It’s a bloodbath globally and the investors are no doubt worried about the right strategy at the moment. Noted market expert Vijay Kedia expects markets to remain volatile for a few months but says investors must use the dip to buy quality stocks. However, he warned investors that one should moderate expectations, returns seen in last 3-4 years are unlikely.
He explained that, “Nobody can say what will happen next but it appears that next 2 to 3 months would be very volatile for the entire world. Since US markets have also started falling so there will be volatility in the Indian markets too for the next two months. Things should settle down from June onwards.”
What’s the right investment approach now?
Addressing the all round fear, Kedia says the right strategy now would be to buy quality stocks on dips. He explained, “When markets fall the price of good shares also fall so it creates an opportunity to buy good share . Market has already fallen 15% from its peak and there are many stocks which have fallen 30%, 40% even 50%.”
He however cautioned investors that this is not a market where one cam make quick money, “In this downward trend even good shares fall but do not expect to make quick money in this market. In 2-3 months, he markets are expected to stabilze and you will get good opportunity for investments but going forward do not expect the kind of returns that you were accustomed to getting in last 3 to 4 years. You will get moderate returns.”
Vijay Kedia’s big bets are…
The important question now what are the key stocks or sector to focus on given the market volatility? Kedia says, “domestic sectors like tourism, which are shielded from the impact of Trump tariffs are perhaps better. We can also look at aviation, hospitality sectors, which are connected with tourism. Then there is infrastructure sector, that should also do relatively well as they are not affected by competition from China or the US tariffs.”
He is also positive on the “power sector and companies providing financing to this sector.” He expects them to do well, “considering Government’s push on infrastructure. PSU banks are also available at lower prices.. I see opportunity for value creation in them.”
He advises investors to avoid sectors that have uncertaintyassociated with them at the moment, This includes, “the automobile sector as there is no clarity in government policy moving forward. Then in IT one has to be very selective,lot of things are going to change because of AI. It is very important to ascertain the beneficial and detrimental effects of AI on different companies.”
Vijay Kedia says large caps safer for new investors
Though the overall advise is to look for quality bets, Kedia says it is safer for new investors to stay with large cap bets at the moment, given the market volatility. He explained that, “When we talk of midcaps, it contitutes 5000-6000 companies and the new investors, particularly those who came in the last 2 years, do not have the skills to evaluate judiciously on which companies to invest out of these 6000 companies. My advise to them is not to be adventurous, large caps would be safer for them. They are not seasoned enough so large caps are better investment for them.”
Vijay Kedia says may see FII buying after June
Kedia, speaking on the FII selling, seen across Indian markets, said that India is better placed compared to other countries in terms of the tariff pain and this may augur well in the longer run in terms of allocation, “FIIs are unlikely to start allocating money to India immediately, however I expect them to complete their selling in the next 2 months and by June they should be in a position to allocate funds for Indian markets. I cannot say with certainty but there is a fair chance of fund allocation once market stabilizes.”