Long-term investors shouldn't worry about volatility: Raamdeo Agarwal

Raamdeo Agarwal, MD, Motilal Oswal Financial Securities in an interview with ET Now talks about investors' concerns on the current levels of volatility in the markets.

What is your advice to small investors on how to play the current elevated levels of volatility? Should they be looking at low beta stocks- the kinds of ITC, which have done well since early April?

I think volatility is more important for the short term investors but if you are truly an investor and you want to hold for few years starting from a year to 3-4-5 years, I think you can buy irrespective of the volatility. You buy what you understand and so long as you understand what you are buying, the volatility levels don’t matter.

So my sense is that you got to focus on exactly what you understand and do your homework well. If markets are stable, then its a great time to put in your money. Uncertainty is always a good friend of long term investors. So I would think that this is a right time to put in money into the market.

What about inflows though, because we have seen FII net figure stand at about Rs 22,000 crore? Do you think with the kind of western disturbances we have, Eurozone crisis still playing out, a whole lot of funds would actually kick in into emerging markets, India being one of them?

I think you have intense flow from Europe right now and that is creating lot of chaos worldwide into the risk assets. Gold is top favourite and everybody is running away from emerging markets. But eventually, in next one or two months, people will get tired of talking about Europe and things will start stabilizing. And then again where growth is the highest, money will start flowing in.