Harshad Chetanwala of MyWealthGrowth advised investors to continue remaining invested in equities. "Those who have surplus can use the consolidation in the market due to current situation by adding gradually during every reasonable fall," he said in an interview with Moneycontrol's Sunil Shankar Matkar.
The co-founder of MyWealthGrowth feels it makes sense to be in export-oriented sectors at present as vaccination in developed and western countries is much easier due to their lower population.
Q: Will the second wave of COVID-19 hit corporate earnings in Q1FY22 and FY22?
There were positive signs of recovery up to a month ago and there is no denying that the second wave of COVID-19 across the country is much higher than the previous one. While this is a matter of concern and it looks like strict restriction on the movement of people may come up in few states where we have a higher number of cases.
So far, most of the state governments and central government are not in favour of complete lockdown like last year. But looking at the rapid surge of cases, some states may opt for strict lockdown instead of complete lockdown. However, they may allow industries to function and would not like to hamper the recovery. Some impact on corporate earnings will be there due to the current situation, but this will more likely delay and not derail the economic recovery.
Q: Given the rising COVID-19 risk in India, have you changed your investment strategy?
Our stand on investment strategy continues to be the same and has not changed. We were suggesting our investors go gradual during the last few months on their investment in equity and continue to hold the same view at present as well. Some volatility is expected due to the current situation and we are suggesting investor those who have an investible surplus right now or who were investing gradually to invest during such falls.
Q: Economy has started showing signs of improvement in CY21. But now, do you think the second wave of COVID-19 has hit the economic growth of the country?
The impact of the second wave is not expected to be as bad as last year. In our view, the government would not like to damage the livelihood of people and repeat what happened last year. Hence, they may allow industries to function with more restrictions. Even from a cost perspective, things are in control due to last year and the operations have been tuned to manage lockdown like situation where work from home can take care of activities in different industries.
Q: The Indian rupee started weakening again against the US dollar. Do you think one should start investing in export-related sectors?
It does make sense to be in export-oriented sectors at present as the vaccination in developed and western countries is much easier due to their lower population. With no major side effects of the vaccine noticed so far globally, this will help countries to recover faster and along with their recovery, the demand too is expected to get back on track.
Q: After a 70 percent rally in FY21, what is your outlook on markets for FY22?
Markets were expected to do well after looking at the kind of recovery we saw in the last quarter. But the second wave can delay that recovery. However, as shared earlier, the impact of this second wave is not expected to be as bad as last year. The market may remain volatile for some time, but we may not see major market correction until things go absolutely out of control, which may not be the case.
Q: Considering the current environment, should one stick to equity for investment or look at other asset classes?
In our view, investors should continue to remain invested in equities at present. Those who have a surplus can use the consolidation in the market by adding gradually during every reasonable fall. Many investors who would have invested in last year when the market was correcting should also continue to hold their investments as well. One of the major differences between last time and present is that this time, we know how to take care of the crisis right from health care to operating businesses which was unknown last year.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.