Diversifying investments across different assets and reducing leverage in equity markets has been advised for investors by, Kotak Asset Management, since the coming year is expected to be volatile, akin to a roller coaster ride. Allocation between debt, equity, real estate and commodity will plat a crucial role, to remain neutral and use corrections as windows to enter the market.
The asset management remained marginally overweight on large-cap shares, while it was slightly underweight when it came to small- and mid-cap stocks. It also saw an 18% weightage for India on the MSCI Emerging Markets Index, and observed that it will increase foreign investment inflows.
Investors are now focusing on sectors such as defence, railways and infrastructure in the light of a double digit budgetary increase in capex by the governmen.
Kotak AMC identified higher inflation as a primary concern across the world, and added that India's rate cut cycle won't begin before the US Federal Reserve's.
It also recommended significantly lowering India's trade deficit by reducing imports from China.
