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Equity Returns Set to Drop: Expert Warns Investors
23 Jun
Summary
- Investors should anticipate reduced nominal equity returns.
- Some market segments remain frothy and need correction.
- Global diversification is key to reducing portfolio risk.
Rajeev Thakkar, Chief Investment Officer at PPFAS Mutual Fund, has advised investors to anticipate lower nominal equity returns moving forward. While market corrections have occurred in specific stocks, Thakkar believes some segments remain frothy and require further price or time correction.
Thakkar pointed out significant risks in extremely competitive sectors such as food delivery and discount broking, where profitability is challenging. He also defended his fund's strategy of holding cash, emphasizing that it is a permissible approach within the Flexi Cap category's investment guidelines.
Furthermore, Thakkar advocates for global diversification to mitigate portfolio risk. He noted that while India's market cap is a small fraction of the global total, investing internationally can smooth out investment journeys, contrasting periods of strong performance in both Indian and US markets over the past two decades.
