There are many people who ask me “is this a good time to be investing”. I counter this by saying “Anytime is a good time to start a SIP”.

Let us see what happens to people who want to pick up stocks / shares and keep it for a long time. Should long term investors be picking up shares now?

Personally for me, a win here or a loss there does not matter – i have holding periods of ‘forever’ so a sub optimal performance of 2 quarters is something that I can handle…..

If you are asking me :

Is the market over valued?

Not sure – only the future tells me the truth! Yes at a price earning ratio of 17, the market is surely NOT CHEAP.

At a dividend yield of less than 3% generally and about 1.4% on the sensex is also an indicator of the market being over valued.  Of course unlike most of us born in the 60s, investors today seek growth – so dividend yield is going out of fashion, but hey this is a good indicator.

The debt market is NOT in a bad shape…current yields are in the region of 9% for good decent quality debt. If interest rates do go down, portfolio gains will also kick in. However please do note that a good well selected equity portfolio can give returns in excess of 12-14% over a 7-10 year time frame.

The market has given a 24% return for the calendar year 2012 – and that does not mean we know what it will do in 2013, 2014 or 3012…..

 

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