Best ways to approach markets when it’s showing signs of cooling-off

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The domestic equity market has been trading at new lifetime highs since the past couple of days, mirroring the global market indices, which too are moving at their peak levels. But mid-week, developed markets showed signs of sluggishness, especially after the Fed minutes confirmed likely tapering, July retail sales data in the US came in below expectation and China reported sub-level growth rates for July. Alok Jain, Founder Weekend Investing, shared insights on the best ways to approach markets which may be showing signs of cooling off.

“Pandemic forced people to stay at home which led them to enter stock markets to get higher returns. Markets have in fact broken all record in history in the last 1-1.5 years. No other asset class has give such returns to investors, however it is very difficult to predict what will happen to the rally going forward”, he said.

He said so far in the bull run, he has focussed on where was strength of momentum has been and apply funds where liquidity has moved and not focussed on the economy as such.

“Price is God for us and that’s what our principle has been to chase money flow”, he added

He also shared the reason why he named his advisory Weekend Investing was that he will look at the portfolio only once a week before the weekend and just spend five minutes on it and cut out the daily noise and stay with the longer trends.