The Mid Cap Honey moon, now!

The market was hammered to every body’s surprise in May-06, lead to a little participation from the small investor in the mid caps. That time most of the investors lost thousands of crores in sugar stocks and later in reality sector stocks, the night mare still hangs in the minds. The markets beyond expectations bounced back made most were surprised to invest. These situations lead the HNI’s queue to invest in stocks becoming long day after day. In the mean time the MF’s came with different NFO’s one after the other.
Recently the Regulatory authorities came with restrictions that no MF can park more than 10% of their assets in Short term deposits, where as it was nearly 30 % at one point.The Fund managers started identifying better places to park their money and on the other hand they were convinced that the front line and large caps are reasonably highly priced and even became risky. So the best option left is the Mid Caps which are lagging the rally for quite some time became the source to depend.
Now they are sending the feelers that the Mid caps are the best bets at this point in time. No doubt that there some Mid caps are still under valued but not all, great potential left to outperform the market. Invest in the highly liquid stocks in the emerging sectors as we have discussed in the earlier posts.