Stock-picking, patience key as market turns bottom-up

Equity investors will need to rely on sound stock-picking and patience to generate superior returns in the coming years, said market experts at Business Standard BFSI Insight Summit in Mumbai.

- BS REPORTER

The experts spoke at a panel discussion titled 'Where Are The Market Opportunities - Where Should Investors Allocate?' moderated by Sundar Sethuraman of Business Standard.

"We are at a stage where stock-picking becomes important. It's very much a bottom-up market. The easy money that existed earlier is no longer available. Investors must remember that equities are a long-term asset class - requiring discipline, conviction, and a focus on fundamentals," said Pramod Gubbi, cofounder of Marcellus Investment Managers.

On the moderate equity returns seen this year, panellists noted that the market is merely adjusting after years of excessive post-pandemic gains.

"We had four years of exuberance post-pandemic and are now witnessing a return to normalcy. But valuations still remain above historical averages.

Between caution and optimism, it's fair to say investors need to be cautiously optimistic. The core of equity investing is risk management - there are no obvious themes to play right now. Returns and earnings growth have both been in single digits, and valuations have time-corrected. Yet, markets are not exactly screaming buys either," Gubbi said.