Outlook 2023 by Nilesh Shah: Asset Allocation

A lot can change in the new year. But certain things remain constant – and a disciplined approach to investing should be one of them.

As we step into 2023, let’s discuss what the year could pan out like and what your asset allocation could be.   

Equity markets are currently discounting an accelerated earnings growth journey for corporate India. Hence, being careful with selecting stocks will be vital if one is looking to generate returns as they did before.

Considering that India’s valuations are currently above its historical average, investors must consider the year as a buy-on-dips market, and continue to focus on asset allocation between equity, debt, gold and real estate.

 

 

This can help you navigate the choppy global waters where your Indian boat remains steady.

Our recommendation to investors is to keep some dry powder to buy equities on dips while having a marginal overweight stance for large-cap companies and buying small- and mid-cap companies at opportune times in case of a correction.

Investors who have a relatively higher risk appetite can also consider investing in the infrastructure and manufacturing theme.

Debt funds should also be a part of your portfolio, as they could help anchor your portfolio in the choppy waters of 2023.

Our view for precious metals is that we are bullish on silver and gold over the medium term. Our call on gold in 2022 has rewarded investors, and we think that a Gold Fund of Fund or an ETF on Gold and Silver can be a very convenient way to invest over the physical holding of both these assets. 

With this, we wish you a very happy and healthy 2023. Happy investing!

 

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