Speaking to Moneycontrol on the sidelines of PMS Bazaar PMS-AIF summit in Mumbai on 18 October, Manish Jain, Portfolio Manager at Ambit Capital said that the time to invest in markets is now when GDP cycle is at the lowest point.
To support the conviction he has on markets, Jain gave reference to the study that Ambit published a while back on investing. If someone invests in a market in the last 20 years at a time when the nominal GDP growth rates were at the lowest point and stayed invested for 3 years – the returns which one could have made would have been 21 percent on a compounded basis.
Now, if we compare this when investors would have invested in the market at the peak of the GDP cycle – the returns are surprisingly low, around 6 percent, explains Jain.
There is inherent belief that the best stocks are picked in worst of times as long as there are no issues with respect to corporate governance, management quality, and the growth outlook from top down perspective continues to be exciting. It is actually the best time to invest in equities.
Additionally, the government is also cognizant about the revival of the economy but is also taking some concrete measures to do it which is a positive sign.
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