On a day when the domestic equity market eroded another 5 per cent of investor wealth in a snap, market veteran Raamdeo Agrawal said it’s about time one started investing 10-20 per cent of investible money every week.
Calling it a short-blast SIP, Agrawal said if one believes the ongoing virus outbreak would go on for another 3-4 months, that is the period one must go investing.
“The market is in an uncharted territory,” Agrawal said. “But I do not expect the virus impact on earnings to go beyond FY22.”
“If you are sitting on the sidelines, you have got it right. Stocks are available at lower prices and it is time to make a portfolio. But if you are not competent to understand the underlying value of a company, go find a few brilliant fund managers and begin rolling out 10-20 per cent investment now,” Agrawal told ETNOW in an interview.
He, however, warned investors not to make bulk investing in a single day and rather spread it out over next two-three months to average out the worst of the market selloff.
“After one year or 18 months, you’ll have a fabulous return. When the whole world is fearful, you have to be greedy,” Agrawal said.
On Thursday, BSENSE -4.73 % Sensex plunged 2,100 points and was ruling below the 27,000 mark, a level last seen four years ago. Nifty slipped below the 8,000 mark, after hitting a record high of 12,430 just two months ago.
Data showed stock investors in India have lost nearly Rs 54 lakh crore in last two months. The BSE market capitalisation today stands at Rs 106 lakh crore against Rs 160 lakh crore on January 20, 2020.
Agrawal said he has never seen a situation like this where the global economy is coming to a halt. “It is not that there is no purchasing power, but the ongoing selling in stocks is keeping buyers away,” he said.
The market veteran said an investor who tried to bottom-fish at 9,000 on Nifty is now scared as the market has slipped below the 8,000 mark. “ETF selling has been another major problem,” he said.
The underlying value of the companies will prevail again, Raamdeo said, adding that the earnings power of strong companies would not change. He does not expect this crisis to impact earnings beyond FY22.