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Below are view on the market current rally and key advise for investors by Mr. Rahul Shah-Co-Head of Research, Equitymaster

“Has the risk-reward ratio turned less favourable for investors as compared to a year ago? Of course it has.  

Is the stock market in a bubble? Perhaps it is.  

However, you also have to remember that the markets can keep going higher longer than you can remain patient.  

And therefore, it is never a good idea to sell everything and get into cash if you think something is a bubble.  

A good option at these levels would be to book some profits, say to the tune of 50% of your portfolio, and wait on the sidelines for the valuations to turn comfortable again.  

On the other hand if one is an SIP investor who prefers investing a fixed sum in stocks every month, he can continue with his SIPs in my view.  

The very purpose of such SIPs is to invest for the long term and not try and figure out whether something is a bubble or not.  

Therefore, all one needs to do is ensure that these simple rules are followed and one can end up with good long term returns.”

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