Veteran investor Manish Chokhani has warned investors against too much concentration in smallcap stocks, instead asking them to balance the portfolio.
Manish Chokhani said given the massive upcycle that has been underway in equities, most stocks will do well. He adviced investors to stay away from any FOMO building up and not get greedy.
He believes that as much as 90% of India's wealth creation lies ahead of us over the next two decades, and investors need to get more measured, and approach markets more like a marathon than a sprint. "Just be a bit relaxed, country's future is bright, potential for growth is high," he said.
"Keep tilting your portfolio, so that asset allocation is balanced," said Manish Chokhani, adding that too much concentration in the smallcap space is not good as these can go through severe phases of correction, going down as much as 60-80% when 'unanticipated, sharp falls happen'.
Manish Chokhani said that the domestic inflow into equity markets have only so far only lifted stocks from the small and midcap space, and are yet to move the largecap names. If this kind of momentum in the markets continues, Chokhani said eventually the foreign investors too will join the India equity rush.
Read More: Manish Chokhani said investors should avoid too much concentration in smallcaps
"That is the risk with some of these SMID names, and what has been going on there is a bigger worry than the F&O space. A Rs 12 crore SME issue attracting Rs 3,000 crore worth of bids are the things you should be worried about," Chokhani added.
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