17K's a reality. So, what do you do now? Stay invested, or go cash? And, where do you fish for new opportunities? The million-dollar question that could now be dominating the minds of countless investors is: What to do with the pile of notional wealth they are sitting on. Does there exist enough investment opportunities even at current levels? If yes, what sectors one should look at. We looked around for answers to these and many other questions.
Though general returns may shrink, panelists felt investors will come across many good opportunities irrespective of the Sensex levels. Most of them, however, are not comfortable about the idea of classifying companies as tier-I and tier-II for investment purpose.
"One should not approach the market with the view that one will invest only in mid-cap or large-cap stocks. We should constantly look around for good opportunities," said Rakesh Jhunjhunwala.
The focus should also be on growth and value stocks, according to some. "I would have no problem buying companies that have high PEs if I estimate their growth correctly," said Narayan Ramachandran.
However, Parag Parikh feels it is the value of stock which matters most while making an investment decision. Nilesh Shah is concerned that managements have started diluting shareholders' value big time.
"The company could be tier-I or tier-II, but it should have top-class management," he said. Nirmal Jain, however, believes that there are more opportunities in tier-II companies as there are a large number of companies listed in this segment.
There was a quick round of discussion on what sector-specific approaches investors should adopt. Here's what they said:
Nirmal Jain : Capital goods, infrastructure and power equipment is where I would be looking to put my money in. Avoid IT stocks and allocate 30-40% to real estate and gold.
Narayan Ramachandran: IT would be my top bet, also a solid growth sector like telecom. I would also take an exposure to four-wheeler stocks.
Rakesh Jhunjhunwala: I feel whenever there is a correction in world markets, followed by a bull phase, commodity stocks will see the maximum expansion in PE. I see no reason why commodity stocks should quote the PE they are quoting at. Banking could throw up a surprise, retail and infrastructure look good bets, but they are fairly priced at these levels. I will put 2-3% of my investments in physical gold,
Parag Parikh: I don't really believe in the sector theory, but I would be looking to put my money in sectors that are not the fad of the moment. Pharma looks good.
Nilesh Shah: Rather than sectors, I would bet on companies that stand to gain the most from domestic consumption, and run by good managements. I would advise diversification into all kinds of assets — equity, property, gold, debt, art, and also international equities
Andrew Holland: Go for Logistics, tourism and banks.
Vallabh Bhanshali: "Equity is the best researched class. I would prefer equity and cash in my portfolio. If an investor can understand some of the other asset classes, only then should he go for it."
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