stock market
Every person investing in the stock market wants his money to double-triple quickly. Due to the pace the market has shown in the last few years, many new investors have started feeling that there is only profit here. But now veteran investor Madhusudan Kela has advised to keep some restraint on this enthusiasm. He clearly says that now it would be meaningless to expect indiscriminate returns from the market like before. Investors should now come to terms with reality and aim for 10 to 12 percent annual returns.
Don’t be afraid of ups and downs, make it your friend
Often when the market falls or sees huge fluctuations, common investors get nervous and start withdrawing their money. There has been a similar situation in recent times also. Sometimes budget news, sometimes India-America trade deal, sometimes rise in gold and silver prices, all these together have made the market quite volatile. Apart from this, selling pressure was also seen in IT stocks due to AI concerns.
But Madhusudan Kela’s perspective is completely different here. He believes that this instability or ‘volatility’ is not your enemy, but this is the real opportunity. When the market is calm, opportunities are less, but when there is movement, only then wise investors make their move. He says that instead of being afraid, one should take advantage of this environment, because this is the time when good companies can be found at the right price.
Not largecaps, here are the ‘hidden diamonds’
Only he who has the courage to think differently from the crowd earns money in the market. Kela believes that large-cap indices have now become quite mature, which means there is only limited scope for returns from there. If you really want to build big wealth, you have to look at smallcap and midcap companies.
They call it “Hidden Gems” or hidden diamonds. Especially such themes and companies which are increasing their productivity by using new technologies like Artificial Intelligence (AI) and whose profit margins have the potential to increase. He gave a very interesting example, just as in horse riding the ‘jockey’ (rider) is more important than the horse, similarly in investment one should look at the ‘promoter’ or leadership of the company. You have to assess whether the person running the company will be able to survive difficult times or not and is he a horse for the long haul?
You can also make Rs 100 crore
There has now been a big and positive change in the mindset of Indian investors. While earlier the stock market was considered a speculative market, today it is being considered the most powerful means of creating long-term wealth. Madhusudan Kela credited domestic investors and SIP for the survival of the Indian market despite the selling by foreign investors.
To explain the power of compounding, he shared a surprising statistic. If a person is disciplined and invests only Rs 11,000 every month for 50 years and continues to get average market returns, then this amount can increase to Rs 100 crore. This figure may sound unbelievable, but it is the magic of long-term investing and discipline. Therefore, instead of becoming rich overnight, the real mantra is to remain invested with patience.
Do not take any decision in haste
There are many questions in the minds of investors regarding the IT sector, especially regarding the threat to jobs due to the arrival of AI. Madhusudan Kela also agreed that the concerns about AI are justified, but citing history, he said that every new technology creates fear in the beginning, but later it becomes a means of increasing productivity.
He believes that Global Capability Centers (GCC) are expanding in India, which can compensate for the losses incurred in outsourcing. However, his advice to investors is clear, do not rush to invest money in IT stocks. It is better to wait until companies’ earnings show stability.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money related decisions.
