Shrey Jain, CEO and Founder of SAS Online, in an interview with MintGenie, stated that even though markets have hit multiple peaks recently, momentum buying isn't happening. He suggests waiting until genuine conviction buying kicks in. Only then, Jain noted, we even start talking about reaching new highs in 2023. Going ahead, he expects markets will experience a time-bound correction. Consequently, it would be prudent not to expect substantial returns by the year's end, Jain added.
Edited excerpts:
Do you expect the market to consolidate from now till the end of 2023? Or are there more peaks to be hit?
Nifty tried, but it just couldn't stick above 20,000. Bank Nifty, too, took a tumble from its recent high. No beating around the bush, the market is in consolidation mode. Let's be straightforward here – momentum buying isn't happening, and we've got to play the waiting game until genuine conviction buying kicks in. Only then can we even start talking about reaching new highs in 2023.
What investment strategy should long-term investors follow amid these lofty valuations?
No matter if we're talking about Nifty, Bank Nifty, or any other index, the fundamental principle for achieving long-term investment success remains the same: build a diversified portfolio that matches your financial objectives and comfort with risk. Taking a long-term view, ideally over a span of 3 to 5 years, is absolutely essential.
Why have the mid and small-cap stocks been soaring, despite not enough fundamental strength? Should one buy them or stay cautious?
The influx of funds into mid and small-cap stocks wasn't a sign of savvy investment decisions; it was more about chasing momentum, which comes with substantial risks for investors. To determine whether to buy or stay away, if a company is overvalued, we need to evaluate its growth potential. It's important to highlight that many sectors and specific stocks still hold promising growth prospects.
What kind of returns are you expecting from Nifty in 2023?
We are not far away from the end of 2023, and the market has recently reached an all-time high. However, looking ahead, it appears that we may experience a time-bound correction, consequently, it would be prudent not to expect substantial returns by the year's end.
Was the US Fed rate decision expected? What impact will it have on Indian markets?
The US Federal Reserve's decision to maintain the interest rate came as no surprise. The Indian market has already factored this in, and we don't foresee any significant market shifts as a result of this decision.
Do you believe that Dalal Street investors have been enthralled by the IPO market so far in 2023?
Yes, the surging market, fueled by abundant liquidity and a robust secondary market, stands as the primary driving force behind the surge in India Inc.'s fund mobilisation through IPOs. As the market gains momentum, retail investors are flooding in, adding to the hype. With this surge in interest, there's a growing belief that we're in the midst of an IPO boom.
Is now a good time to buy shares in the upcoming IPOs, given the lofty market valuations and record highs?
Investing in IPOs can be a lucrative endeavor. People are beginning to expect that every IPO that hits the market will perform exceptionally well but it's not without its fair share of risks. The key is to do your own research diligently and make an informed decision before taking the plunge.
Is it common for new IPOs to be launched at exorbitant values? Should retail investors only submit applications if the valuations are reasonable and OFS should be handled with extreme caution?
To snag higher valuations, some companies go all out and slap hefty price tags on their IPOs. They often do this by diverting attention from the real nuts and bolts of their business with flashy marketing. This is why early investors absolutely must dig into a company's financial statements before they even think about jumping on board.
The same principle applies to Offer for Sale (OFS) scenarios. It's crucial to grasp why you're being offered shares at a discount and what's behind that decision. You've got to delve into industry benchmarks, growth potential, and the company's story to make an informed decision.
Any IPOs you are actively awaiting?
In the previous year, the LIC IPO captured the attention of the entire industry. Although we're not anticipating in any IPOs of that scale or level of excitement in the near future, there are a couple of IPOs on the horizon that have piqued people's interest, such as NSDL and OLA Electric.
One piece of advice for new investors?
Sure, the market has an upward trend over time, but to ride that wave, you've got to be patient. Don't just follow the crowd and get caught up in the momentum. Take the time to understand the market, and conduct thorough research before making any investments or trades, and you'll reap the rewards.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie. We advise investors to check with certified experts before taking any investment decisions.
