Markets hit new peaks in the last year and Samvat 2014, maybe a year of steady gains. The optimism largely comes from the huge amount of money flowing into mutual funds, which has helped sustain the markets at such high levels.
However, one thing that is worth mentioning is that though the markets have hit a new peak of 32,600 points, this hardly reflects the market conditions. The huge rally in the Sensex has largely been on the back of Reliance Industries, which has rallied 70 per cent, since the beginning of the year.
Some heavyweight stocks like State Bank of India, ITC, ICICI Bank, Infosys, Sun Pharma are way below their 52 week highs. This shows that the markets have run-up largely on the back of the huge rally in Reliance Industries, which has a large weightage in the index.
In any case, if you are now looking at returns, you may have to consider the beaten down names to make money. Small cap and midcap stocks have also rallied a great deal and one will have to search for pockets of cheap valuations.
All in all, do not expect huge returns this Samvat as markets have rallied a great deal. It will not be a surprise, if markets give single digit returns in the next one year.