Good times don't last

Dear Investors, 

At ABM Investment we always believe in educating and updating clients by managing risk together with returns. Plese find below a note on what can we expect from markets :

*Good times don’t last*

To give hope, it is commonly said that bad times don’t last. But what is often unsaid is good times *too don’t last.*

Markets have had a phenomenal run. Our wealth is at all time high. Normally when past returns look too good, it is time for muted future returns. 

Markets, like life itself, is cyclical. *Neither bull nor bear market lasts forever.*

Prediction is a difficult business and I’m not capable enough or have any divine power to   predict. Having said that, I might not know when, I know for sure a deep correction would definitely follow. 

But when? 

May be next month, next year or next to it. 

The longer the bull run goes more deeper would be the correction. 

Their could be one of 2 scenario : 1) Time correction : it means muted returns for longer periods and 2) Value correction : A sudden fall from current level and then normal returns going forward.

Always remember markets cannot grow more than their earnings and those earnings cannot be unreasonably valued. There are some segments where earnings seems to be too much stretched. 

I can get market direction wrong. But I would always like to err on the side of caution.

I'm optimistic when it comes to growing wealth through Indian stock markets. There is no change in that. India will create immense wealth in the next 25 years, which we can't even imagine....But journey won't be in a straight line up but more of a upward sine wave.. 

I’m not recommending to sell or moving sideways as no one is talented enough to keep hopping in and out and making profits. 

But yes if you have any short term goals it's time to shift that money in debt.