Hi there, this is ETMarkets’ Investors Guide, a show about asset classes, market trends and investment opportunities. I am Atul P.M.
It seems valuation is no more a worry for equity investors in a liquidity-driven market. With a 56 per cent jump from the March lows, BSE Sensex hit an all-time high price-to-earnings ratio of 30 times last week, which was 42 per cent higher than its 10-year average of 21 times.
Yet, it was raring to go further!
In other words, investors are ready to pay Rs 30 for every one rupee earned by the index companies. Some analysts and market watchers have already raised the red flag on the market, but few seem to be bothered.
So, why are investors still chasing stocks even after that eye-popping rally? Are we staring at a major correction due to profit booking in the near term? How can one invest for the long term in this market?
We caught up with Viraj Mehta, Managing Director and Fund Manager, Equirus PMS, to get his views on these issues and understand his investment strategy.
Welcome to the show, Mr Mehta
Q Why are stock investors not worried about these record high valuations?
Q In which pockets do you think some profit booking is long due?
Q If one were to build a portfolio with a 4 or 5 year kind of horizon, where should he go?
Q If one has to invest Rs 10 lakh at this point of time, what would be the right portfolio strategy?
Q Do you see any scope for market correction in the near term?
Thank you Mr Mehta. That’s it in this week’s edition of the special weekend podcast. Do come back next Saturday for this weekly special. You can check out our regular podcasts on the equity market twice every week day.