@vishal_lehar
I have been almost fully invested in the markets since past 4-5 years barring the ocassional few weeks or months when I have sold something and it takes a bit of time to replace it with something else.
But of late since past 2-3 weeks I have been feeling slightly uncomfortable about the markets. At the current juncture we seem to have begun a parabolic phase of the markets where indices go up at breakneck speed and still market breadth is very poor. It gives a slightly dejavu feeling when I compare the current markets to the last few months of 2007 when the small and midcap music had come to a standstill and indices still managed to keep posting higher highs. Until January 2008 when all hell broke loose.
Another interesting observation is that a lot of so called fence sitters and die hard fixed deposit investors seem to have thrown in the towel and are now ready to take the plunge into direct equity. I have a lot of doctor friends who were almost always invested in FDs now asking me about prospects of equity returns. And we already have seen the deluge of SIP money coming into markets since past many months.
Short to medium term bull market technical patterns are no longer playing out. Especially in the small and mid cap segments Maybe these are undergoing a much needed pause.
Porinju has supposedly predicted a bull market till 2062. Extreme bullish projections usually happen at the fag end of bullish rallies.
On the other side of argument, whats missing is extreme leverage, deluge of big IPOs, CNBC guys wearing Tshirts displaying index levels and carrying placards displaying index levels , chaiwala and panwala getting into the markets and more specifically advising seasoned investors on what to buy.
The roadmap I personally see is index continuing to go up some more and then hitting a bump and then a correction from where midcaps/small caps might correct significantly more. But thats a personal feeling and not to be taken seriously. Its only that for the first time in a long time I am feeling a bit jittery and I dont want to ignore that feeling totally. So I have exited some of my trading positions and raised cash to the tune of around 20% of the PF. The intention is to raise more cash and keep watching the markets for any sign of froth/weakness in segments and sectors and act accordingly in a faster manner.
Vivek Patil used to write on icicidirect about his predictions on a weekly basis (now it seems he no longer does), One of his favorite time periods was the first quarter of any year i.e Jan to March period. According to him in this period markets have a high tendency to top out during this period. If I recall correctly he also had a theory about a smallish 2 year cycle repeating during the Jan-March period and if that holds true, 2 years on from Jan 2016 we might be in line for a correction.
Sitting on cash is going to be difficult because it is going to be a new learning for me, not having been on too much cash for too long since past many years.
PSā¦ All these are the musings based more on feel than on hard facts and data. So these need to be taken with a pinch of salt.