Kuvera's video: Kuvera Insights: Staying Invested in a Markets High

In this episode of : Mahesh Patil, Co-investment Officer, Birla Sunlife Mutual Fund; Ashish Rukhaiyar, Business & Markets journalist and Gaurav Rastogi, Founder & CEO - Kuvera.in discuss the common investor urge to 'cash-out' during a markets-high and how this could hurt long-term investment goals. Q: What factors have led to the markets high? - Economy has rebounded to the pre-covid levels and is the reason why the markets have rebounded - Money that has been pumped into the economy too is much higher than during the economic crisis - GDP numbers globally and for India are being upgraded and a good recovery is expected - A good set of reforms around multiple themes will further provide the impetus required for the economy in 2021 - Real estate and infrastructure as sectors too will be contributors along with fundamentals catching up - Corporate earnings growth too is forecasted to be better than the last 4 years - High liquidity low interest rates are leading to high market valuations - Corrections will definitely come by and they are opportunities to buy into Q: What are the risks that the market recovery might not be as much as expected - Recovery needs to be supported by good fiscal measures - If supply side challenges remain and inflation goes up significantly, bond yields could go up and spoil the party - Banks went through a crisis with severe NPA’s and recovering most of it would be a challenge - Upcoming budget and measures need to be looked at Q: How are investors handing the new regime where valuations might look higher but are impacted by the overall economic conditions - Equity funds have seen a net outflow in the last few months - Even when markets have been at a high many investors have been cashing out - The question is Why are domestic investors selling when even FII’s are so bullish - Investor behavior has changed substantially and there are unique trends emerging o New client additions on a high in the equity market noticed o Indian investors are now looking at international markets much more Q: What specific Investor behavior are you noticing? - Investors moving from full-service brokerages to discount brokerages - Tendency to ‘cash-in’ when there is a sharp rise in markets - Markets moving in one direction have boosted confidence - Work from home has given more investors time to invest themselves - Money towards equity will continue increasing considering very few alternate places to invest Disclaimer: These videos are for educational purposes only. Mutual fund investments are subject to market risk