Monday, May 18, 2009

Buy or wait ?

The markets have reacted spectacularly to the NDA's good performance in the Loksabha polls which should herald a stable government. The question is - how long and how much can the markets go up? I feel that considering the short to medium term economic outlook and adding in the global situation, the markets should go up another 1-2000 points and then stabilize or correct slightly. In the long term i.e. over the next 1 year or so, I expect that we should see a 20-30% further upside since the government would be able to translate some of the expectations into results.

If one hasnt yet invested, the strategy would be to buy around 20% now, and add the remaining 80% of the target amount over the next 3-4 months.