MUMBAI: Within a period of some seven months, the Sensex has doubled from levels of 8,200 to about 16,400, taking a lot of investors by surprise. Many investors have missed the rally, waiting for an opportunity to invest and a correction that never came. Those who are invested are wondering whether it makes sense to take some profits off the table.

These are some questions in the minds of investors. Clearly, there is no single answer to these questions, since the needs and wants of every individual are different, but it makes sense to review portfolios and decide on the course ahead.

Equity markets have entered a consolidation phase and corrections should be used to invest in equities, since they will provide superior returns over the next two years, says Yogesh Kalwani, head — investment advisory. BNP Paribas Wealth Management. However, he expects investors to tone down return expectation to a moderate 15-20 %.

I think the market is under correction mode. This opportunity should be used to accumulate and build a solid portfolio for the long term, adds Motilal Oswal, chairman and managing director, Motilal Oswal Securities. Some of the sectors he likes are automobiles, infrastructure, banking and construction.

Financial planners always advise investors to stick to an asset allocation plan. On the basis of their age, risk profile, long-term financial goals and objectives, a financial planner decides how much money should go into equities and how much in debt. If you have any short-term goals, to meet it would be a good time to book profits in equities and use the cash so realised to meet those goals, says Zankhana Shah, a Mumbai-based financial planner.

For those starting afresh, it would be a good time to look at balanced funds is her advice. Gold, she feels, acts as a hedge against inflation and could continue to constitute about 5-10 % of an individual’s portfolio, despite the sharp run-up it has seen in the past year.

There are some who recommend a consistent strategy as far as equity investments are concerned. We always advise investors to invest in equities in a staggered manner and maintain profit triggers, like booking profits when they make 20% return , says Rajiv Bajaj, MD & CEO, Bajaj Capital.

The cash generated out of the profit so booked could be invested in debt instruments like fixed maturity plans on a very selective basis. In the short term, debt markets are expected to be volatile, and hence, he prefers liquid funds if one has cash requirements in the next 2-3 months.

Long-term equity investors should use such sharp rallies to clean up their portfolios and enter into fundamentally sound stocks, adds Manish Boricha, VP and business head, portfolio management services, Sharekhan.

To sum up, investors can still invest in equities with a long-term horizon of 2-3 years and in a staggered manner in fundamentally sound stocks.