Volatility to persist for 2-3 months; pick stocks for long term: Experts

MUMBAI: Volatility is likely to persist in the market for the next 2-3 months and things will look up only by the end of the year. Be that as it may, investors should learn to live with volatility and be alert to grab every opportunity that this stock correction presents to them.

This was the broad consensus on the equity market and equity investment strategy among some of India’s top fund managers at Cafemutual Confluence 2015 on Friday.

S Naganath, a Dalal Street veteran and President & CIO of BlackRock Investment Managers, expects stock volatility to persist for some more time largely due to further currency depreciation by other emerging markets, and India will not remain immune to that.

“The best thing investors can do is to sit tight,” he suggested. “One can look at picking stocks for medium- to long-term period after the current phase of volatility.”

Naganath expects to see some revival in India Inc’s earnings as early as December quarter. “Investors will not be disappointed post December quarter. Earnings are likely to improve by December quarter and further into 2016, 2017,” he said. “By the end of the year, investors will not have anything to complain about.”

Anup Maheshwari, EVP & Head of DSP BlackRock, however, suggests investors should buy amid this volatility for the long term. “Look at companies where valuations have not shot up. There is still value or look for companies where ROC is increasing rather than decreasing. Valuations should not be the only parameter driving your investment decision...look at management, business. Valuations keep going up and down,” he pointed out.