Retail investors needn't be too greedy

Times, indeed, are good
Analysts believe India is in the middle of a structural bull run and the country's economic situation is gradually improving. Many believe Indian equities will gain up to 20 per cent this calendar year.

Careful about mid-caps
Experts believe retail investors should stick to those companies that have high cash flows, a track record of strong earning growth and are managed to weather different business cycles. Be especially cautious when it comes to buying mid-cap stocks. Look for companies that have significant market share in their respective domains and have unique product offerings, and stay away from the firms where promoters have been in the news for the wrong reasons.

Stay away from real estate stocks, as many of the firms in this sector have high debt on their books, and huge inventory build-ups. Also, despite a reduction in interest rate, demand for home-buying is unlikely to pick up in a hurry, unless prices come down.

Be selective
With interest rates on their way down, investors can look at interest-rate-sensitive banking and automobile stocks.