As of today Dec 27, 2020 the Indian Stock Market is Over-valued based on:
- NIFTY PE Ratio which is at 36 compared to the previous peaks of 30 during 2008, 2000 etc.
What you should do?
Following are the changes recommended:
- Futurecaps Recommendations Hold the past recommendations since they are trading below the Intrinsic Value. You can buy more the recent 2 recommendations which are around Buy Range.
- Non-Futurecaps Recommendations Hold/Sell in few months at their Peak based on the Intrinsic Value Calculation & Move to Fundamentally Good Growth Scrips so your P/f returns will be boosted.
Following are the changes recommended on Free Cash Holding:
- Maintain 70:30 Ratio (70% should go to Stocks & 30% to Cash Funds like FD, Bond etc.)
Remember the Golden Rules of Investing.
Any bear attack are Opportunities to Buy a Fundamentally Good Growth Stock! (You should be having Free Cash at this time)
What could happen going forward?
Market may go even higher in the short-to-medium term due to:
- FII is continuous buyers
- Smallcap & Midcap have different Cycles
- We are hardly 1 year from a Pandemic induced Bear Market
- The Global Economy seems Recovering from Corona Troubles
- Lifting of Lock-downs & Introduction of Vaccines will accelerate the Economy Recovery
- US is coming with $2000 Stimulus Checks which will boost the US & Asian markets again
Smallcap & Midcap Index have 50% more Uptrend remaining
However one should not forget that during Over-valued times any Bear Attacks will cause Higher Depletion to smallcap & midcap segments in order of 50-80% levels. (On the contrary any Bull Run will give Super High returns like 500-800% too)
Overview of 2020
During 2020 we have recommended around 15 stocks (Best Value in India) & it gave high Performance like 100-200%. Even our Hidden Gems had rocking performance too. All these keeps our words to be Best Value Advisor in India.
Futurecaps will come with New Recommendations starting 2021 January itself.
Happy New Year All! (In Advance)