Is the current market rally justified? Specifically when a third and fourth COVID wave is also expected.
-Apoorva Narain
The fact is, that I don't know anything about this, whether there will be a third or fourth wave and what happens to the market as a consequence. People have been waiting for a market correction for about a year now and it hasn't happened. The kind of liquidity that we are seeing, is driving the market. There is a possibility that the market will correct if a lot of people start pulling their money out at one go. There are a lot of things that can happen in terms of interest rates going up or something like that. But all that is in the realm of possibility.
But we really don't know what will happen. So if you are investing for the long term, carry on with your investment and be there. Maybe change your asset allocation a little bit. If you accidentally drifted into the market and are a beneficiary of this rally, and if you are likely to need your money over the next two to three years, take out a substantial part of your money. Because a possibility of the market going down can't be ruled out and if you do not have supporting time by your side, you will be in great difficulty.
This article was originally published on July 02, 2021.
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