investing in stocks? need to time it well

Keep an eye on economy, politics, sentiment

It is a common question, whenever the markets are reeling under bullish fever. Let us consider the following. Now the Indian economy is not stable, recently rupee plunged to an all time low, GDP is showing downward trend, inflation numbers are going up and IIP numbers are stagnant.

One should still consider investments in stocks? Analysts say a big yes.

It is worth investing in stocks, of course, very cautiously. For the simple reason that the bellwether BSE barometer index Sensex is doing relatively well and those who can read market-pulse can see FII inflows increasing and political sentiment on a rise with BJP’s win in recent elections. But also consider that the coming year will be election year, when the politics weigh more on bourses.

But another school considers that the dramatic rise of Aam Aadmi Party (AAP) may turn as stumbling block in the way of BJP, to which party the markets looking for change. As, there will be three-cornered contest in many states and most often it results in favour of regional parties, thus again opening door for third-front kind of government, which may be take shape only after the polls. So, it will not be a cakewalk for NDA or Narendra Modi. Thus, the markets may not reach expected highs and in fact, they may see much more volatility till the political scenario settles down. The picture appears less rosy.

Moreover, it will be also in the hands of next government, which is difficult to predict, especially under present political scenario. For, whether to invest in stocks or not, one may not get perfect answer. But, those already invested, it is time to book profit, and wait for opportunity to buy again, at lows.