“Allocate Across Assets, Think Long Term On Equity”

All things that could go wrong went wrong in 2022. After a record of sorts last year, the Street saw extreme volatility amid a concoction of macro headwinds, primarily led by a hike in interest rates by central banks across the globe. The sudden reversal of liquidity amid an inflationary environment, triggered by the Russia-Ukraine conflict roiled markets and economies worldwide. Recessionary winds are blowing across the U.S. and Europe. While India is grappling with the fallout, its growth story remains intact. Against this backdrop, Fortune India got the country’s leading private wealth managers, Ashish Gumashta of Julius Baer India, Ashish Kehair of Nuvama Wealth Management, Anirudha Taparia of 360 ONE Wealth, Atinkumar Saha of Deutsche Bank and Rajesh Saluja of ASK Wealth Advisors to discuss how different asset classes will perform in the year ahead. The discussion was moderated by V. Keshavdev. Edited excerpts:

CY22 has been a year of macro uncertainty and volatility, and there are concerns that it could be a 2008 redux. What is your view?

Ashish Kehair, MD & CEO, Nuvama Wealth Management: There is a clear divergence of trends. Growth is visible on the ground, even client interactions reveal a positive sentiment. Credit growth is picking up as well. Yet, given the inflationary concerns, global recession, troubles in the Eurozone, this is not a market where you can be all-in because you don’t know how it will play out. The view on inflation has gone from transient to sticky, and we are now talking about recession. So, it will impact flows as interest rates are at unprecedented high levels. While I don’t see a repeat of 2008 when the indices more than halved, I don’t foresee the market going up in a hurry either.

Anirudha Taparia, co-founder & joint CEO, 360 ONE Wealth: Yes, it has been an unprecedented year with all the macro uncertainties at play. Going into the new year and 2024, it will all boil down to two things: How worldwide economies tackle inflation and, second, the interest rate trajectory.

Ashish Gumashta, executive chairman, Julius Baer India: Clearly, the U.S Fed’s rate hikes have exported unprecedented volatility across bond, equity and currency markets. Volatility is usually followed by shrinking of liquidity and we are already seeing challenges around refinancing. In India, too, interest rates have risen quite fast. Borrowing costs have gone up significantly over the past one year with five-year G-Sec now at 7.13%-plus. It’s time to be cautious on equities. With yields becoming attractive, investors can start looking at fixed income.