Book profits in mid and small-cap stocks

Analysts say that many are in the bubble zone and could correct sharply

Of late, investment advisor G Chokkalingam is finding it difficult to come up with fresh ideas for his client in mid- and small-cap space these days. He thinks that the mid- and small-cap stocks are in bubble territory as the valuations don’t justify the price.

“Historically, there would be certain sectors or themes that would trade at stretched valuations and they would lift the entire mid- and small-cap indices. This is the first time I am seeing overvaluations across the board,” says Chokkalingam. He now recommends clients to hold 50 per cent large-caps, 30 per cent smaller companies and the