2017, has been a good year for Indian stock market so far and sensex has already crossed mount 30k. It has been the same story for most emerging markets across the world. We saw good gains in rural, real estate & FMGC sectors while automobiles, pharma & IT remained sluggish.
The big question in everyone’s mind is how far this rally is going to continue & what sectors to invest now.
While we do not claim to predict the future but based on our analysis, AI believes that 2017 can be a year for cement, consumption & agriculture based sectors. There may be some gains in steel & textile sectors as well but it shall remain limited from here onwards.
It is always good to have some sectors remain laggards while some sectors shine as it balances out overall growth prospects instead of all peaking or weakening at the same time. For investors, it keeps new opportunities popping up all the time.
During these euphoric times like today, there is a need to be cautious as Warren Buffet in below quote, aptly warns us:
You also might have made great returns in 2017 but as ace investors, it is time to preserve your gains and be sure that you are swimming with swimwear on. It means your investment philosophy should be watertight to sail you in case there is big fall in stock prices.
Yesterday, we recommended a stock as part of Tiny CAPS service. This stock is a good play on cement as well as sugar sector, both are poised for good growth. The best part is that this stock has not participated in recent rally, so its valuations are pretty reasonable (@ 12 P/E). It was a darling stock in year 2015 & early part of 2016 when it rose more than 340% in short span of time. During that time, speculators invested too much in anticipation of “V” shaped earning recovery. After some time, they got anxious and left the stock.
Now, when the earnings are really showing up, they have moved elsewhere and seems to have forgotten about this stock but AI has not. Go & find out more about this recommendation service here
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