Suveer Chainani, Executive Director – Client Relations at Avendus Wealth Management believes that it should be remembered that volatility is the price you pay for stocks as an asset class for long term returns and that ‘so don’t be too disturbed by the market correction.
He said we had to play on domestic cyclicals outside the banks. Under domestic cyclics, we can look at real estate, led by manufacturing, capital goods and infrastructure. These areas sound exciting, but beware of anything that costs more than 30-40 times as interest rates and PE multiples are very closely related. It is only a matter of time that the normalization of interest rates will occur and in some countries they have already started and there is talk that in India also the normalization would start.
“So beware of anything that is expensive and that precludes buying high quality at any price. This is something to be careful about,” Chainani said.
He said COVID-19 was a bullshit when it first started, but later turned into a bull’s-eye because of central bank actions around the world.
First publication: STI