The way things have panned out in the last few sessions, mid-caps are emerging as stocks that have shown strength in a volatile market. As the recovery kicks in, the chances are we will see market breadth staying positive and mid-caps gaining. But with valuations still on the higher side, there are risks – including those that are global in nature. So, checks and balances are a must before investing your hard-earned money. These should be both quantitative and qualitative. Check whether the industry in which the company is operating is set to grow faster – and what is driving demand. Whether managements were able to drive growth without taking on much debt. Just a bit of homework to ensure that returns are in line with the risk one takes when investing in equities as an asset class.
