Investing can be tricky and unpredictable, especially now with many worldwide and local issues. It’s more important than ever to have a balanced mix of investments. Top fund managers share their advice to help investors navigate these uncertain times.
Market Ups and Downs Are Here to Stay
Aman Chowhan, a fund manager at Abakkus Asset Manager LLP, says investors should prepare for ongoing market ups and downs. In the past, global markets were the main concern, but now India is also facing challenges. Markets don’t like uncertainty, which makes investor confidence low. While we might not experience a big drop of 30-40%, a small dip of about 5-10% could happen before things get better.
Finding the Right Balance Between Large and Mid Caps
When creating a portfolio, how much risk you’re willing to take and how long you plan to invest are important questions. Aman suggests a balanced approach. If you plan to invest for 3-4 years, try to put half your money in large-cap stocks (which are more stable) and half in mid-cap stocks (which can grow faster). Mid-caps represent a big piece of India’s growth potential. By including both, investors can aim for better returns.
Sector Picks: Where to Invest
Aman advises looking at the banking sector, which has not performed well recently. This means it has less chance of falling much further. The IT and Pharma sectors also look promising due to market trends. Although the Nifty index might not drop suddenly, some individual stocks could see a 5-10% dip before leveling out.
Role of Asset Allocation in Risk Management
Pradeep Gupta, from Anand Rathi Group, highlights the importance of spreading your money across different types of investments. Instead of investing everything in stocks, having a mix can help protect your capital while still generating returns. A well-diversified portfolio balances risks and rewards effectively.
Focusing on Large Caps in Uncertain Times
Nitin Aggarwal from Client Associates suggests that investors should favor high-quality large-cap stocks. These stocks provide better protection for your money while still showing decent growth potential. It’s important to choose large companies that are fairly priced and offer steady growth over time.
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