InvestorQ : After massive fall of Market is it right time to start bottom fishing or should we wait for long? Out of Largrcap and mid + small cap which one would be better for investment for next 2-3 years?
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After massive fall of Market is it right time to start bottom fishing or should we wait for long? Out of Largrcap and mid + small cap which one would be better for investment for next 2-3 years?

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Juvina Maggie answered.
1 year ago
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You can bottom fish in such markets but there are 3 things you need to keep in mind to be able to do the right kind of bottom fishing.

· Ensure that you don’t bottom fish in stocks or sectors that are in structural downturns. For example, capital goods has been on a structural downturn in India and bottom fishing may not be a great idea.

· Secondly, bottom fishing must be done into strength and not into weakness. For example, you can accumulate Kotak Bank or HDFC Bank on dips but buying Yes Bank and IndusInd Bank just because their prices have fallen does not make sense.

· Lastly, make your bottom fishing choices based on valuations and future earnings growth. In other words, look for stocks that really offer that margin of safety to investors.

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