Ace Dalal Street like this 33-year-old Kanpur-based investor

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Investment in equity markets is all about spotting high-quality firms which can multiply your wealth over a period of time. Ekansh Mittal, a Kanpur-based investor, who came into the limelight after he made it to Forbes India’s 2015 edition of Wealth Wizards list at the age of just 27, is known for picking such multibaggers. Recently, his equity portfolio jumped 150% at the time when the benchmark equity index NSE Nifty rallied nearly 71% in FY21.

In an interview with Money9, Mittal shared insights on how investors can navigate the turbulence and factors they should keep in mind while trading. among other things.

Edited excerpts: 

Q: What would be your message to investors?

Ekansh: New investors made a healthy return in FY21. They should not extrapolate the return because FY21 was a one-off kind of year.

Q: What strategy should they opt considering the rising Covid-19 cases? 

Ekansh: Covid-19 cases are rising and unlike March 2020, this time the domestic equity market is around its new peak. At the same time, unlike March 2020, the lockdowns are localised, companies are better prepared and looking at the reducing trend of Covid-19 cases in Mumbai and opening up of vaccination, the situation may soon normalise. “I personally believe, the risk of a major correction in the markets is low, while something like 10-15% can’t be ruled out,” he said.

Q: What should be the duration of  investments? 

Ekansh: Equity is a 5-10 years investment product and an investor should prepare accordingly. Investors should focus on individual businesses, their valuations and ensure adequate diversification at the portfolio level. This will help to avoid clubbing of risks.

Q: When should an investor think about paring exposure?

Ekansh: It is necessary to evaluate how the portfolio companies will get impacted in terms of continuity of business operations or their ability to service their liabilities in the wake of a few weeks or months of disruption. If one foresees permanent damage to any of the two, then cutting down on exposure to such companies could help strengthen the portfolio.

Q: What is the secret behind timing the market?

Ekansh: Investors should not try to time entry and exits from the markets. We have always found being 70-75% to 90-95% invested more comfortable than 0-100%. Like currently, we are invested around 85-90%. This way, we have some cash buffer to deploy in case of a correction and at the same time don’t have the fear of missing out on returns in case of a further rise.