Ace fund manager Nilesh Shah has said heading into 2025, investors should look at valuations and not play on momentum strategy in a market he sees entering a test cricket zone after a stellar run of five years.
"The next year will be like a test match after five years of T20," Shah, known for his cricket analogies to explain market dynamics, told NDTV Profit in an interview.
"Small and mid-caps generated returns of 28%, large caps gave 16–17%. The expectations have gone up and people think we should now get at least 25% return going forward. I don't think that is possible now," the managing director of Kotak Mahindra AMC said.
"Inflation has eased, so consequently, nominal growth will go down. Valuations are now fair. So now it's time to take runs like in a test match instead of scoring fours or sixes in T20s," he said.
Shah, who thinks the benchmark BSE Sensex will touch 1,00,000 points on a 'Tuesday', said value investors might make money, but it is difficult for day traders. He advised investors to keep a five-to-10 year investment horizon rather than be concerned about one year's return.
The fund manager said underperformance happens with companies and not the whole sector, even as he noted private banks being a disappointment in 2024.
India, he said, is now the engine of the world economy alongside China and the US, and the incoming Donald Trump presidency will be a positive.
"Other countries have self-goaled while India has not. Russia is plunged into war, Brazil is adopting communist policies, South Africa is mired in social strife, the Chinese economy is slowing and population ageing. During this time, we are progressing. India remained politically stable in an election year," he said.
Also Read: Mihir Vora's Top Investment Ideas For 2025
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