IGI Logo

"The ongoing global bull run, which has baffled even the best of experts, is unique. The unprecedented huge liquidity created by the leading central banks and the undue influence being exerted on the market by the exploding number of newbie retail investors has rendered traditional market valuation models less significant than during normal times. But the principles of economics, finance & markets will exert themselves strongly when normalcy returns. It is simply common sense that central banks will have to end their loose monetary policy and rebalance their balance sheets at some point in time. When that happens, interest rates will go up and the equity markets will correct sharply. Since we don't know when this is going to happen, the party is going on. While enjoying the party, investors should also apply restraint. Don't chase mid-small-caps that are in bubble territory. While Nifty is up 13.89 % YTD, the Mid-cap and Small-cap indices are up 33.16% and 45.79% YTD respectively. Hyper retail enthusiasm and very low institutional activity in this segment are causing this irrational exuberance. History tells us that this will not last. Large-caps though overvalued are relatively safe

Above views are of the author and not of the website kindly read disclaimer