homemarket NewsDevina Mehra outlines strategy to navigate market volatility, cautions against these risky bets
Devina Mehra outlines strategy to navigate market volatility, cautions against these risky bets
First Global’s Founder, Chairperson & MD, Devina Mehra advises investors to stay cautious while investing in microcaps, small caps, IPOs, or some sectors like banking.
While a major market crash seems unlikely anytime soon, First Global’s Founder, Chairperson & MD, Devina Mehra believes investors must be ready for a sideways correction or consolidation. The best way to navigate such a volatile market is to hedge your portfolio well, she said.
First Global currently has more than 75% of its portfolio hedged, Mehra said, adding that "if there is a sharper correction than expected, we are hedged. But on the other hand, since our view is that there is no big risk in the medium term, we don't want to be out of the market and miss out on a possible up move."
Hedging involves using alternate financial instruments to reduce the risk of adverse price movements in a portfolio, essentially insuring against extreme market moves.
She advises investors to steer clear of high risk bets such as the microcap, and smallcap segments, and companies coming up with initial public offerings (IPOs).
Mehra's advise comes on a day when both the benchmark Sensex and Nifty 50 slumped close to a percent in early trade, before recovering mid-day on buying in select midcaps. Negative cues in the global market with higher-than-expected inflation numbers in the US have hit investor sentiments.
Mehra also shared her preferred picks sectoral picks and those she is cautious on.
She is overweight on autos and auto components since the beginning of 2023. She has been positive on Tata Motors as well.
“Banking is still something among the major sectors that I would say one should be careful of,” she said.
Sharing her views on the recent crisis at Paytm, she said, First Global never bought the stock or studied it in depth. "At the IPO time, I clearly thought it was overpriced. Not just that, the whole slew of new-age IPOs that came out in 2021," she added.
On January 31, the Reserve Bank of India (RBI) pronounced a rather unusual death sentence for Paytm Payments Bank. It barred the bank from undertaking any banking activities whatsoever — no deposits, no credit transactions, no wallet top ups, no bill payments, nothing — after February 29.
For more, watch the accompanying video
(Edited by : Shweta Mungre)
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