Where to invest Rs 10 lakhs this Dussehra? Nilesh Shah answers

Historically, Dussehra is celebrated as the time when Lord Ram killed Ravana, rescued Sita, and consequently, restored law and order in the world. With the Sensex crossing the magical 60,000 threshold and Nifty soaring beyond 18,000, the market is at fresh record high, seemingly slaying any slump or bearish run. 

Dussehra is a good time to clean up your portfolios, weed out what is not working, and bring in the investments that are right for your financial goals. But high market levels don’t offer much solace to those who have been sitting on the fence. At 60,000, the S&P BSE Sensex looks expensive to many. 

Presenting a special series where Moneycontrol asked three market experts  - Radhika Gupta, Nilesh Shah and Swarup Mohanty - a simple question: where to invest Rs 10 lakh right now? Here’s what Nilesh Shah, MD of Kotak Mahindra Asset Management Co has to say:

Also Read: Where to invest Rs 10 lakhs this Dussehra? Swarup Mohanty answers

Where to invest Rs 10 lakhs this Dussehra? Radhika Gupta answers

Nilesh Shah feels that due to the consistently rising markets, investors must diversify across asset classes. “As a sum game, I am not overly optimistic or overweight about equities and offshore assets, but relatively more positive about gold and more so about real estate at the moment. When it comes to fixed income securities, I am currently marginally under optimistic.”

Even within equities, Shah has a divided opinion on the large, mid and small-cap sectors, where he feels marginally more confident about large-cap companies as compared small and mid-cap companies, which, he feels, are shortly nearing a correction phase. 

Commenting on the patience needed to wait out these corrections from the perspective of long-term wealth creation, he says, “One needs to remember that making money in the markets is not just about wisdom, but equally about guts - guts to stomach volatility and potential losses. You can’t pray that the market will only go up. The markets will be down, undergo correction and you will have to bear with that.”

It’s best to diversify across equities, fixed income, gold, and international equities. 

On Gold and Real estate

Gold ETFs and Sovereign Gold Bonds (SGBs), and particularly the latter, top his list when it comes to his preference for the yellow metal. But one thing is certain - investments in digital gold over physical gold are preferable at any given point in time.

When it comes to real estate, Shah is extremely bullish on rent yielding and residential/leased property as compared to investing in under-construction real estate, given that the pent-up demand for housing post the pandemic is steadily catching up now, as substantiated by recent reports by Anarock research, which showed that housing sales are expected to witness a 30 percent Y-o-Y growth in major metropolitan cities of India.