Samvat 2080 has been an eventful year, marked by significant rallies and milestones. The Sensex surged by 23.2%, crossing several key levels, while the Nifty rallied 25.3%, reaching multiple records.
However, recent market activity has shown a shift; both the Sensex and Nifty have fallen nearly 8% from their record highs this month, underscoring a new wave of market uncertainty. India’s volatility index, or VIX, also surged by nearly 40% over the year, reflecting a fluctuating sentiment among investors.
Major events on national and international fronts contributed to this volatility. Prime Minister Narendra Modi secured a historic third term, which added to investor optimism. Meanwhile, tensions in the Middle East heightened global volatility, making Samvat 2080 a period of both opportunity and caution for investors.
Here is what market experts had to say on how to invest in the near term and long term:
Sectors To Watch And Near-Term Strategies
The recent slowdown in India's growth, which is hurting the stock market, is plainly on the lack of government spending and a revival is important in the upcoming Samvat, according to Morgan Stanley's Ridham Desai.
Frothy valuations of small caps and mid caps, as well as bunching up of IPOs, which are taking some appetite of secondary markets away, are some of the other factors contributing to the correction, Desai told NDTV Profit in an interaction.
We are not at the end of bull market, but its a typical bull market correction which will take weak ends off the market, which will emerge much stronger after this.Ridham Desai, managing director and chief equity strategist India at Morgan Stanley
Desai recommends large private banks, consumer luxury, and IT services as key sectors for near-term gains. With a supportive regulatory environment, large private banks are expected to perform well in Samvat 2081, while consumer luxury could see a resurgence, partly driven by rural recovery. Desai also maintains a positive outlook on IT services, citing potential growth from AI advancements.
He cautions, however, against sectors with heightened competition, such as quick commerce and global materials.
Simplified Portfolio Strategy
Enam Holdings' Director Manish Chokhani, on the other hand, advocates a simplified approach to investing.
"People only need two index funds in their portfolio, one Nifty fund and one small or mid-cap fund and one fixed income fund and that is good enough," Chokani told NDTV Profit in an interview.
Chokhani’s investment philosophy focuses on long-term growth, with a preference for stable asset allocation. For younger investors, he suggests maintaining a 70% allocation in equities and 30% in fixed income to ensure resilience during market drawdowns.
He warns against speculative trading, suggesting that investors avoid frequent stock picking unless they are committed full-time.
The Long-Term Game
Motilal Oswal's Raamdeo Agrawal encourages investors to adopt a long-term perspective, describing wealth creation as a journey that demands patience. He believes that markets are unpredictable in the short run, while the long-term outlook offers more predictability and potential for wealth accumulation.
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."
Agrawal notes that the growing participation of retail investors will strengthen market resilience as they are more likely to hold through corrections.
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