Dalal Street Voice: Invest 15-20% capital on every 2% dip in market but no bottom fishing: Keval Bhanushali of Marwadi Financial Services

Keval Bhanushali, CEO at Marwadi Financial Services believes that investors can look at investing 15%-20% of their capital at this level, but it is not going to be such an easy bishop recovery for the markets, he opines.

In an interview with Zeebiz's Kshitij Anand, Bhanushali said that the Indian equity market is expected to stay volatile due to geopolitical tensions and rising crude oil prices which will impact market sentiments. Panic in the market is rising but this is not the right time to change the investing strategy.

Edited Excerpts –

Q) Is it time to follow Warren Buffett's methodology – be greedy when others are fearful considering a war-like situation at the helm?

A) To be honest, this is one thing which I tell a lot of people that you cannot just mimic Warren Buffett or Charlie Munger’s strategies in isolation or in bits and pieces.

You also have to understand that they have patience levels like no one else. So, if you take any part in the strategy, you always have to keep that in mind.

Having said that, yes, we are in a very tight situation, and I don't really think that it is time yet to start bottom fishing because even though there could be some interventions about war and everything that is going on.

I don't think that we are behind the whole geopolitical tensions, inflation, and also a lot of other global factors which are yet to be factored in.

I don’t see markets rushing into new highs very soon. One can keep a very close eye on markets and start looking at good stocks.

Investors can look at investing 15%-20% of their capital at this level, but I don't believe that it is going to be such an easy bishop recovery for the markets.

Q) What does the history tell us about various Black swan events which have unfolded in history and what is the key takeaway for investors?

A) A black swan event is something that comes out of nowhere. This was more about the ignorance and overconfidence of a lot of global leaders because there were more than enough warning signs that were given about the current geopolitical stress that was happening.

If you look at it, history tells you to not really take anything for granted and when it comes to people protecting their land you should not rule out anyone as a weak candidate and such kinds of things don't really end in a week or 10 days.

It is an ongoing intervention that will be required when you look at any big war in history. Though I am very confident that this issue will also be addressed by global leaders, it is still too soon to go all out in buying right now.

Q) Does it make sense for investors who plan to invest say Rs 10L now or should wait for a dip?

A) Investors should look at investing 15-20% of their capital at these levels and do so in a staggered manner over every 2%+ dip in markets averaging your holdings may not be a great idea yet.

The Indian equity market is expected to stay volatile due to geopolitical tensions and rising crude oil prices which will impact market sentiments. Panic in the market is rising but this is not the right time to change the investing strategy.

Q) Many recent investor MF portfolios might have lost steam and wiped out most of the gains made in last 2 years. Things which portfolio investors should avoid doing amid the current turmoil?

A) The last thing that anyone should be doing is sell their holdings. Never try to do that in a panic situation, especially in a country like India and America.

Mutual fund investors should not try to redeem their units as of yet. If you are an SIP investor you would want to be a buyer at every stage of the market.

I think sometimes the best action is no action and this is the moment of that sometimes. I reiterate that no one should change any kind of investment strategy in the current situation.

Q) Many new NFO were launched post Budget. In light of rising geopolitical concerns as well as rising interest rates – how should investors pick and chose funds? Which MF theme is suitable for long-term investment?

A) I would strongly recommend people who have come into the market in the last past few years to understand that there is a need for debt mutual funds or debt instruments in your portfolio.

Equity is not the only asset class you should look at. It was a very common phenomenon in the past few years where people would rule out debt as an instrument worthy enough to be invested in.

This is a completely wrong approach because equities are cyclical in nature. Today it is war, tomorrow it is going to be something else.

Any kind of unforeseen event will keep it volatile, so debt instrument is something that everyone should look at.

Also, given the current scenario, we expect interest rates to be hiked and if that happens, a lot of people will benefit from debt instruments right now.

Q) When everything is available on a discount what should be stock selection criteria for long-term investors?

A) I have been a strong advocate of a portfolio approach instead of an individual stock approach. It should always be the overall approach of the portfolio.

In the current scenario, real estate is one sector which we are bullish about. So, while 70% - 80% of them might go further southward, there will be 10% to 20% of them which are going to go another 5 to 10 times from here.

It will be too difficult to judge them as yet so I would recommend that you can have sectoral locations or thematic allocation in different themes like platform-based businesses and real estate.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)