Not the time to be a hero, stay cautious with your capital, advises Enam's Sridhar Sivaram

Another reason for the not so great Q1 numbers was that the government spending has been poor in Q3 and Q4, resulting in a slow down.

Veteran investor and Enam Holding’s Sridhar Sivaram has advised investors to protection the capital at this phase of the rebound, believing that this is not the time to be a hero in the share market.

In a conversation with Moneycontrol as a part of The Wealth Formula Podcast, Sivaram said investors should place a bet only when one genuinely finds the right opportunity.

“There are macro events which are playing out, like the tariffs and how that can have an impact on the Indian markets and Indian earnings. So, when you put all of this together, if you genuinely believe something is attractively priced and earnings will hold, deploy your capital. Otherwise, this is a phase where protecting capital is more important than chasing returns”, Sivaram said.

After nearly a six-month long period of correction, equity markets regained ground over the past few weeks, likely because India had underperformed and fallen a lot, said Sivaram. "…when you look at other markets within the emerging markets, India has actually underperformed during the beginning of the year. So, this could be a little bit of catch up where some money is getting redistributed between China and India," Sivaram added.

Watch the full video here: The Wealth Formula | Enam Holdings' Sridhar Sivaram On Navigating The Market

Foreign investors have also been making a comeback into Indian equities, adding to the momentum, however, it is very difficult to predict the short-term movement, Sivaram said.

"I would say, if it continues, it will be great for everybody. But it's a short-term movement, but it's a very steep, because you saw a correction for almost six months without a stop, and in three weeks, you've sort of gone back up so much," he added.

Sivaram said it is advisable for investors to miss six months of whatever returns the market has to offer, and instead protect their capital in this phase. "I have been in the market since 1994 and I have seen many of these in the past. You are better off being slightly cautious at this stage than being very aggressive," explained the veteran investor.

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