a segment, penny stocks are mostly manipulated by operators and are best avoided.

Brokerages are also taking steps to protect their customers from penny stock manipulation. Control the urge to trade Investors need to control their urge to trade. But investors need to understand that trading is a specialised activity and requires in-depth knowledge.

That is why V. Sharma, Head, Private Client Group, HDFC Securities is categorical: If your equity portfolio is reasonably big—Rs lakh—you should consider using some portfolio insurance techniques to hedge the risk. In a bear put spread, you buy a put option for protection say, Nifty at 9, and sell at lower levels Nifty at 8, to reduce your overall cost. Which stocks to buy and which to avoid in current bull market Also Read: What to do if your fund NAV hits an all-time high.

Living and entertainment Timescity iDiva Zoom Luxpresso Gaana Happytrips Cricbuzz Get Smartapp Networking itimes MensXP. Hot on the Web UBER OnePlus 5 Top 10 mutual funds GST Sensex Gold rate today Sensex Today. Services ads2book Gadgetsnow Free Business Listings Simplymarry Astrospeak Timesjobs Magicbricks Zigwheels Timesdeal dineout Filmipop Remit2india Gaana Greetzap Techradar Alivear Google Play Manage Notifications. Digg Google Bookmarks StumbleUpon Reddit Newsvine Live Bookmarks Technorati Yahoo Bookmarks Blogmarks Del.

My Saved Articles Sign in Sign up. Find this comment offensive? This will alert our moderators to take action Name Reason for reporting: Foul language Slanderous Inciting hatred against a certain community Others. Your Reason has been Reported to the admin. Fill in your details: Will be displayed Will not be displayed Will be displayed.