Last updated: 16 Dec, 2020 | 03:44 pm
The headline indices have soared to fresh record highs. Nifty has risen by over 11% in the last one month alone, leading one to ask whether it is the right time to book some profit.
Markets have become extremely expensive
Over the last month, the markets have risen on various factors starting from signs of economic recovery in October, US election outcome, and the news around vaccines. However, over the long term the direction of the market will be driven by earnings. Considering this, the market is expensive on nearly all measures: P/E vs own history, ERP (Equity Risk Premium), and World & EM. View Chart below:
India and Emerging Markets
Our proprietary VGQM model has a ‘Neutral’ rating on the Nifty 50, indicating that the ongoing rally is not supported by fundamental factors. Therefore, we advise you to: