Equity market returns can't have fixed-income-like consistency

We don't make market timing calls; we are typically fully invested, with cash levels of less than 1% Prashant Khemka Founder of WhiteOak Capital Management

- Dipti Sharma

India has been in one of the longest bull markets, with this phase starting in March 2020, said Prashant Khemka, founder of WhiteOak Capital Management. He thinks that we have been somewhat spoiled by the returns over the past five years. In the recent months, the stock market has come off its highs, but that's nothing unusual.

"We've come to expect equity-market returns with fixed-income-like consistency, which isn't a reasonable expectation," he said, adding, "We should temper both our return expectations—aiming for low double digits rather than mid-teens—and our expectations for consistency".

Looking ahead to 2025, Khemka expects pre-tax market returns of 10-11%.

Edited excerpts:

To begin with, if you were to get ₹10 lakh, where would you invest?

Assuming all living expenses are covered, my approach is always the same. Essentially, all available money is entirely invested in the stock market. These days, my wife handles these investments based on standing instructions. If there happens to be any excess money, we invest it in mutual funds or other investment vehicles of WhiteOak. Occasionally, I even say jokingly that the only times my wife and I argue are when she might slip up and leave money idle in the bank for a few days instead of deploying it into the market. We are always fully invested in equities and have never prioritized fixed deposit as investment. So, that continues to be the case.

Considering what you said, how would you look at diversification, given that many have pointed out that diversification is key in a volatile market. So, how would you look at that?