However, weak domestic and global cues led to some profit-taking in the run-up to the Budget 2024 which increased volatility. However, experts believe that ‘dips’ can be used as a buying opportunity if someone has a long-term investment horizon.
As the financial markets venture into 2024, investors are faced with the dual prospects of market opportunities and heightened volatility.
Seasoned financial experts which ETMarkets spoke to provide valuable insights on how to safeguard your portfolio amid the dynamic economic landscape.
1. Quality Amidst Volatility: Nishit Master, Portfolio Manager, Axis Securities PMS
Nishit adopts a constructive outlook on Indian equity markets for the medium to long term. Acknowledging the likelihood of short-term volatility, he emphasizes the importance of investing in good-quality companies with a consistent track record of generating positive free cash flows. This strategic move aims to shield investors from the anticipated turbulence in the near future.
2. Comprehensive Portfolio Review: Mohit Ralhan, CEO, TIW Capital
Mohit advocates for a proactive approach by recommending investors to conduct a comprehensive review of their portfolios. Aligning the portfolio with individual risk tolerance and financial goals is crucial. Recognizing the success of equities and real estate in the past year, he highlights the necessity of rebalancing if allocations to these sectors surpass an investor’s risk tolerance threshold. A stock-specific approach during rebalancing ensures a resilient portfolio in the face of market fluctuations.
Mohit cautions against the allure of poor-quality companies in a buoyant market. Investors are advised to exit such positions and redirect investments toward businesses with promising fundamentals and reasonable valuations. Given the market’s current highs, a prudent approach involves making extra considerations during investment decisions.
For momentum-driven investors, having a well-defined exit strategy is paramount. Rather than relying on valuation methodologies, Mohit suggests implementing stop-loss mechanisms to protect profits. FOMO (Fear of Missing Out) is to be avoided, particularly as volatility is expected to rise in an election year for both India and the USA.
3. The Wisdom of Peter Lynch: Alok Agarwal, Head-Quant & Portfolio Manager, Alchemy Capital Management
Alok draws wisdom from famed investor Peter Lynch, emphasizing the futility of trying to time the market. Instead, he encourages investors to resist the temptation of market timing and remain focused on the journey of wealth creation. Sticking to planned asset allocations, regular portfolio reviews, and disciplined rebalancing are underscored as proven methods to navigate market fluctuations.
4. Strategic Allocation: Varun Saboo, Head – Equities, Anand Rathi Shares and Stock Brokers
Varun offers a strategic allocation perspective, recommending that 70-75% of the portfolio should be in large caps. The remaining portion can be allocated to small caps, with mid-caps reserved only for very high conviction holdings. This approach aims to strike a balance between stability and growth potential.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)