3 essential investment lessons from Sankaran Naren’s successful journey | Mint

Sankaran Naren, a very renowned figure of Indian financial markets, has been sailing through a number of market cycles as the Chief Investment Officer (CIO) at ICICI Prudential Asset Management Company. Investors can pick up a lot from him on the basis of his experience, macroeconomic understanding and stock ideas.

Investment strategy of Sankaran Naren

Sankaran Naren has over two decades of experience at ICICI Prudential AMC and is known for his contrarian investment approach buying undervalued sectors when sentiment is low and exiting during market highs.

His deep understanding of macroeconomic trends and market cycles has helped ICICI Prudential become a leading asset manager in India. Naren’s disciplined, research-backed strategy emphasises consistency and patience, even in volatile markets. The three investment lessons from his career outlined below can be beneficial to Indian investors with sound investment choice:

Emphasis on growth and quality

One of the most vital investment thesis of Naren is the quality and growth-oriented strategy. He has been of the view that it is imperative that one should invest in companies having: solid fundamentals, stable finances, strong moat over peers, stable performance track record and a documented record of expansion.

This approach, if followed, will help the investors to stay clear of speculative trading and rather build a portfolio that will be able to withstand market volatility. Thus, given the competitive advantage of most companies along with their quality, wise investment decisions are feasible only through simple strategies and consistent reading and understanding of key fundamentals of companies.

Diversification is the key

Naren has also emphasised the importance of intelligent diversification of investment portfolios in his other interactions, so that one accumulates wealth in the long run. By diversifying consistently across industries and asset classes, ignoring taking loans, short term vision, one can minimise risks and gain under both bull and bear markets.

Hence, it will be wise on the part of investors to have a balanced portfolio with a mix of growth and value stocks along with debt investments to manage risk effectively.

Long term vision

One of the most important lessons that can be drawn from Naren’s investment experience is long-term thinking. He has always been guided by the philosophy of taking investment decisions keeping in mind a long-term objective and trusting the process of compounding. 

Therefore, investors do not need to take decisions with a short-term mindset of market fluctuation and greed. Mindset of long term vision and simplicity can assist in comprehensive compounding of the portfolio much similar to the ideals of investing legengs such as Warren Buffett and Charlie Munger. 

Finally, Naren has also commented on the necessity of overhauling investment behavior under altered conditions in the stock market. It’s a matter of remembering and always keeping in mind the economic trends, regulatory changes, and consumer trends, each of which can be important to shape investment decisions.

By being current and adaptable, investors can rebalance investments so that maximum return is achieved at the lowest risk. Continuous reading, selecting good mutual funds, staying current regarding macroeconomic and geopolitical trends, and taking a position based on it constitute the structured strategy.

Thus, Sankaran Naren’s investment suggestions provide investors useful inputs and directions. Therefore, by investing in quality shares, diversifying the portfolio, taking into account the long-term perspective and pace of change in terms of the requirements of the market, all logical investors can certainly attempt to overcome the hurdles of the equity markets with ease.

Disclaimer: This article is for informational purposes only and does not constitute financial advice; investors should consult a professional before making any investment decisions.