Caution: Small retail investors must stay away from stock market for some time

Sensex is trading in the region of 40,000 points. A big correction was expected since the start of this year. However, Sensex is climbing higher and higher even after slowdown in GDP and much other negative news. It seems some players do not wants Sensex to go down and they are pumping money even on small positive news and ignoring negative news such as trade war altogether.

Most of large cap stocks are already overvalued and market PE ratio is at its high, which is the very important indicator of over valuation. In such scenario, small retail investors and new investors must not buy new stocks to avoid huge losses. Because stock market can crash anytime and wipe away all your hard earned money in a day or a week.

Wait for correction in stock market for few months before investing. Invest your money in less risky alternatives or keep it in your saving bank account for few months and just wait. If you are very keen to invest, invest through mutual funds which are less risky. To read my post about mutual funds, click here.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: