August 1, 2011 8:30 am
is it a good time to start investing in infra stocks and funds or is it better to wait for more rbi hikes.the infra stocks are at 52 week lows.any idea which is the best infra stock to bet?
I would be wary of touching infra stocks/funds because
1. Infra stocks by its very nature is capital intensive which makes to vulnerable to rate hike and cash flow at times negative
2. Beyond that the sector prospect depends too much on govt policies like land acquisition, tender process, toll collection etc. In the long run the sector which does not depend on the govt policies and action will create long-term wealth for shareholders.
I would suggest you to stick with diversified mutual fund which will allocate its share of the fund in infra sectors when the good infra companies quote at attractive prices. Just keep it simple.
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