asset allocation: focus on asset allocation in the second half of 2022; inflation data to stimulate markets: Kunal Valia

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“We take a disciplined approach when building portfolios. As part of the discipline, asset allocation is the starting point of any wealth creation journey,” says Kunal ValiaDirector of Investments – Listed Participations, Waterfield Advisors.

In an interview with ETMarkets, Valia said, “When deploying, a time-phased approach helps ride volatility and deliver better risk-adjusted returns,” edited excerpts:



The Indian market hit a fresh 52-week low in line with US markets following the US Fed’s rate decision. Time to get cautious or buy fear?
Market corrections provide an opportunity for long-term investors to build wealth.

The current correction has been broad based across large, mid and small caps, and broad dislocations can be seen across sectors and companies.

Investors can use a combination of stocks, indices and active managers to gain equity exposure

We will complete the 6 months of 2022 and it has been a volatile journey for investors. What is your outlook for the markets for the rest of the year? Will we hit 14K first and then bounce back?
Indian stock markets corrected; however, the market has been relatively more resilient compared to equity markets in the US or China.

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Markets will likely be data driven as high inflation continues to cloud consumer and business sentiment. Global central banks are under pressure to control inflation anyway, leading to bigger and faster rate hikes.

Over time, rate hikes coupled with quantitative tightening can have an impact on inflation.

All the positive news is circulating about the situation between Russia and Ukraine and the cooling of commodities, especially oil, can contribute to positive sentiment and flows into equities globally.

Sector-wise, the real estate and IT sectors have fallen more than 20% so far in 2022 – what is weighing on these sectors, and will the weakness continue? to chase ? Top-tier stocks worth buying?
The domestic IT sector had seen strong growth in 2020 and 2021 and some reversal was likely given valuation. In addition, the domestic IT sector has seen shrinking margins and high attrition.

The sell-off was accentuated by the sharp drop in the Nasdaq – an index with a strong technological component. The sector after almost 30% at CYTD could find a plateau and offers a strong opportunity for investors.

The rapid rise in interest rates is having a big impact on the real estate sector, as the current EMI is revised upwards and the cost of loans for new borrowers increases.

If someone is planning to invest Rs 10 lakh in the second half of 2022, what should be the ideal investment strategy?
At Waterfield, we take a disciplined approach when building portfolios. As part of the discipline, asset allocation is the starting point of any wealth creation journey.

When deploying, a laddered approach helps ride volatility and deliver better risk-adjusted returns.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts belong to them. These do not represent the views of Economic Times)

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