Budget Strategy | Diversify investments across equities, fixed income & commodities: Rohit Murarka of Kotak Cherry | Stock Market News
Source: Live Mint
Rohit Murarka, Business Head, Kotak Cherry believes the market is expecting some kind of stimulus in the budget as the overall economy, especially demand conditions, is facing a slowdown. Murarka suggested that investors diversify investments across various asset classes like equities, fixed income, real estate, and commodities. This strategy helps mitigate risks associated with any single asset class and can provide more stable returns over time. There could be a lot of market fluctuations, and this makes fixed-income investments an essential component of a diversified portfolio. Asset classes like real estate and commodities can help hedge against global uncertainties and inflationary pressures, he added. Edited Excerpts:
What are the Indian market’s expectations from the upcoming budget?
With the overall economy especially demand conditions facing a slowdown, the market is expecting some kind of stimulus in the budget. This may include both on the household side to propel consumption demand as well as from the industry perspective to increase investments.
How should investors position their portfolio for the budget with respect to mid-caps and small-caps?
When considering how to position your portfolio with respect to mid-and-small cap funds, it’s important to remember that a single budget announcement should not significantly influence your overall asset allocation strategy. Instead, your portfolio should be well-diversified and not overly concentrated in any one category. A diversified portfolio helps mitigate risks and can provide more stable returns over time. This means balancing your investments across various asset classes, sectors, and geographies, rather than focusing too heavily on mid-and-small cap funds or any other specific category. By maintaining a diversified approach, you can better navigate market fluctuations and economic changes, including those that may arise from budget announcements.
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Apart from equities which asset class would you recommend for one’s budget portfolio?
India is projected to grow at 6.7% in 2025. This growth will likely be driven by strong private consumption, investment, and government spending on infrastructure. 2025 is going to be the year of asset allocation. A well-balanced portfolio can help manage risk and optimise returns, especially in a dynamic economic environment like 2025. Diversify investments across various asset classes like equities, fixed income, real estate, and commodities. This strategy helps mitigate risks associated with any single asset class and can provide more stable returns over time. There could be a lot of market fluctuations, and this makes fixed-income investments an essential component of a diversified portfolio. Asset classes like real estate and commodities can help hedge against global uncertainties and inflationary pressures.
Do you believe Nifty valuations are fair now?
Markets do appear reasonably valued, except for certain pockets of exuberance. Prefer large caps on a relative valuation basis.
Will 2025 be a good year for FPI inflows even though the start is a bit weak?
FPIs have sold $17.2 billion overall, while DIIs have purchased $28.7 billion from October 2024 until January 21, 2025. January alone has seen FPIs selling $5.4 billion overall and DIIs buying US$6.6 billion. This contrast in the patterns of both parties shows they view the current circumstances very differently, with respect to flows and conviction about valuations of the Indian market. Will this change? This depends a lot on economic and political developments in both the US and India. The “America First” policy in the US will create more uncertainty. We will need to wait on that.
What are your views on IPOs? Is it the right time to subscribe?
If the company is solid and the IPO is fairly valued, there is no harm in subscribing. However, like all investments, investors should align their holding period before making such decisions.
One piece of advice for new investors.
2025 may throw up moments where people may doubt their investment philosophy. You shouldn’t. Stay disciplined, and align your investments to your personal financial goals.
Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
