The US markets rallied by thousand points on the news that the vaccine was had passed the first human trial. Let's take a look.
A company called Madonna things that it's very vaccine has cleared the first clinical trial.
This is not an official announcement by the company. This is a news leak report. The news report says that out of 45 trials, this vaccine has meant considerable success. This does not mean the vaccine is out tomorrow.
It has to go through a lot of human trials before it's announced. Before that the market thought the entire pandemic is over. And the markets raised 1000 points that get something clear, even if the pandemic is over tomorrow, and within three months.
Most of the people in the world have a vaccine. Still the problems persist the shock of stopping the world The economy for three months is humongous. This is a vehicle that has come to a stop completely and is going to take a long time to get it restarted. This kind of optimism, optimism is not justified. Even the attorney optimistic, Jim Cramer suggests a barbell strategy.
What is a barbell strategy? Basically, a barbell is a weight lifting tool, which has weights attached on both sides of the wrong road so that we can lift weights and you get fitter.
What is he suggesting is one end of one one end of the road be loaded with weights that consists of stocks that will do well in spite of pandemic there are plenty of stocks, which according to him will do well in spite of pandemic problem . On the other side, you take stocks, huge bets, like the vaccine maker Madonna. So even if one barbell face, the other will succeed and you will still survive.
That is his logic. But my logic in India is that that should be to burbles, one side loaded with gold and another side loaded with stocks with decent valuation. And as the market drops, you continue to add more and more positions.
Even if there is a complete stop of the pandemic tomorrow, and the economy assumes in full swing, India is going to pay the price for the next three years, you're going to get a plenty of time to buy these assets cheap. So it is better to add small pieces at regular intervals of time.
Like I've said several times, the nifty is going to go down by 10 to 15 nifty earnings is going to go back 10 to 15%, resulting in a huge correction in the nifty wait patiently on buy on bad days.
Make a list of stocks and wait. If you have further cash mindset If you don't have enough gold reserves to keep buying gold at regular intervals, because tomorrow the market really corrects, you can go pledge all the gold, take that money and put it on the market and wait for the next five, six years.
So you get a winner all the way does it makes great sense in India to a barbell strategy of gold and low pressure stocks with attractive valuation. Try this you will do well. Thank you
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