When will the Sensex touch 25000?

by Manshu on October 10, 2012

in Opinion

I hope regular readers are surprised by the title of this article because this is not the kind of prediction I ever make, and philosophically, I feel that people should avoid “pundits” who make market predictions.

So, why the title? Because the following comment appeared on the Suggest a Topic page last week.

lalit October 7, 2012 at 10:07 pm [edit]

Will Sensex touch 25000 mark? If yes, when and why?

REPLY

Short answer:

I don’t know, and if I did, I certainly wouldn’t have wasted time writing a blog.

Long answer:

Shiv told me a few days ago that he’s getting calls from clients asking what they should do in this rally, and people have a feeling that they’ve been left out on the sidelines and what’s the next course of action for them.

For anyone who has spent any amount of time near the markets, you shouldn’t be surprised with these type of questions, and especially the timing of these type of questions. People get interested only when something goes up, and when it’s down, no one is willing to buy anything.

I believe this is a good time to to think about what you will do when the market falls next.

That’s usually my approach, I’m a regular equity investor, but I’ve pared down my investments in the past few months, and I’m building up cash so that I can take advantage of the next downturn. This does’t mean I expect the market to go down any time soon, just that I feel it won’t be a one way journey where if you don’t invest now, you will never be able to invest at these prices (I  have not stopped completely because I know I can be wrong). I’ve never bought that argument.

In my opinion, having a plan on what you will do when the market falls next is going to be a lot more useful than trying to find out when will Sensex hit 25,000. Before you look for answers, you need to ensure that you’re asking the right question.

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