'Much Bigger Game' Unravelling In Indian Stocks For Long-Term Play, Says Raamdeo Agrawal

As market participants gear up for another auspicious year in the Indian stock market with various 'investment picks for Samvat 2081', market veteran Raamdeo Agrawal advises investors to focus on the long term, as it is "almost unpredictable" in the short run.

Wealth creation is a journey and a long-term game, the chairman and co-founder of Motilal Oswal Group told NDTV Profit in a televised interview on Tuesday. "And you sometimes become very lucky," he said.

Investors who are making money now had some base at the time of Covid-19, Agrawal said. "People lucky to be allocated in the market in February and March of 2020 only made maximum money as markets moved very rapidly in the next year."

In equity investing, only the long term is what matters and is predictable, as "you don't know what is going to be the next 12-month return," he said. "It could be a minus 15% or a positive 25% return. As the tenure becomes shorter, it is almost unpredictable."

Investors have to commit for at least five years, and "the longer the better," he said. "That's how wealth has been created."

Investors' savings in the last 25 years sum up to $1–12 trillion and will jump to about $120–125 trillion in the next 25 years even if the savings rate remains unchanged, the market veteran said. "This (investing) is going to be a much bigger game."

For the first time, retail investors are entering the markets and experiencing a "true equity evolution," as they will continue to invest even during a correction, according to Agrawal. "It is going to make the market resilient, and the game will become bigger."

In this scenario, the people who make money are the investors who "will take the downside or a flat market on their stride and hold for the next upward march," he said. "I would suggest staying invested till you make money, and this market will make money for you."

A bull run cannot be in all segments of the market, as only a few have tailwinds, he said. "If you can pick up stocks in the beginning of the tailwind, that is the best way."