Synopsis
As the market recovers from a phase of volatility, investors with high exposure to mid-cap stocks will face the same old dilemma. Should I sell? Should I buy more? The first question arises because your portfolio would have seen a big decline in October-November. So, as the market recovers, the first instinct is to suspect the rally – and also to protect gains. Now to question two: In the past 10 years, every time a correction has taken place, the recovery phase has taken the Nifty and broader market to higher levels. So, there are investors who have taken a risk at the time of recovery and have gained significantly. Now, beyond all this, a key point: Before you decide to buy or sell, be clear about what you are buying/selling – and why.
As Dalal street gets back into party mode, staying bullish would appear to be the most logical thing to do at this point of time. Why fight against a trend? But while staying bullish, add an element of caution to your buy/sell decisions. When we say “caution”, we mean stay with quality stocks – especially if you are increasing exposure to mid-caps. There is enough evidence to show that owning quality stocks pays both in bullish and bearish
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