What to buy with D-St at lifetime high? Keep good company, go for largecap stocks
Sensex has reached a new high. Should you consider waiting for a correction? Well, as veteran investor Peter Lynch famously put it: “Far more money has been lost by investors preparing for corrections, than has been lost in corrections themselves.”
Looking back, previous milestones such as 50,000 and 75,000 appear as buying opportunities. Investors would have earned double-digit returns even if they purchased at earlier 'record high' levels.
“The market has reached at least one new all-time high every calendar year for the last 8 years straight. In 2024 itself, the Sensex had closed at new life-time highs 25 times. It could be intimidating to invest when markets are trading at new highs… but one would have been left out if they kept waiting for the perfect opportunity,” Apurva Sheth, head (market perspectives & research) at Samco Securities told ToI.
The 10,000-point rise from 70,000 to 80,000 represents a 14.4% increase. Achieving 80,000 to 90,000 will only require a 12.5% gain. Consistent investment, regardless of new highs, remains a prudent strategy.
The key question then is what to invest in. “Valuations for large caps are more favourable as mid & small-cap valuations are ahead of their long-term averages. In the current market environment, we prefer investments in flexi-cap strategies with a large-cap bias while still allocating tactically to mid and small-caps,” said Virendra Somwanshi, head (wealth management & capital markets) at Bank of Baroda. He added that investors should invest with a horizon of
