Neeraj Dewan recommends patience, advises investors to add on market dips

“But if one is invested their own money and there is no hurry for them to liquidate, there is no immediate requirement and one can stay invested for a couple of years, one should stay invested in the core portfolio,” says Neeraj Dewan, Market Expert.

The question is now really about your core portfolio. The momentum portfolio most have already exited if they were in the money. But do you touch your core portfolio at this time, do you try and protect capital because the world seems to be going through a very-very unstable state?
Neeraj Dewan: Yes, definitely, there is a lot of instability because of tariff talks. People were hopeful that something may happen before the actual date, but then I do not think anything is happening there. Tariffs have been imposed and there are counter tariff. So, this thing what we have been fearing is true right now. But I do not think one should be really touching at the core portfolio.The core portfolio should stay because there is definitely a lot of fear on the street. About five-six months back there was a lot of greed, but now that has converted into so much fear and no one is really talking about buying anything. Everyone is talking about what to sell. Now, you even asking me a question about the core portfolio and whether one should sell that also and sit on the side.

But if one is invested their own money and there is no hurry for them to liquidate, there is no immediate requirement and one can stay invested for a couple of years, one should stay invested in the core portfolio. And even if suppose market is coming close to 21,800 and if it is coming below that also, one should start slowly adding also more below that level.

No, I am asking purely because I am guessing the viewers would be in panic mode looking at now the global market correction as well, which has begun, it seems. Other than that, the question also is do you now start buying on declines and do you keep that largecap tilt and I am talking purely about core portfolio holdings?
Neeraj Dewan: Yes, absolutely, one should only be investing the money that the person can spare for a couple of years. One should not be investing just for a bounce back. A bounce back may or may not come immediately. Market may keep on drifting down or market may make a bottom soon and start consolidating, no one really knows the answer to that question because we are in the middle of a turmoil which is happening because of trade talk.

And domestically also, there is the fear of the growth slowdown which was there in the second quarter results, third quarter also was not that great or better than the second quarter. So, till that narrative changes domestically on growth, we are not really sure on whether we are bottomed as far as our growth is concerned. And of course, you are in the middle of a turmoil which is happening globally. So, if you are an investor who is willing to invest for a couple of years, even if you see equity market return, if you see that supposed pre-COVID we were at 12,300, 12,400, even if you take a 15% annualised return, leaving one year in between, that COVID one year nothing happened, still you should be somewhere around 21,700, 21,800 levels. So, if the market is falling below those levels, one should be accumulating on those dips.
Also, right now, one is wondering about the prospects of IT because of the uncertainty emerging from US, would you say it is safest to avoid IT as a sector?
Neeraj Dewan: Yes, I have been saying that for the last two-three weeks only that one should right now avoid IT. One should let things stabilise or get some clarity on what the US view is and how things will pan for the IT space. One can avoid IT for the time being and look at other sectors which are more domestically focused.

Wanted to understand your view also coming in for the auto and pharma space in particular because when you talk about tariffs, these two sectors are also in focus given the fact that we could see some reciprocal tariffs on those sectors for India as well come April 2nd. What is your take coming in on that one? Do you think that given the fact that we could see some moves on the tariff front on the pharma sector, should we go in for this one right now or avoid it because what we are expecting that the tariffs would not be that much on the pharma space, Indian pharma space in particular.
Neeraj Dewan: Yes, I think first, automobiles. Automobiles also there is a lot of fear about tariffs, that is mostly maybe happening more towards the auto ancillary part, very few of the OEMs would be impacted in a large way because of that.

So, domestic players like Mahindra & Mahindra, Maruti, they are also correcting right now. So, the correction in those names can be used to accumulate slowly.

The idea is to accumulate, not to really go and buy outright. Buy as the market is correcting and slowly pick it up as and when you saw a dip in the market. And the second is the pharma space.

Pharma space, one can be stock specific. There is that API space where you saw good numbers coming and they have a good presence globally also. But they may get impacted a bit, but then one can be stock specific in that space.
So, pharma, there is a talk that they will also be impacted. We do not know to what extent. So, till we get overall clarity, one should not be going all out into pharma and be very-very stock specific there.

I wanted to understand which are the themes that you are looking at very closely and if there is an opportunity, you would actually go in and park your moneys right now.
Neeraj Dewan: Basically, I am looking at only long-term investing right now and I feel that there are opportunities in the domestic focused sector, the domestic financials, even the PSU banks there, some of the NBFC, then our domestic focused infrastructure companies, water infrastructure companies, and then there is even your consumption names like hotels or even some of the FMCG names like ITC or Britannia or Godfrey Phillips.
These are mostly focused on Indian consumption and India infrastructure.

These are the themes which I feel that because when the markets correct, everything falls like these also, all these names are quite high beta, so there can be a harder fall there. So, these can be accumulated.

These are the sectors where though there will be a short-term turmoil because of global headwind, but domestically I feel that there is a strong case that our growth, which had faltered in the last couple of quarters, may have bottomed and you may see upward trend from these levels.

You saw the GDP numbers, you saw the auto number, there were some encouraging numbers which came from that.
Plus, even inflation is in control, interest rates can come down further going ahead. RBI is infusing liquidity and they may continue doing so. So, all these factors can augur well for our domestic focused companies and sectors.