SIPs Are The Way To Go In Volatile Market: Top Fund Managers
Long-term investors understand that equities are not always a one-way street, and the only way to manage volatility is through disciplined investing, they say.
As markets face heightened volatility following a prolonged bull rally, experts reiterated that systematic investment plans are the most reliable strategy for long-term investors.
In a panel discussion on NDTV Profit featuring Maneesh Dangi, founder of Macro Mosaic Investing and Research; Parag Thakkar, fund manager at Fort Capital; and Harsha Upadhyaya, chief investment officer - equity, Kotak Mahindra AMC; there was consensus that while market corrections are underway, disciplined investing remains the best approach.
"What we saw over the last four and a half years post-pandemic was an unusual market," Upadhyaya said. "Entry valuations were attractive, earnings growth was surprising, and market breadth was strong."
However, he said that with economic growth slowing and valuations higher, investors should brace for moderate returns and higher volatility.
The last four to five years of returns have been exceptionally high, Dangi said. "Moving forward, returns are likely to revert to more average levels."
Valuations are not overly stretched but still expensive. For most investors, the best defence is to invest systematically through the SIPs over the next few years, he said.
Thakkar dismissed the notion of a bear market, describing the current scenario as a "time-bound correction". "India's macros remain resilient with strong corporate and bank balance sheets, fiscal stability, and political consistency."
However, muted second-quarter earnings and GDP growth at 5.4% have dampened investor enthusiasm, he note added.
Despite market fluctuations, SIP contributions continue to grow steadily. "Long-term investors understand that equities are not always a one-way street, and the only way to manage volatility is through disciplined investing," Upadhyaya said.
Panelists also highlighted the broader market context. Dangi pointed out that Indian markets typically see a 20% correction every three to four years, which he described as "business as usual".
"Investors must recognise that the exceptional growth seen post-Covid is dissipating, and we are reverting to mean growth levels," he added.
While India's domestic macroeconomic factors remain stable, global pressures like high US interest rates and a strong dollar have impacted market sentiment.
"Global macros are very challenging, and the rupee's depreciation adds to the complexity. Earnings momentum has slowed after a strong four-year run, indicating the need for a more cautious approach," Dangi added.
