'Investors should be cautious'

“Markets can be volatile in short term as the rally is driven by foreign institutional investors and hence investors should be cautious,” said Nirmal Jain, chairman, India Infoline.

“Markets can be volatile in short term as the rally is driven by foreign institutional investors and hence investors should be cautious,” said Nirmal Jain, chairman, India Infoline.

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“But since the underlying fundamentals are sound, long-term investors have nothing to worry.”

FIIs have pumped in a total of Rs 63,961 crore since January 2010, and Rs 4,579 in September alone.

“I do not see a sharp fall, and any correction should be seen as an opportunity to invest,” said Aseem Dhru, CEO, HDFC Securities.

As far as short-term traders and speculators are concerned, go large. According to experts, growth lies in large and fundamentally strong stocks today.

“We are getting into a period where if it falls the impact would be harder on small and mid-sized companies,” said Ajay Bagga, head of private wealth management at Deutsche Bank. “Hence, one should invest in large stocks and diversified mutual funds.”

Over the past 12 months, the Sensex has risen by 18.5 per cent, the highest among major world markets, so short-term investors whose investment objectives have been met, can “book profits”, that is sell a part of their portfolio.