The stock market is hitting new highs on a regular basis. Many stocks are touching their 52 week or lifetime highs. New and astonishingly higher targets for Sensex and Nifty are being floated by market experts in a mad scramble to outdo each other. A frenzy of bullishness is being built up – but for whose benefit?
If you are a new or first-time investor in the market, it won’t be surprising if you are getting caught up in the frenzy. With stories of fantastic multi-bagger returns from unknown stocks doing the rounds, getting the ‘left behind’ feeling is quite natural. Who doesn’t want to get on the bull bandwagon and make a ton of money in quick time?!
Jumping in feet first into the market is precisely what stock brokers and market experts want you to do. Brokers make money on the number of transactions they do. The more the merrier. Market experts have bought at much lower levels. They want to dump their holdings on to unsuspecting novices at higher prices.
What should a small investor do? In a sensible article published in Business Standard, new investors have been advised to take a look at balanced funds. The advice is sound. The growth option is often preferred by young investors. The dividend option is safer – as it acts like partial profit booking when NAVs become too high.