Bull market intact; reallocate some money from smallcaps to largecaps: Pankaj Murarka

economictimes.indiatimes.com:

Pankaj Murarka, Founder, Renaissance Investment, says “the rise in stock prices across smallcap indices has been pretty sharp over the last few months and it is not a bad idea to reallocate some money from smallcaps to largecaps so as to reduce the risk of the portfolio because all of us know that when markets rise, smallcaps rise much more or much higher than largecaps. But when markets correct, smallcaps also fall much more sharply than largecaps.”How do you see the outperformance of the broader markets? Do you believe that the bull run of 2020 or 2021 post Covid is back once again with the same feel and how do you spot the broader market space?Also, is this the right time to book profits or should one stay invested?There are multiple questions in your one question. So let me address them one by one.

I firmly believe that the bull market that started post Covid is very much intact. What we had between November 21 and let us say March of this year was more of a consolidation in the long-term bull market and the same bull market continues. The fact remains that the Indian economy is delivering pretty healthy growth and the outlook remains reasonably strong despite headwinds and turmoil globally.

So, the bull market in equities is pretty much alive and kicking in my view. In that context, given that earnings growth for corporate India and for Nifty companies has been reasonably strong, I am not surprised that the index has touched 20,000. The broader outlook on the equities continues to remain positive.

Yes, markets are at all-time high but having said that, corporate profits are also at all-time high. Corporate profits are still growing at mid to high teens. In that context, for investors having a medium-term view, the