We all know that markets are currently trading near their all-time highs and the interest in the stock markets is at its peak. We hear of people from all walks of life wanting to participate in the stock markets. Then there are also those who feel left out. Since 2020, the markets have been on a ride, the rise in the markets has been meteoric and one of the most aggressive rallies we have ever witnessed.

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While this is great news for people who were invested, it has created envy and a sense of missing out for those who could not participate in this rally for several reasons. Many investors who missed the Bull Run often wonder what is it to be done now that they have missed the bull run.

Thus, given below are a few things that an investor can do:

Although the markets have rallied very aggressively in the past few months, by no means can one say that the bull market is over, in fact, if you look at the data on the ground and on charts, it has only begun, this year markets have simply covered up for the knee jerk reaction which caused it to fall due to COVID. So it is advised to the new investors to be patient for a correction and urge them to buy into a pullback. It has never been profitable to chase a rally especially when it has matured.

Next, it is no secret that valuations are stretched, investors are advised to keep a nimble approach towards their investments. Stay with the momentum and exit fast, it would not be wise to hold on to falling knives if and when they do correctly.

Stick with large companies that are market leaders preferably in ever-green industries such as FMCG and Consumption stories. The reason being that these stocks always find a good cushion while correcting.

In the same vein, a piece of advice for investors will be to stay away from Small / Midcap and cyclical names. That segment is too heated and is likely to underperform over the coming months. New investors should start a SIP into Nifty 50 Nifty, Value 20, Gold, Gilt, ETFs in equal proportion. This will ensure that you are investing prudently and your risk is spread over time and the investor is benefitted from averaging his cost even if the markets correct in the short term.

Lastly, another strategy one could deploy (Only experienced investors should do this) is to write far Out of the Money put options of fundamentally strong companies. This way if they correct, one can take delivery at juicy valuations and if they do not, the investor gets to pocket the premiums.

The author, Gaurav Udani, is Founder and CEO at ThincReBlu Securities. The views expressed are personal

(Edited by : Anshul)

First Published:Nov 9, 2021 8:24 AM IST