The market has been nothing short of volatile or unpredictable from last Diwali back in October 2019, but SAMVAT 2076 has taught investors crucial lessons to investors, Hiren Ved, Director & Chief Investment Officer at Alchemy Capital decodes the learning in D-Street Talk podcast with Moneycontrol.
Fall in the active cases, as well as news of vaccine along with green shoots visible in the economy along with stable Q2 results, helped equity market touch fresh record highs in the run-up to Diwali.
We are in the age of new normal:
The new normal that we see is that markets have very large significant swings. And sometimes these swings make one sit and wonder, about the stocks and companies that you've invested in.
“We are seeing that the governments tend to infuse larger and larger amounts of liquidity, which causes these extreme risk-off risk on movements in the market. To some extent, this is a new normal that we've seen,” says Ved.
There is an old adage that people say that there is always some mean reversion that happens in the markets. We have seen suddenly where there is a consensus and there is over-optimism and over participation, that's where the delta is the biggest.
“Nobody wanted to invest in – and everybody was underweight in the pharma sector until the crisis happened, and then everybody was running to kind of increase their weight in pharma,” explains Ved.
Don’t get greedy or fearful:
In the longer run, it's going to be very difficult for us to anticipate every crisis. “The way we invest and the way we build our portfolios, I think there needs to be a certain balance where we don't get too greedy when something is doing very well. And, neither do we ignore stuff that is not doing well,” he said.
If we maintain an ideal balance between greed and fear is the ideal way to invest, highlights Ved. “Creating the right balance between risk and opportunity is so very crucial to succeed and survive in the capital markets and make money from it,” he added.
(Tune in to the podcast for more)Disclaimer
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