Harness the Value that Awaits You

The BSE Sensex is down by more than 8 per cent on YTD basis in 2022 so far while it is down by more than 11 per cent from the highs of 2022. A technical bounce-back is already underway as I pen this editorial. At these levels we can also expect some institutional buying to start as they are sitting on a pile of cash post the exodus of selling in the last few months aided with depreciation in rupee. While we are not out of the woods yet, resilience and support at Sensex’s 55,000 levels can provide comfort to the bulls.

In the current weak market sentiment phase several high dividend-yielding stocks are seen trading lower on YTD basis and are available at attractive levels. Our cover story while explaining the benefits of investing in dividend-paying stocks over non-dividend-paying ones highlights some of the high dividend-yielding stocks that have outperformed the BSE Sensex in 2022. Dividend stocks come to the rescue of investors when market value provides no returns. We hope this story spurs you to accumulate some dividend-yielding stocks for your portfolio.

In one of our special reports, we have discussed at length the importance of including ‘high profit margin’ stocks in the portfolio. In the special report we have also provided four stock recommendations that showcase above average profitability. Benefit from the stock recommendations as the timing cannot be better for long-term investors. In another special story of ours we have simplified the concept of ‘Lindy Effect’ and explained the same by relating it to the stock market. It is interesting to note its application to the markets. Do share your feedback on the same.

While the global market is reeling under inflation pressure and the same is dragging the Indian markets down, there is a strong sense of confidence and inherent strength of our country with respect to the Russia-Ukraine conflict, China’s manufacturing disorder, increased wheat demand, faltering neighbouring economies and the expectation of normal monsoon. Also, on the bright side, one should know that some of the best periods for equity investing are when inflation cools down. So, while it’s increasing now, it is a matter of time before it peaks. For this we will continue to track inflation data closely along with the earnings.

I can see that several companies have announced stellar set of results. However, owing to the pessimistic market sentiments the PE ratios have contracted. Hunting for opportunities where the earnings have been positive and the share prices have not moved accordingly can be highly rewarding. In addition to this, do aggressively consider value investing. While value has not done well in the last two years its time appears to have come and should be actively considered in your portfolios. Overall, pace out your investments, continue to grab good values and, most importantly, remain cautiously optimistic.

RAJESH V PADODE
Managing Director & Editor