In this high volatile market, experts suggest to allocate money in these sectors
2 min read . Updated: 23 Feb 2023, 01:46 PM IST
Premium- Capital goods, infrastructure related sectors and PLI related sectors like Pharma, Textile sector could be considered for allocation, said Divam Sharma of Green Portfolio
Sensex and Nifty were volatile on Thursday on the back of weak global cues and notes from a Federal Reserve meeting showed officials expect to keep US interest rates high to fight stubborn inflation. The volatility index (Vix) had risen to 15.59 on Wednesday, highest since February 2.
“This is a highly volatile market where aggressive contra trading positions should be avoided. You should not be leveraging in these markets. We have seen many small and mid-cap companies (broader market) fall to very comfortable valuations. If you have existing investments, you can realign the portfolio, by selling the companies where there is a long term impact on fundamentals and allocating more cash towards stocks where fundamentals are intact while the prices have fallen beyond fundamentals," said Divam Sharma, Founder at Green Portfolio, SEBI Registered Portfolio Management Service Provider.
Sectors to allocate
“If you can allocate money through SIP, this continues to be a great time to allocate as we have a good cushion of valuations and comfortable fundamentals. If you want to allocate lumpsum, we would suggest that you stagger the allocation over next 2-3 months. Capital goods, infrastructure related sectors and PLI related sectors like Pharma, Textile sector could be considered for allocation," suggested Sharma.
The Federal Reserve's latest minutes indicated that a majority of the members favoured smaller rate hikes, however, market participants have been reacting on fears of an aggressive rate hike path remaining intact. On the other hand, a majority of the Reserve Bank of India's (RBI) policy committee members have reiterated that it would be premature to lower the guard against inflation.
“We are now in the 16th month of consolidation in a range of NIFTY 50 or NIFTY 500, and the index remains at the same level, but the broader markets are widely wounded But we believe after big consolidation, there is a structural bull run which starts, pre-covid we saw nearly 9 quarters of consolidation and after that, we had seen a major bull rally. We believe this is the best time to do a portfolio review and rebuild," said Rohan Mehta, CEO & Portfolio Manager, Turtle Wealth.