Did not sell a single share on Tuesday; buy on dip strategy should work: Quant's Sandeep Tandon

Their cautious approach, Sandeep Tandon explained, involved shifting focus from high beta to more stable large-cap stocks and increasing cash in the portfolio.

Wild swings in the market over the last couple of sessions notwithstanding, nothing is likely to change much from a policy perspective, according to Sandeep Tandon, CIO, Quant Mutual Fund.

On Wednesday, the Nifty and Sensex jumped over 3 percent each, recouping half the losses suffered on June 4 following the weaker-than-expected mandate for the NDA coalition.

"Maybe closer to the budget, as we see the policy announcements coming, I think market will start settling down,” Tandon said in an interaction with Moneycontrol.

Also read: The final tally: Stocks that gained the most in the election rally

“I always believe whether there is any event-related trigger, market does sector rotation, that's the way we always try to re balance our portfolio," he said.

With the coalition government in place, Tandon feels there should not be any concerns over policy continuity.

"I have been saying for a while, India is buy on dip strategy. From a post COVID scenario till today, we have seen multiple times that the market has corrected 12 to 20 percent. There is a very steep fall and everybody gives up. And the again market comes back to highs," he said.

On navigating the uncertainty surrounding the elections over the last few days, Tandon said that it was an event risk that they had been preparing for over the last several months.

Their cautious approach, he explained, involved shifting focus from high beta to more stable large-cap stocks and increasing cash in the portfolio.

"We pruned down our high beta portfolio, moving from small to large cap, and from illiquid to liquid stocks. We also reduced our positions in PSUs and metals," he said. This strategy, Tandon explained paid off, as they were able to absorb the shock. "We didn't sell a single share on Tuesday. We just took a wait-and-watch approach. We neither got excited when stocks rallied nor were we too paranoid when the market fell," he said.

Regarding market movements and investor sentiment, Sandeep was optimistic. "I was quite constructive on the market, seeing it as a great buying opportunity. Sometimes, when event risks play out and you manage them wisely, you realize the benefits later," he said.