Over the course of a freewheeling discussion on equities and other financial instruments like Cryptocurrencies, real estate and gold, we asked them to give us some key takeaways for investors.
Some of their key tips are given below
"When it comes to equity always think of yourself as a partner, as a shareholder in the company."
Shreyash Devalkar
Sr. Fund Manager, Axis Mutual Fund
"As Indians we invest about 20% of our capital in equity. This will eventually go up to the global standard of 40-50 %. The culture of investing in equity in India is young and digitally enabled."
Chintan Haria
Head–Product Development & Strategy, ICICI Asset Management Company Limited
"Ignore the noise around in terms of elections, GDP, liquidity or interest rates. These even out over a period of 5 to 10 years. Focus on the Company.
Buy leadership companies, look at size of the business opportunity, earnings acceleration and quality of management. Yes, look at valuations but only at the last because you may miss the winners if you start with the valuation."
Charandeep Singh
Co-Founder & Fund Manager, Girik Capital
"Focusing on the company will give you the Alpha return. Equities WILL GIVE returns in the long run because 50 crore Indians are going to consume goods and services, translating into companies making profits."
Chintan Haria
Head–Product Development & Strategy, ICICI Asset Management Company Limited
"As a country we are clean, the banking system is clean. The old and new (IT) economies have both picked up. Indian entrepreneurs have access to money through VCs and PE funds. They are staying back rather than foraying abroad / working for international companies."
Varun Daga
Co-Founder & Fund Manager, Girik Capital
But they did say 'Watch Out For These!'
"Risk of disruption in whichever investment you have made. Because today everything is expensive, even so-called cheap stocks."
Shreyash Devalkar
Sr. Fund Manager, Axis Mutual Fund
"Huge dispersion in equity returns. Even between the benchmarks there is huge dispersion. Our biggest worry is that we are not in the right stock."
Varun Daga
Co-Founder & Fund Manager, Girik Capital
"Stick to an investment process. No deviations. From the way you shortlist stocks to the way you allocate them. Increase the speed and reduce time before they become investment targets for you. Valuation is just one of the processes."
Charandeep Singh
Co-Founder & Fund Manager, Girik Capital
"Earnings growth not up to expectations. Any disruption in GDP growth which affects the entire economy or GDP not translating into earnings growth. For e.g., interest rates going up and liquidity getting sucked out."
Chintan Haria
Head–Product Development & Strategy, ICICI Asset Management Company Limited
“We see that currently the economy is doing well because of the support given due to liquidity. All this was enabled due to interest rates remaining low. If this turns, you may find all of this triggering a reversal on the equity markets.”
CHINTAN HARIA
Head–Product Development & Strategy,
ICICI Asset Management Company Limited
Timing vs Time in the Market
In summary, this is what happened to SENSEX Returns
Over the past 30 years!
-
57 days out of 7456 trading days – Sensex went up by more than 5%
-
41 days out of 7456 trading days – Sensex went up between 4% to 5%
-
123 days out of 7456 trading days – Sensex went up by more than 3% to 4%
It is indeed impossible to anticipate or predict such isolated events and invest accordingly.
“Over the past 30 years, The BEST investor returns days (>3%) constituted 221 days out of 7456 trading days i.e. <3% of the time. And the punters are trying to ‘time’ this small window of opportunity?”
MIMI PARTHA SARATHY
Managing Director,
Sinhasi Consultants Pvt. Ltd.
TIME
in the Market
- Over the past 30 years, the SENSEX performance is 58.7x times or14.22% XIRR!
- Timing of both up and down, is close to impossible. There is absolutely nothing certain about it.
- The best solution for financial success is to remain disciplined and continue your investments as per your financial plan and asset allocation.
TIMING
the Markets
- What if you missed these 57 days? Remove the 57 best performing days, the SENSEX performance for the same period will be just 1.36 times or 0.51% XIRR only.
- Timing of both up and down, is close to impossible. There is absolutely nothing certain about it.
- Trying to ‘TIME’ the market may cause huge losses and loss of investment opportunity.
So, do you really think you can time the market?
Conclusion
Please remember investing is mostly backing quality businesses run by quality managements that offer a runway for strong cash flow growth, earnings potential, and long-term prospects. Buying them at a “reasonable” price with an eye on the returns is important. Stay invested, stay disciplined and secure your returns.
Most good advisors prepare a sound long term holistic financial plan for you based on your risk profile, define your financial goals along with you… do an asset allocation (with contingency plans built in) with you. They are in the best objective position to help you navigate the markets.
Reach out to us
To understand how we can help you maximize your investment goals or leave a comment below on your thoughts.
