Overvaluation in markets due to mutual funds
Hi, does anybody here think that markets have become overvalued due to continuous inflows from mutual funds.
I don't track stock markets that much but i know that DIIs are continuously pumping in money into the stock market whereas FIIs are taking out money. Due to which market is not correcting at all.
It's just my opinion that share prices are not going at all due to people buying dips all the time either buying direct stocks or through mutual funds.
I have also read that parag parikh flexi cap fund which has gotten very popular due to its return is currently holding 15% of it's portfolio as cash due to overvaluo.
What do you guys think about this , or do you have any good material on this to understand. Thanks
I don't track stock markets that much but i know that DIIs are continuously pumping in money into the stock market whereas FIIs are taking out money. Due to which market is not correcting at all.
It's just my opinion that share prices are not going at all due to people buying dips all the time either buying direct stocks or through mutual funds.
I have also read that parag parikh flexi cap fund which has gotten very popular due to its return is currently holding 15% of it's portfolio as cash due to overvaluo.
What do you guys think about this , or do you have any good material on this to understand. Thanks
I see a contradiction here - 1) Started with DIIs buying 2) ended with PPFCF sitting on cash.
Aren’t these two things opposite?
Anyways, my take here is - Pockets are overvalued and it might see some corrections.
When? Nobody knows!
Potential approach? Move some profits to fixed instruments and keep adding at every 2% dip.
On valuations - I think it’s a structural shift & more retail participation. Every 3rd middle class person is talking about IPOs. Retail frenzy will remain till markets give comfortable returns, many people will walk away if there’s > 10% corrections. People sitting on huge small/middle cap piles, almost like sitting on RDX, waiting for a spark.
Yes DIIs are on a buying spree, however PPFCF is on exception (could be more) who are restraining from deploying all the money into stock market. Atleast large caps are relatively safe than mid and small caps. But nifty reaching all time high almost every week or month now makes me kind of cautious. I don't want to stop investing but at the same time being cautious at this time
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Anise Lee
Stealth
22 days ago
Hey, so the trend this quarter has been FII and DII have both been buying. $10 billion dollar each. Yes, market is looking stretched right now, but we can’t say for how long this cycle might last. So it might not be smart to completely avoid it, but keep some investments in fixed income/multi assets.. and for equities, look for flexicap/large cap funds.
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