While many investors maybe worried about the heightened volatility in the stock markets, and how the coming year will pan out Nilesh Shah of Kotak AMC says that top batsman Virat Kohli does not change his batting technique according to the pitches.
While many investors maybe worried about the heightened volatility in the stock markets, and how the coming year will pan out Nilesh Shah of Kotak AMC says that top batsman Virat Kohli does not change his batting technique according to the pitches, highlighting the importance of sticking to basics. In an interview to ET Now, Nilesh Shah said, “Just because the pitch has changed, you do not end up changing your technique. So Virat Kohli was successful in Indian cricket pitch playing righty; now in South Africa, you do not go and start playing lefty!”
According to the market expert, investors should focus on long-term wealth creation and invest regularly. In the same address, Nilesh Shah gave the recipe for long-term wealth creation, which contained three ingredients–long-term investment, regular investment and asset allocation.
Elaborating on each ingredient, Nilesh Shah noted that even for creating a mango one has to wait 12 years, highlighting the importance of patience. In case of regular investment, he said that the investors must enter the stock markets at every level, through different cycles. Thirdly, comparing asset allocation to a balanced diet, Nilesh Shah said that one must have a healthy mix of debt, equity, commodity and currency. “If you follow these three basic principles, long-term investment, regular investment and asset allocation, then you will always create long-term wealth,” he said.
On similar lines, Navneet Munot of SBI mutual fund highlighted the importance of investing through SIPs. Munot pointed out that SIPs help investors to average out their costs. “When the prices are down, you get more units and that is where the discipline, the focus in long-term investing comes back,” Navneet Munot said adding that investors should not stop SIPs in downturns.
Tushar Pradhan of HSBC AMC highlighted the importance of following a portfolio approach, rather than investing in single stocks. Pradhan pointed out that only a few stocks compound on their own over a long-period. “It is better to always have a portfolio approach and the best way to actually make that portfolio approach is buy a fund because what you are doing is constantly evaluating what is the estimated profit growth for that company in the near to the intermediate future,” he told the channel.