The stock markets are on bull run. Is it the right time to invest in equities?

Submitted by Pramod on Wed, 04/08/2009 - 16:04

Financial Products and Services

Stock Markets are witnessing a bull run. Reality stocks are doing well. Buying in blue chip stocks has posted tremendous momentum.

Today, The Sensex has rallied significantly owing to sustained buying in several blue chip stocks from realty, consumer durables, FMCG, PSU, capital goods, Pharma, metal and oil sectors. IT, auto and power stocks too have also recorded sharp gains. Bank stocks have recovered a substantial portion of lost ground now.
So, is it the right time to invest in equities? What are the precautions one should observe?

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Arbitrageur
In share trading, Investors are called as risk arbitrageurs attempt to make profits from an anticipated rise in the price of a takeover target's shares and a drop in the price of the bidding company's shares. These traders at the same time buy stock in the target company while selling those of the bidding company. They will also invest in the target company if they think the bidder will be forced to raise his offer price.