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Jul 07 2018

Sumit Bilgaiyan on Valuations and Volatility in Stock Market

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Sumit Bilgaiyan on Valuations and Volatility in Stock Market
<p>First half of 2018 showed&nbsp;meaningful returns to investors, but with the country seeing incresing volatility, how do we approach the rest of the year?&nbsp;</p> <p>Equity99&#39;s&nbsp;founder <strong>Sumit Bilgaiyan</strong>, whose company undertakes wealth creation for family offices shares his insights:&nbsp;</p> <h4>Q:&nbsp;There is too much of volatility in the stock markets lately, and it is shaking investors. What&rsquo;s your view?</h4> <p>The on-going scenario is going to be the year to build a portfolio. There is no good or bad time to invest as long as the stock has the potential to gain. Valuations and volatility do not really matter that much. Stock markets have been volatile all throughout history. Whenever there is a string of negative news or a turn of events, volatility tends to spike up. So it&rsquo;s nothing new. What you should do is focus on the quality of noise that is driving the markets. If it&rsquo;s not too negative, and if it&rsquo;s not going to have a long-term impact, then volatility can be a blessing in disguise for investors. You will get an opportunity to get quality stocks at better prices.</p> <h4><br /> Q: Isn&rsquo;t the stock market too high, and won&rsquo;t investors tend to get trapped at higher levels?</h4> <p>Yes, I agree, many stocks are at their historical highs, but chances are that we may still see some upside over the long term. The fundamental factors that are driving India which is consumption, infrastructure investments, operational efficiency, better business environment for regulation-compliant companies, are all there and is changing the business landscape. Investors who are buying now will have to focus on good quality companies, and diversifying the portfolios adequately. It&rsquo;s not the time to take a punt, but do some serious research and pick stocks. If you do your homework well enough, you won&rsquo;t get trapped at higher levels, but you will end up with some sizeable gains in the coming years.</p> <h4>Q: What are the levels you are anticipating for the year end?</h4> <p>While the large-caps will be higher than where we are, in mid- and small-caps, we would see a lot of churns. Investors are clearly sifting between the good companies and the marginal players by assigning a higher price-earnings multiple to these companies. I anticipate this trend to continue for the rest of the year. Companies that can demonstrate earnings growth, and walk the talk so to speak, will be favoured in this market.</p> <p><strong>Read more @ <a href="http://www.businessworld.in/article/Valuations-And-Volatility-Do-Not-Really-Matter-That-Much-Says-Sumit-Bilgaiyan-Equity99/07-07-2018-154115/" target="_blank">BusinessWorld</a></strong></p>

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