Nivesh Mantra: Balanced funds and multiasset funds are useful tools for the low-cost market

Whether small- or mid-cap, their current valuation in the pricey market is rather high. There isn't much room for expansion in large caps. Multi-asset funds and balanced advantage can be wise investment choices in this kind of situation. Ajit Singh's report tells the complete mathematics of this-

If we look at the stock market at this time, now is the time for decline due to expensive valuations. The further direction of the market will be determined by valuation de-rating and earnings growth. If seen from a sector point of view, the biggest investment opportunity is seen in private sector banks. Shares of some good banks are trading at valuations lower than the long-term average. There doesn't seem to be any fundamental reason to trade at these valuations. These banks also have a positive outlook on consumer services. Due to weak demand, the shares remained at good valuations. In such a situation, whenever the consumption of India's middle class increases, there will be strong demand in these sectors.

The field of information technology (IT) also seems appealing. During a period of elevated valuations, hybrid funds—particularly Balanced Advantage funds and multi-asset funds—represent attractive investments. Putting money into these funds will shield you from market losses. Additionally, as valuations improve, equity investments will automatically rise. You can invest in a large cap in such a scenario.

Growth stocks might do better in the coming year. Value index is currently trading higher than its previous five-year average. Value stocks rose as a result of re-rating and a lower base. Future stock prices will be determined by earnings growth, and growth stocks are better positioned to perform in this regard.

Ajay Tyagi, Head of Equity, UTI AMC said that the market has been very bullish in the last year. There is a possibility of a decline after such a rise. In such a situation, investors should invest carefully.