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Amid heightened global uncertainty and volatile equity markets, Kotak Mahindra Asset Management Company Managing Director Nilesh Shah has advised investors to stay disciplined and adhere to asset allocation strategies, stressing that current market valuations are neither deeply attractive nor excessively stretched.
In an exclusive interview with ANI, Shah said market positioning should be guided by individual allocation rather than short-term sentiment. "My answer is simple. You follow your dharma of asset allocation. If you are overweight equity, this is time to sell because markets are not cheap. If you are underweight equity, this is time to buy because markets are fairly valued. And if you are equal weight equity, you don't have to do anything," he said. Highlighting the difficulty of predicting market direction, Shah underlined that investor behaviour matters more than market timing. "No one knows where the market will go. But what you can do in that market is in your control," he added. He emphasised diversification across asset classes and geographies as a core principle for long-term wealth creation. "Put some money in debt, some money in equity, some money in precious metals, some money in real estate, some money in India, some money outside of India also. That asset allocation should give you real return," Shah said, advocating a "diversify, diversify, diversify" approach. On valuations, Shah noted that perception varies depending on return expectations. "If you are expecting 30% return every year, then this market is very, very expensive... But if you are comfortable, let's say, 10% return, then this is a good market to invest," he explained. He further observed that domestic investors have remained resilient despite global volatility. "Domestic investors' concerns have gone up, but their flows have not been impacted. They have been true wall of support," he said, crediting systematic investment plans (SIPs) and mutual fund distributors for sustaining inflows. On foreign investors, Shah pointed to a mixed trend. "There is one set of investors which is willing to invest... in IPOs, private equity... But many of the active FPIs... are also taking out money. They see India does not have AI play... and valuations are looking expensive vis-a-vis peers," he said, adding that long-term confidence in India remains intact. Addressing broader market behaviour amid geopolitical tensions, Shah said equity markets react differently depending on economic exposure. "Markets will always react to the event. Sometimes, it is discounting an event. Sometimes, it is reacting after an event," he noted. He cautioned that oil prices remain a key risk factor for India. "If the oil prices remain in double digit, then worst is behind us. If oil prices go to... triple digit, then worst is not behind us," he said. Summing up his advice, Shah stressed that investors should focus on controllable factors rather than market noise. "Follow the dharma of asset allocation... that is what will give you real return," he said. (ANI)
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