Sensex, Nifty on record-breaking spree but experts caution against reckless buying

The amount of money redeemed from equity funds this year (till October 2023) is 46% more than a year earlier. It is also the highest in recent years.

Similarly, those who try to enter the market at the record high level may take longer to see a sizeable profit.

"Such attempts to time the market often backfire, working against investors' interests and failing to yield better investment results. Long-term investors tend to fare much better than those attempting market timing," Nilesh Naik, Head of Investment Products at Share.Market (PhonePe Wealth), told CNBC-TV18.com.

Data shows that staying invested is a safer option than trying to time the market.

 

Decide on an appropriate asset allocation based, say, between equities, fixed income, gold, real estate etc.

This allocation should be based your financial goals, risk appetite and how long you would like to be invested.

When the stocks rally, the value of your equity investments increase, skewing your existing portfolio in favour of equities. "A portion of equity assets can be redeemed to revert to original asset allocation and vice versa," says Manish Goel, Founder & Director of Research & Ranking.

Nitin Aggarwal, Sr-Grp VP at Motilal Oswal Financial Services, believes the future looks bright for banks.

Aggarwal's top picks among banks include ICICI Bank, IndusInd Bank, State Bank of India (SBI), and Axis Bank. Within Non-Banking Financial Companies (NBFCs), he favors Cholamandalam Finance and PNB Housing in the housing space, alongside Angel One in non-lending financials.

On the hand, Rahul Singh, the Chief Investment Officer (CIO) at Tata Asset Management stressed expressed optimism towards cyclical sectors, specifically recommending banking, infrastructure, manufacturing, and capital goods.

Cyclical sectors are closely tied to economic cycles, often performing well during periods of economic expansion or recovery.