Woman should remain focused on her long-term goals and doesn't get carried away by recent momentum.
Auto as a sector is till underpenetrated in India compared to other developed and developing economies and has long runway for growth. With increase in income levels and growth in economy, autos are bound to benefit. The correction in auto stocks gives us an opportunity to accumulate very strong franchises at reasonable valuations, Meenakshi Dawar, Fund Manager, Reliance Mutual Fund said in an interview
Q: Midcap index rallied reasonably well in recent days, do you think one should start buying stocks in a staggered manner or is it too late?
A: Over last one year a lot of midcaps have corrected and are now available at a reasonable price and provide good entry opportunity. Given the environment is very dynamic and mid-cap companies require far more research than large-cap peers, it is best managed by professionals. A part of investment can go into mid-cap funds, but the investment horizon should be long, and one should maintain discipline while investing.
Q: Auto stocks are sharply off their highs. Is it time to accumulate those stocks?
A: Auto as a sector is till underpenetrated in India compared to other developed and developing economies and has long runway for growth. Just as an example, India car sales is just 15 percent of China car sales. With an increase in income levels and growth in the economy, autos are bound to benefit. The current slowdown in the industry is temporary in nature and can be partly attributed to the slowdown in financing. The correction in auto stocks gives us an opportunity to accumulate very strong franchises at reasonable valuations.
Q: For the last couple of sessions, the theme of the market is to buy beaten down stocks including housing finance companies. Do you see any value in these stocks or still better to stay away?
A: After years of strong growth, housing finance companies are now consolidating. The reason has been low liquidity post issues with select NBFCs. There can be increased regulation on the liability profile and leverage norms for these companies. However, long-term opportunity in the sector remains upbeat and HFCs with a strong retail franchise with good management will only come out stronger in this environment and we will suggest aligning to those companies.
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