Will the market hold at current levels? Should we deploy money now or should we wait? Is it too late to chase returns in smallcaps now? Or should we actually play safe? Would it be a bright idea to move out of slower moving portfolios into fast moving ones?
The questions running on investor’s minds are numerous.
There is a sense of urgency created by the slow moving nature of the largecaps. The bigger companies in the Indian market haven’t done much in many years. The Nifty has not done anything in three years. Given the flat trajectory, investors have clearly lost interest in largecaps and are completely aligned with buying higher risk midcaps and smallcaps.
Consensus is totally with them. But, safety is clearly with largecaps now and valuations are the safety net. The words of Warren Buffett give enormous clarity for the current market setting.
“Predicting rain doesn’t count; building arks does.” — Warren Buffett.
Raising portfolio safety is not just looking like a good defence mechanism. It looks increasingly like a strategy to better future returns. Seeking safety looks a good way to raise portfolio performance. It probably is that moment to invert.
