As some macro headwinds are expected to return this year to the markets, Nilesh Shah of Kotak MF while talking to ET Now advised investors to enter the markets via SIP route and that too for a long term. Even though equity markets have priced in that the RBI is serious about fighting inflation, nervousness still remains in the markets which the central bank needs to address very soon, said Nilesh Shah. Not too upbeat on the prospects of the liquidity situation at present, Nilesh Shah said the scenario is not very accommodative. On being asked about the rising crude prices affecting chances of the economy, he expected crude to range between $60-70 bbl this year which is negative for India. He is also termed the rise of about 100 bps in bond yields recently as a negative sign for the economy.
Midcaps and smallcap stocks have had an excellent run at the bourses so far, with the indices touching lifetime levels of late. Notably, the BSE smallcap index has rallied by more than 47% in last year, while the BSE midcap index was up by more than 37% in the same period. In comparison, the Sensex returned more than 22% last year. Cautioning investors about the volatility in store in the midcap-segment, Nilesh Shah while talking to CNBC-TV 18 last month said, “Midcaps will be highly volatile due to market movement or industry movement.” Sharing his market outlook for the coming year Nilesh Shah said, “ Not very single disrupting company will generate wealth. Disrupted versus disruptive is the theme for 2018.” When asked about his views on the popular cryptocurrency Bitcoin, he had said instead of entering into the Bitcoin trade at the current levels, it’s better to create Indicoins.
In December last year, Mahesh Patil of Aditya Birla Birla Sun Life MF had advised investors to hold on to winner stocks. He explained that investors may be better off by holding on to these stocks even beyond their target price. “There is always a temptation to really book profits in stocks once they reach a target price but as long as the compounding continues and as long as the companies continue to deliver, the compounding continues over a longer term as that will really create an immense amount of value.” Many top fund managers and market experts alike have voiced a preference to invest in largecap stocks going forward. We explore two key reasons why managers are telling investors to move large caps.