At all-time high, Is it a good time to book profits in the stock market?

In March, everyone panicked and missed the rarest opportunity to Invest at discount prices in Shares. Index from its lowest position managed to rally…

Table of Contents

Table of Contents

In March, everyone panicked and missed the rarest opportunity to Invest at discount prices in Shares. Index from its lowest position managed to rally up by 50%. An 10 lakh investment is worth 15 lakh today. 5 lakh profit is handsome in 6 months. At 6% it takes 8 years to gain 50% in Fixed Deposit from bank.

But here we are not going to mourn the missed opportunity. We are going to talk about those people who spotted the opportunity, volunteered for the risk and now, are sitting at comfortable profits. Smiles πŸ™‚

Nifty since 1 year?

Slump to Record High.
Let’s zoom out and take a look at this nifty with a bigger frame. The market literally collapsed into the deep valley during March month, but steadily and slowly it recovered. If any market expert made a daring prediction of 13000+ in nifty within 6 months, that would have hurt his or her profession and reputation. Now even you know that, In spite of lockdown and overcoming multiple hurdles Nifty managed to recovers and shoots up to an ALL-TIME HIGH level. 10 lakh invested 1 year back in nifty ETF(Exchange traded fund) is worth 11.4 lakh after 1 year.

Since nifty is at all time high, Everyone demands to know β€˜Is it best to book profits and exit now?’

You could exit now and one of these two scenarios can playout.

1) You are correct and market fell

2) You were wrong and market kept going up after your exit.

Historically there were five times you were correct in exiting market at peak.

a) year 2000 exit at peak 1800 . market fell by 55% , 900 in next 20 months.

Sujith Salunkhe

Btech in Information Technology followed by an PG in Financial engineering & Risk Management from National Institute of Securities Markets. Certified Investment Advisor XB, FRM (USGARP) .

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