Kunj Bansal on why a sluggish market can be good for investors some time
Kunj Bansal, Investment-illiteracy.com, says “the market cannot keep moving in the same direction forever, especially if we talk of the upward movement of the market then the valuations will become completely unaffordable and fresh money will not find valuation comfort to come in. The market always touches a milestone and then comes back and gives opportunity to the investor.”
The market is very slow, very sluggish. What do you do in these kinds of markets?
These kinds of markets are required, otherwise the fresh money coming in will not get the valuation comfort.
Just to put some numbers in context, around 19th or 20th July, we had touched close to 20,000 in Nifty and from there, we have been in a range-bound movement. Of course, on a net-net basis, if we calculate, we are down about 3-3.5% in one month or so, which is quite okay.
What happens is when the market starts to take a direction either upwards or downward, it cannot keep moving in the same direction forever, especially if we talk of the upward movement of the market then the valuations will become completely unaffordable and fresh money will not find valuation comfort to come in.
So the market always touches a milestone and then comes back and gives opportunity to the investor.
If we look at some other factors, we can see that after the continuous inflow of global money coming in the last three months, leaving August, in July it was quite net positive inflows and before that in June and April and May also. In August, that is not the case.
The net inflows and outflows from global money in August are balanced against each other. There is hardly $1 billion plus kind of number which is quite flattish.
Read more on economictimes.indiatimes.com
