Mega Trend Vs Growth: This Market Expert Bets On Long-Term Value Creation — Here's How

The Indian stock market witnessed a broad-based selloff on Friday, dragged by a disappointing set of earnings from the finance and tech sectors, coupled with foreign capital outflows.

Tariff threats have cast a shadow on India's long-term relationship with Russia. However, D-Street experts remain optimistic for the medium-to-long-term outlook for the Indian stock market, supported by low inflation and policy measures.

In the current market scenario, Ravi Dharamshi, chief investment officer of ValueQuest Investment Advisors, told NDTV Profit in an interview that investors need to have a long-term perspective for making money in the market and not seek active returns from a one-to-year perspective. The market expert said his stock picks are focused on a five-year growth trajectory.

According to the expert, India is getting formalised into many business sectors. However, even in a mega trend of a business cycle, one needs to be invested in a "growth phase". "We keep track of markers, such as the tech curve, cost curve, behavioral shifts, regulatory shifts, capital flow, talent flow. These markers tell us which way the wind is blowing," said Dharamshi.

"If the markers make a curve of growth for any business, then that's where the maximum value creation tends to happen. This is when we want to capitalise on," he told NDTV Profit. According to the expert, a mega trend can last for 20 years, 30 years or 50 years, but the phase of making money might not last that long.

The money-making phase can be either a five-, seven- or a 10-year period. "This is when investors must capitalise to make money," he told NDTV Profit. Experts believe the future of businesses in every sector will depend on their ability to adjust to 'megatrends' (major social, economic, political, environmental or technological shifts) and the disruptive forces they create.

According to Dharamshi, one needs to find an inflection point to bank gains from mega trends. Financials remain a long-term play for the market veteran.

"Any business in capital markets should do well over a 10–20-year period. Investors must have a larger perspective for making money in markets, and not just from a one-to-year period," said the market expert. Some of the top instruments for long-term investments include bonds, mutual funds, real estate, stocks, fixed deposits, gold and provident funds.