But many market experts believe D-Street might be entering a dangerous mode. But correction is part and parcel of investing in markets and one must learn to navigate that in order to achieve investing success.
Therefore, in today’s edition of Tweet Buster, market mavens share their outlook for stocks and also some tips and advice to ensure you invest right.
Where is market headed?
Independent market expert Sandip Sabharwal believes that the market is entering a dangerous zone since even the market laggards with the least earnings visibility have started to move up. Does this euphoria warrants us to be cautious?
All laggards have started to move up now which have the least earnings visibilityMarkets entering into dangerous zone
— sandip sabharwal (@sandipsabharwal) 1605768137000
While September quarter earnings season managed to beat expectations undoubtedly, the possibility of companies repeating the same through 2021 is a difficult feat, believes Sabharwal. Most companies relied on cost-cutting as a measure to boost margin. But let’s remember costs cut by one hurts another.
Company results not only in India but of Cos around the world have surprised on the upside as most companies cut do… https://t.co/QgHhAjevk6
— sandip sabharwal (@sandipsabharwal) 1605496583000
How to navigate the market?
Patience is key
Behavioural finance expert Morgan Housel stresses on the importance of patience in investing. He compares to how sleeping for eight hours is good for health, being patient is similarly good for investing. “Sounds too simple to take seriously but will probably make a bigger difference than anything else you do,” Housel said in a tweet.
“Be more patient” in investing is the “sleep 8 hours” of health. Sounds too simple to take seriously but will proba… https://t.co/nrpTHfSrZo
— Morgan Housel (@morganhousel) 1605735215000
Evolve or go extinct
Microcap founder Ian Cassel advises investors to continuously evolve your investing style. He says if you are investing the same way you did ten years ago, you are not growing.
Evolve or go extinct. If you are still investing the same way you did 10 years ago you aren’t growing. Don’t fall i… https://t.co/YjaS4BXXLu
— Ian Cassel (@iancassel) 1605404822000
What’s value investing?
Market veteran Shankar Sharma simply lays down his idea of value investing.
Value Investing is the Art of buying stocks that don’t go up in a bull market, and don’t go down in a bear market
— Shankar Sharma (@1shankarsharma) 1605844591000
Don’t put the majority of eggs in one basket
iThought co-founder Shyam Sekhar says you are probably not applying prudent investing practices if a single stock takes up over 20 per cent share of your overall portfolio. As an investor you lack discipline, believes Sekhar.
If a single stock takes more than 25% of your mindshare, sits at >20% of your PF, you probably aren’t applying prud… https://t.co/nMaG3hemuK
— Shyam Sekhar (@shyamsek) 1606013537000
Go for asset allocation
Sekhar also believes that asset allocation is the most powerful tool as it provides safety above all.
Be it switching from real estate to equity in 2009-12. Or, switching from equity to gold in 2018-19. Or, switching… https://t.co/FDbt1B79T9
— Shyam Sekhar (@shyamsek) 1605979886000
Don’t just bet on the winners
Shyam Sekhar believes that putting your money in five Nifty stocks that are rising on back of liquidity can come crashing down when the flows reverse. He says, “Betting your portfolio health purely on the power of steroids may work in the near term. In the long term, the water often runs down & out.”
The same five stocks that run the #Nifty up on steroids of liquidity can also run the index down when flows reverse… https://t.co/5UOh88Pkhv
— Shyam Sekhar (@shyamsek) 1605928589000