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    Own midcaps? Do a check & balance exercise to avoid decision of haste: 7 midcaps from different sectors with an upside potential of upto 49%

    Synopsis

    Every now and then the market goes through phases, where it prefers a certain set of stocks, not based on sector but based on the overall market cap. So, sometimes it is large caps, at other mid-caps. Now this partially happens, due to the flows which are coming to markets. For example, if more flows are coming to mid-cap or multicap schemes there is bound to be out performance in the mid-cap space. Now what it does is that it tends to create a sudden surge in mid-cap. Similarly when there is an outflow like the kind of one which we saw in March this year, midcap stocks tend to decline sharply. Essentially, it is the flows which impact the broader matrix of how midcaps behave. So there are phases not owning a midcap stocks appeared to sin and then there phase, where owning them appears to be sin. But if one focuses on the underlying business and some critical parameters, there is a possibility of getting rid of these phases of anxiety which keep coming to the street and create long term wealth.

    More than any other part of the markets, it was the mid caps stocks which felt the tremors of election results not being in line with the expectations of the street. The political news flow and speculation around it would settle down in another couple of days. What needs to be watched is how the flows to the midcap funds take shape in another couple of months. If there is similar kind of flows coming to fund houses, then it is very likely that
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    The Economic Times