What Stocks to Buy when the Market is at its Peak?

Dear Friend!

Your question is a very good one, as today the Indian markets are at their record highs. The Sensex is above 30000 and the NIFTY is above 9300. An investor naturally wonders what stocks to buy in India at these levels. Fortunately the key to this riddle lies in the nature of the market itself. The stock market is an imperfect and irrational one. Because of this imperfect market behaviour, a value investor mostly is able to find good opportunities to invest in wonderful stocks at reasonable prices.

Let us see the good stocks that are still available at attractive valuations even when Indian markets are at record highs:

The dividend yields of SJVN, NLC and GE Ship are slightly below the minimum dividend yield expectation but their Price to Book Value Ratios and Price to Earnings Ratios are in the attractive zone.

In conclusion, in the imperfect stock markets an investor usually is in a position to buy good stocks even when the markets are at their peaks.

Thank you,

Best Regards,

Anand

Bull Market Slide

Bull Market Example Slide

Bull Market Definition

Bull Market

Bull Market is a condition of the stock market when there is widespread optimism in the market, reflected in high prices of stocks. Often this enthusiasm is unjustified and the two crucial ratios, ‘Price to Earnings’ and ‘Price to Book’ shoot up and make stocks expensive for purchasing.

Many innocent investors enter the stock market at these high levels, lured by the possibility of making a fast buck.

For the discerning value investors a bull market is not the right time to buy but the best opportunity to sell the shares bought and painfully accumulated over a long period of time at lower prices and book profit.