- Viraj Gandhi, CEO of Samco Mutual Fund, shares his insights on the current market volatility amid the ongoing elections and suggests investment strategies.
- He anticipates the market to remain jittery and reactive to news until the conclusion of the elections.
- Gandhi suggests focusing on sectors like manufacturing, infrastructure, and emerging technologies for investment opportunities.
Samco Mutual Fund CEO Viraj Gandhi discusses market volatility amid elections, suggesting investment strategies and sectors to focus on for potential growth.
Market Volatility Amid Elections
Indian stock indices have experienced turbulence due to factors such as significant selling by FIIs in emerging market equities and speculation surrounding the upcoming elections. Gandhi anticipates that the markets will remain jittery and highly reactive to news until the conclusion of the elections, advising investors to exercise caution and make informed decisions during this period.
Market Valuations and Risk-Reward
Market momentum has been robust and valuations have outpaced earnings significantly. With the anticipated rate cut by the Fed being postponed, earnings growth may not meet expectations, especially with high interest rates. Gandhi suggests pausing and seeking value opportunities with a strong margin of safety.
Investment Strategy Amid Elections
Gandhi recommends focusing on sectors like manufacturing, infrastructure, and emerging technologies that align with the government’s focus to boost India’s GDP. He also suggests considering companies with significant export exposure.
Factors Leading to Market Correction
Any deviation from the projected poll results or seat count could dampen market breadth, particularly in volatile times. Gandhi warns that while benchmark indices may rise on certain days, divergent volumes and open interest indicate potential cracks in the strength of the rally.
Gold Investment and Sectors to Avoid
While gold has shown strong performance, Gandhi advises caution when entering aggressively at these elevated levels. He also recommends avoiding sectors like IT and financial services for now due to various challenges they face.
Mid and Small-Cap Stocks
Opportunities remain in the mid and small-cap sectors with potential for growth. Gandhi emphasizes the importance of choosing the right companies and suggests a flexicap approach for effective portfolio balance.
Advice for New Investors
New investors should conduct thorough due diligence and practice effective risk management before making any investment decisions. Gandhi warns that rushed or speculative investment choices could have severe consequences.
Conclusion
Amid the ongoing elections and market volatility, investors are advised to exercise caution and make informed decisions. Focusing on sectors like manufacturing, infrastructure, and emerging technologies could offer potential growth opportunities. However, any deviation from the projected poll results could lead to market correction. Therefore, thorough due diligence and effective risk management are crucial for successful investing.
