Fund managers from America to Asia are saying something but doing something else. All fund managers seem to have a consensus that markets are over priced. Too expensive, they tell you. Look at their portfolio, there is not too much cash.

Almost all Indian mutual funds are launching one Open funded a week – giving it some amazing name and logic. Yes, they are chasing top line. And as usual for chasing the top line, they are happy to give up the bottom line.

Individuals too will talk about a bear market which is about to happen..and end the conversation with ‘Are you continuing to buy Cholamandalam? or Asian Paints? or Hdfc? or Lakshmi Machine works? or PnG? Please remember I may be having a 30 year view and you may be having a 30 month view (or lesser if you are a millennial).

For most ‘intellectuals’ perma bear sighting is a daily occurrence if not an hourly sighting. Most of the intellectuals think they look smart by talking about the coming bear rout. However, the high PE ratio of 30 is not stopping them from buying Hdfc, hdfc bank or even Axis bank, Indiainfoline or an Edelweiss at elevated PE!!

The perma bears do nothing for your portfolio. They ask you to be in cash – which is the worst asset in the long run. These guys can neither make you money nor protect you in a downside!! However, they can sound intellectual and smart in a TV show. So when a client with Rs. 1 crore wants to invest, do you ask him to invest it in a fund (yes client has the appetite but not the need) which is pure equity or put it in a liquid fund and put Rs. 1L a month into an equity fund. A flexicap equity fund? I think the latter is a better option.

Surely in 2022 when you look back it will not be as though you will beat your chest and say “Oh I wish I had invested in 2018′. Market is surely not at mouth watering levels. You are much better off in short term debt paper – less than 2 years duration for sure. If the amount is very big go for a 90 day duration fund. The chances of a negative return in one or 2 quarters is further reduced by this 90 day duration fund.

Rising interest rates will bring some stress into poorly managed NBFCs – and that is going to be a big problem for 100 out of the 130 mortgage companies. They will not get fresh money – and their old book cannot be re-priced.

So let me tell you what I am doing. I am letting the SIP continue – my bias removal technique in a part of my portfolio. In my equity portfolio I am leaving my major portfolio intact, and not selling off just to do asset re-allocation.

If I find Cummins attractive at 790, I am happy to take a trading position – of say 500 shares. Why 500? so that I can add another 500 at every fall…say accumulate 4000 by the time it reaches 650. No issues accumulating this share. If it goes up and goes up on good demand I am a seller at 900. Why sell? I love to buy ONLY when shares are at mouth watering levels to add to my portfolio. Eid parry at 310 is not mouthwatering. Nor is Tata Motor DVR at 210.

On needs patience like a vulture (or an alligator) to stalk, aim, chase and kill.

So if you have cash, and are good at trading, this is a trading market. However if you are confident of some sectors and those sectors are not expensive, you could add those shares to your portfolio. Being ready for a fall, and being nimble footed is far better than waiting with cash waiting for the market to come down. More money is lost waiting for a correction to buy rather in a correction itself.