Invest with a 2-3 year horizon.

Sensex below 14k - So what are your senses telling you?? How many of you are ready to throw caution to the wind and get rid of your portfolios and invest the proceeds elsewhere, in safer options like bonds?

Well, if it's any consolation, then let me remind you that markets were at 15k in August 2007 - from there onwards, the markets began a climb which enabled them to touch a peak of 21k in January 2008 and from there onwards, the journey has all been downhill - at a rapid pace! FIIs have clearly pressed the apnic button and have so far withdrawn over $6.3 billion in the first 6 months of 2008 - compare this with the $17 billion odd figure that they invested in Indian equities last year (data available with SEBI).

So what can you, as a retail investor, expect in the months to come? It's my personal opinion that somee sense has returned to the market - after the run-up witnessed last year, we have seen a meltdown in the lofty valuation the Sensex was commanding in January 2008! Equities look muuch cheaper and attractive now - you just need to take a look at the real equity / infrastructure stocks and the banking / financial services stocks to see what I mean. The huge sellign in these secotrs has left many a stock trading below their IPO issue prices - prime examples would be DLF and Motilal Oswal. Both stocks are trading at a significant discount to their respective IPO prices and a deeper look at the fundamentals of the two companies will convince you of the long-term potential that these companies hold.

As an investor, your best bet would be to ride out the market tide - it's the ideal time to build your portfolio with a 2-3 year investment horizon. be very stock specific and diversify your holdings across 8-10 stocks from different industries / sectors. I am hoping to tap into the knowledge reservoirs of some of my seniors and then maybe next week, I can give you a detailed brief on how I expect the various sectors to perform in the coming 3 years.

By the way, stay tuned in to this space - I got a major announcement coming your way in the first week of July. And for those who do not follow this space - well, do not accuse me of not informing you of these developments later on.