Keeping 10-15% cash potentially prudent now as opportunities will keep coming: Sandip Sabharwal

economictimes.indiatimes.com:

Sandip Sabharwal, asksandipsabharwal.com, says “holding some amount of cash is prudent potentially in sectors where the run-up has been too swift or where someone has an overexposure and then wait for some corrections to allocate that. But the overall economic outlook is positive, so we cannot go very hugely into cash. So, maybe a 10-15% cash position could be potentially prudent and then in between, opportunities will keep on coming up because all stocks do not correct at the same time.”

It is almost like the market is believing that the next RBI policy will see a rate cut. Is there a correlation? Should one also anticipate a rate easing by the RBI?
It looks highly unlikely that we are going to see a rate cut anytime soon. The scenario that is building globally right now is that the rate hike cycle clearly seems to have ended and once that happens, we will see that the dollar index peaks out, flows start into emerging markets, etc. I think that is the phenomenon we would see.

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On the flip side, in anticipation of all of this, we have already seen the markets run up around 2500 points almost in a straight line. It calls for exercising some sort of caution at this stage because suddenly a lot of people were very bearish in October, now I see everyone being bullish so that becomes something we should be cautious of.

But what do you do? You obviously will not put fresh money to work at these levels, but do you also profit take?
Holding some amount of cash is prudent potentially