Don’t think 20-30% return is a birthright; time to go long on gold and neutral weight on equity: Nilesh Shah
Nilesh Shah, MD, Kotak AMC, says investors can’t go to Russia because of Ukraine; to China because of Taiwan; to South Africa because of social strife, or to Brazil because of the communist government. In the emerging market, there are very limited choices and India is one bright option. So with Triveni Sangam of flows, fundamentals, and sentiment, the downside is limited but expect volatility over the next 3, 6, 9, and 12 months.
Shah also says this is the time when you should be long duration because rates are going to be cut. You should be long gold because central banks are buying gold. And you should be neutral weight to equity with some bias towards large caps.
Sensex and Nifty are once again hitting record highs every day, even when there are worries about not-so-great Q1 earnings. Where do you think we are headed?
Nilesh Shah: If we take a 5-year, 10-year view, no doubt the only direction is up. The economy will do well and markets will do well. If you are taking a 3, 6, 9, or 12-month view, I have no idea where we are headed. On one side, we believe the correction in the market will be shallow and short-term because there is Triveni Sangam of fundamentals, flows, and sentiment.
Despite the subdued Q1 results, the market still believes that we are on course to achieve low double-digit earnings growth for this year and next. If that happens, the downside of the market is limited. The liquidity is very strong. Domestic investors are participating and we think global investors also will participate. More
