- I would also like to take this moment to present my current perspective on the equity markets.
- Currently, our approach is one of caution. We believe that a prudent strategy involves gradually staggering investments, the timing of which will total depend upon one's risk appetite & both short & long term goal. Data does prove that for very long term investors (15 years+) this timing is not necessary. The market valuations are reasonable, though the value segment has become relatively expensive. Mid and Small Caps are expensive. The recent earnings season has shown soft results, with only a handful of companies achieving exceptional performance due to various factors, including higher interest rates, persistent inflation, increased raw material expenses, and costly logistics. This situation could intensify further considering the elevating crude prices.
- While our commitment to holding onto exceptional funds for the long term remains steadfast, there's also merit in maintaining a cash reserve on our balance sheet and pursuing systematic investment. We hold the view that the broader index may not experience a significant decline, but market dynamics will involve rapid rotation among winners. This might result in the index staying relatively flat to negative, over the short term (9 months) while individual stocks will excel.
- It's also important to consider the potential impact of the 2024 general elections. A surprise outcome could lead to a notable correction, particularly affecting infrastructure and capital goods stocks. Technical indicators will provide signs of nervousness if any in the 4th quarter of FY24.
- The FED's persistent efforts to curb inflation and the ongoing Ukraine crisis has further led to the uncertainty in the equity markets.
- For a moderate risk taker , Our current suggestion is to allocate 50% of capital to PMS managers, we currently track 40 fund and have a few shortlisted. The remaining 50% can be distributed between a 60% equity and 40% debt combination, and follow a staggered investment approach.
- We propose committing fully only after assessing the outcomes of the May 2024 results and observing any potential easing of interest rates by the FED/RBI. #investing #growthfinitiefficientfrontier
