Following a strategy that is different from the herd could sometimes help increase returns in a market trading at premium valuations.
With broader indices trading at premium valuations, it may be an opportune time to look at sectors and stocks which are currently unpopular but hold promise. These are also called contrarian bets, which mean stocks considered risky at the moment due to unfavourable circumstances.
It was the case a year earlier, when the IT sector was shunned due to demand concerns in key markets like the US and Europe, but it bounced back handsomely, rewarding investors who had bought IT stocks then.
Currently, 4 such sectors are there wherein the sentiments are negative. These sectors are – Cement, Realty, Sugar and Telecom.
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