3 things to do when the stock market is trading at all time high - YouTube

Hi, Sensex and Nifty are at their all-time high, and investors are confused to book profits or stay invested

So we will today talk about this in the video, let us start

Firstly, you should analyze and categorize all the stocks in your portfolio and should see them in 2 categories

Long-term and Short-term. Long-term is the stock in which you have invested after research

and expect a long-term growth potential.

And to sell these types of share on market highs would not be good for you because these ups and downs are temporary

But your long-term wealth creation is dependent on these stocks only.

To sell a stock that has shown good growth in business and will just because it has given you a decent profit wouldn't be beneficial for you

The second category is the short-term stocks which you bought in momentum, from a tip, or from a news

You should access these stocks and even after research you don't get clarity on their long-term potential

You can book small profits in these stocks

Many people say that as soon as they sold the stock, the share price went up

To not have FOMO, fear of missing out, don't sell all your stocks at once

You can hold some stocks from your overall portfolio

The second point is diversification and asset allocation

You can check your portfolio on the basis of the industry diversification

And see that a major portion of your portfolio is into one or two main industries

And if so, you can sector-wise diversify your portfolio

meaning if any sector sees a fall, the other can offset it for you.

And after this, you should analyze how much is your portfolio diversified

Is all your portfolio is invested into stocks, if so you can book some profits from stocks and invest

in gold or international equity and allocate in different assets

By doing this you will reduce your risk and will be able to attain exposure to other avenues

The third is that even if Sensex and Nifty are at all-time highs, it doesn't mean that you wouldn't find undervalued stocks

When we say undervalued, many people think that a low PE which is below the industry average is undervalued

This is not mandatory, some of the companies have low PE due to poor past performance

or these companies have some red flags

Some stocks fall due to some temporary over-reaction or a bad news

And this can be a good buying opportunity, and to know about them, you can research those industries in which you are comfortable

For example, if someone works in the banking industry, can research about the same

and can get to know undervalued stocks in the industry

So these were the pointers you can keep in mind when the markets are at their all-time highs

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This video is only for educational purpose, it is not a buying/selling recommendation