Best time now to build portfolios with 2-3 yrs horizon: CEO, Motilal Oswal

Nitin Rakesh, CEO, Motilal Oswal Asset Management Co


Just wanting to know in an environment like this so uncertain where you have one day whether markets really shoots off the charts, the next day you see just coming crashing down.

Many investors must be really jittery and must be wanting to know what exactly to do in a market like this and what are you advising your clients right now?

Nitin Rakesh: Right now what we are seeing is diversions between the domestic environment and the global headwinds. So effectively what we are seeing is the increased volatility and if you remember between Jan to March or April this year, we had extremely low volatility as measured by something like a week.

So volatility being faster means rewarding in just short backup. We have to live with this volatility for the next few weeks at least.

The best thing for investors to do right now and that is what we are advising everybody we talk to is not to panic in this environment. The markets come off about 10% to 12% from its peak, it is not to say that we have things that are going along in the domestic environment or on the fundamental side.

So this is a God sent opportunity for people who would like to build portfolios to use this volatility and correction that we are seeing right now to build portfolios with a two to three-year horizon and if you continue to focus on companies and sectors that have a very strong linkage to our domestic demand consumption and growth story, there is very high likelihood that you will not go wrong and you will actually make decent returns from these levels.

At Motilal Oswal, which space do you still think have a lot of value to be unlocked and probably clients that they invest right now, they can actually reap the benefits going forward maybe in the shorter term period probably for 10% to 15% on upside?

Nitin Rakesh: If you build on the theme that we just talked about which is to focus on the domestic consumption story, clearly there are plays that are in there for example automobiles, consumer goods, even banks. Banks is actually one of our top picks right now and things to avoid will really be things that have high degree of correlation with the global markets.