Contrarian investing is becoming increasingly popular in the current investment climate still affected by the Iran war. In simple words, contrarian investing means that the worse the market conditions appear, the better are the opportunities for making profits.
As the name implies, contrarian investors try to go against the trend. They get excited when a good company’s stock price falls suddenly, but unreasonably. Just like the current market decline is a result of conflict and global uncertainty. This decline is not due to the company’s fundamentals.
What do experts say
Pankaj Mathpal, Founder, Optima Money believes that buying at current levels is a good opportunity and investing in mutual funds with a portfolio of large and midcap sized companies is a good strategy. Perhaps this is the best time to enter the market, especially for those mutual fund investors who missed this opportunity before the rally. Experts believe that the recent fall in equities has reduced India’s valuation premium, ending the excessive rise in share prices and bringing large-midcap sized companies to a more comfortable level. Since an experienced fund manager can easily handle the complexities of the volatile market, investing through mutual funds is an effective investment strategy for investors.
There is opportunity to earn in these sectors
Economists believe that India will enter a period of high growth in the coming months and this growth will be big. It will include almost all industry sectors like manufacturing, consumption, power, financial services, infrastructure, healthcare, education and digital services. This is likely to benefit large and midcap stocks, which will benefit the most from the expansion of economic activity. Large and mid-cap mutual funds have performed well in the last few years. The leader among them is Nippon India Vision Large and Midcap Fund, which is one of the oldest funds in this category.
17.91% return in 3 years
This fund has given annual returns of about 17.91% in three years. Large and mid-cap funds of ICICI Prudential, Bandhan and Invesco have also given double-digit returns in three years. ICICI Prudential gave returns of 16.41%. Large and mid-cap funds of Bandhan and Invesco recorded returns of 15.33% and 14.97% respectively in the last three years. Mutual fund advisors place big bets on large cap and midcap mutual funds because large caps provide strength and midcaps have immense growth potential and investing at such times can provide alpha returns, provided investors do not panic and stay invested in case of further decline in the markets.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsh advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
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