In the current scenario, with domestic equity markets reaching unprecedented highs, Nilesh Shah, Managing Director and CEO of Kotak Mahindra AMC, has expressed optimism about market conditions. Speaking at the BT500 Wealth Creators Summit in Mumbai, Shah noted that worries related to elections and monsoons are now under control. Moreover, there has been better-than-expected growth and the previous concerns about foreign institutional investors (FIIs) selling have been replaced by increased buying activity from domestic investors.
Of late, the benchmark equity index BSE Sensex scaled its lifetime high of 70,057.83 on December 11, 2023. On the other hand, NSE Nifty index hit its all-time high of 21,037.90 on December 12, 2023.
When asked about strategies for navigating the current bull market, Shah advised investors to prioritise saving before spending from their income. He emphasised on the importance of consistent, regular investments to achieve financial goals. Shah suggested adopting a long-term perspective, comparing investing to a Test match rather than a T20 match, underscoring the significance of discipline in investment practices.
Additionally, he cautions against concentrating investments in one place and encourages diversification. Shah also stresses the value of investing in companies and management that give importance and respect to minority shareholders.
On a year-to-date basis, the 30-share index Sensex has gained 14 per cent till date. The BSE Midcap and BSE Smallcap indices have rallied 42 per cent and 44 per cent, respectively, so far in 2023. Meanwhile, foreign institutional investors (FIIs) have poured Rs 1.36 lakh crore into the domestic equity market. Domestic institutional investors have bought shares worth Rs 1.75 lakh crore during the same period.
How to pick quality stocks? Vijay Kedia, Managing Director, Kedia Securities added that investors should look for companies with honest and ambitious management with regular cash flow and low leverage.
“There are some pockets in the market where you may find value. It may be difficult for retail investors to spot those stocks. Promoters usually don’t look at bull or bear markets while expanding or making decisions for their business. They make their decisions while looking at the conditions of the economy. That’s why I also don't invest while looking at the market,” Kedia said adding one should invest for the long-term for wealth creation.
Vijay Chandok, MD and CEO, ICICI Securities added that investors' behaviour has massively changed in the last 24 months. Investors are now also coming from smaller towns.
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