 "Don't be a punter: Raamdeo Agrawal")
Is this the right time to buy mid- and small-cap stocks?
Clearly, the markets are pricey at this point. So, one has to be a little cautious. But positive returns will come if you are willing to stay invested for the long term. Do not buy for six months, or one or two years but for at least six to 10 years. Do not come in as a punter, with the mindset of buy now, sell later.
Do you think valuations can be a deterrent in picking mid- and small-caps now?
Overall valuations look expensive. But if you dig deeper, you will find stocks that are expensive, those that are cheap and some fairly valued. So, take a stock-specific approach. There are about 3,000 mid-caps to choose from, so the universe is quite wide. And there are plenty of multi-baggers out there; it's only a question of finding these.
What is your advice to investors?
Buy quality, not junk. I don't believe in a particular asset allocation like 70:30 or 60:40. If you like something, you can allocate even 50 per cent of your money in the stock. It's a question of conviction. We are not focused on market-capitalisation per se but on finding quality stocks. One can buy 15-20 mid-cap stocks to take the full benefit of diversification. Do not go beyond 20, as it will become difficult to track these.
What about inexperienced investors?
Someone not confident of investing directly can use the mutual fund option.
Clearly, the markets are pricey at this point. So, one has to be a little cautious. But positive returns will come if you are willing to stay invested for the long term. Do not buy for six months, or one or two years but for at least six to 10 years. Do not come in as a punter, with the mindset of buy now, sell later.
Do you think valuations can be a deterrent in picking mid- and small-caps now?
Overall valuations look expensive. But if you dig deeper, you will find stocks that are expensive, those that are cheap and some fairly valued. So, take a stock-specific approach. There are about 3,000 mid-caps to choose from, so the universe is quite wide. And there are plenty of multi-baggers out there; it's only a question of finding these.
What is your advice to investors?
Buy quality, not junk. I don't believe in a particular asset allocation like 70:30 or 60:40. If you like something, you can allocate even 50 per cent of your money in the stock. It's a question of conviction. We are not focused on market-capitalisation per se but on finding quality stocks. One can buy 15-20 mid-cap stocks to take the full benefit of diversification. Do not go beyond 20, as it will become difficult to track these.
What about inexperienced investors?
Someone not confident of investing directly can use the mutual fund option.