In November markets have hit a high of 41000 on the Sensex and 12100 on the Nifty scale , this is on back of lots of Hopes of economy bouncing back sharply and Monies flowing into the country by foreign portfolio investors, and not to miss our own mutual fund friends who are pumping in 8000 Crores monthly into the markets.
Within the sensex,stocks of 30 companies forming the index 8 out of 30 have gained more than 20% from Jan till Nov end, while the sensex and nifty are up 11-13% which means the market is up due to select few stocks and it is not a broad based rally, which is unsettling to say the least.
Markets are expensive when it comes to pure large cap funds, so we expect a limited movement in the NAVs of equity funds going forward. Its better to invest in Large & midcap, multi cap funds at this stage apart from value funds since they have been the biggest under performers ,although there is no momentum in the mid and small cap funds,this may be a good time to add mid and small cap funds to the portfolio based on the risk appetite and time frame.
We suggest always to use the SIP or STP route to make investments instead of lumpsum given the high valuations in the market at this stage.