With markets touching new highs, bet on quality and avoid penny stocks

In a bull market, many bad companies with dubious promoters and poor corporate governance standards also rally

The Sensex is up 131.5 per cent from its March 23, 2020, lows. The mid- and small-cap indices have registered even higher gains of 167.5 per cent and 232.5 per cent, respectively, over the same period. Meanwhile, new investors have entered equity markets in droves, as is apparent from the sharp rise in demat accounts (up around 23.7 million till the year ended September 30, 2021).      

“During the pandemic, many new retail investors, mostly millennials, jumped into stock markets as traders and investors in search of a new income stream,” says Vivek Bajaj, co-founder, StockEdge and Elearnmarkets.

But