In this interview with ETMarkets, Vivek Bajajco-founder of Elearn Markets and StockEdgedeals with which stocks or sectors to bet on or avoid and where to expect the market to bottom out.
Markets are falling incessantly as fears of inflation and interest rate hikes deter investors. Experts think there may be more selling pressure. Where do you see the bottom?
It is a challenge to predict bottoms and tops in the market. First, price confirmation should be when the market bottoms out. I look for bullish reversal charts such as double or triple bottom patterns on weekly time frame charts to confirm that the market has bottomed out. As of now, however, the patterns have not started to form.
Is now a good time to take counter bets and gradually increase stock ownership, and if so, why? What type of investors should be going against the grain right now and investing more in stocks?
Counter bets are always high risk, high return bets. So one has to look for such possibilities. Only experienced traders can take counter bets because they are risky. I will advise newbies not to take such trading but to experienced traders and investors. This type of counter bet can pay off with trading that is risk managed.
Which stocks/sectors do you think could be good bets right now and which ones should be avoided?
Investors can look at the three sectors – FMCG, auto and pharma as they are relatively strong compared to the benchmark index. As a result, these three sectors are expected to perform as the Nifty50 begins to recover.
† Back to recommendation stories
Many investors, especially newbies who invested directly in stocks during the recent bull run, are witnessing massive pain in their portfolios. So, what should their stock strategy be now?
India is a growing economy and in the long run the markets will eventually expand. Investing is a game of enormous patience. Investors should remember that today’s pain is tomorrow’s gain. I advise newcomers not to fidget and focus on creating long-term wealth. Investors should focus on the long-term view rather than focusing on the daily movement of prices.
What should be the holding period when investing in the current market?
If you invest in stock markets, the minimum holding period for investments should be at least three years. Wealth arises in the long run. As an investor, you should try targeted investing. For example, you invest for long-term goals such as retirement, a new house, a new car, and so on. Your investments will increase over time.