Amid the carnage and high volatility in the market due to coronavirus outbreak and its economic implications, many experts have a mixed view on what investors should be doing at this stage.
One such key voice, Nilesh Shah, Managing Director of Kotak Mahindra Asset Management advised investors to discipline their asset allocation vis-a-vis most challenging times. "One has to try to test him/herself into the market."
The economy is going to go through a challenging period and companies will go through challenging times. "But at the end of the day, three or six months of disturbance in the history of a company in many decades is a very small number," he said.
With the number of cases on the rise and many countries announcing a partial or a complete lockdown, stock markets have fallen quite a bit.
As a result, valuations have become more attractive now. Most fund managers would like to remain fully invested at these valuations rather than take a cash call, Shah said.
"If you remember 2008, most of successful fund managers remained fully invested. And those guys had really done well from the portfolio point of view. Of course, they did take short-term pain between September and October 2008 when markets corrected, but by March 2009 most of them were sitting on pretty positions."
"This is the time we have to keep eyes and ears open and create a portfolio which is suitable for coming uncertainty," he added.
The equity inflows (Rs 10,795 crore) and SIP (Rs 8,513 crore) remained strong in the month of February. Even MFs (Rs 55,595 crore buying) strongly supported equity market when there was large FII outflow (Rs 65,816 crore, the highest even in a single month) in March.
Nilesh Shah expects the equity inflow and SIP in March to remain similar to February.
"As far as the first three-week data of March is concerned, SIP inflow and equity inflows by and large linked and pace as in February, we should be nearer to 5 digit number in terms of flows, almost as good as February," he explained.
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