Sunday, January 08, 2023
Welcome to The Weekly, where our team shares a few thoughts to take you into the week. This week’s thoughts have been brought to you by Sagar Lele, Founder of Rupeeting. He also manages the All-Weather portfolios.
Dynamic Allocation for 2023?
With so much up for change in 2023, from an investor’s standpoint, a dynamic allocation looks like the best way to navigate through the year.
Every asset class seems to be going through a bit of a flux, which will provide opportunities for 2023, with timing being quite critical.
- Domestic Equities - While high valuations and potential risks (macro and earnings) don't seem to be making equities too attractive at the moment, there is enough reason to believe sharp dips and high volatility will continue, giving great opportunities for buying
- Domestic Debt - The fate for debt will change sometime in the year when interest rates either plateau or reverse. With yields much higher now, compared to last year, long term debt will be a money-maker in the year
- Commodities - While inflation has shown signs of peaking, commodity prices are in for a lot of volatility driven by downward pressure from the global economic slowdown, and upward pressure from China’s potential comeback
- Gold - Gold makes a case for a continued rise as risk aversion continues to envelop decision making for global investors
- International Equities - While a third of the world is staring at a recession, we would be skeptical of developed market equities for now. But, perhaps China is an interesting buy given its COVID-horror and parallel commitment to revive the economy
By, the way, our views on dynamic allocation and outlook for domestic equities and debt got quoted in The Economic Times!
Here’s a link to the article: https://economictimes.indiatimes.com/markets/stocks/news/amid-recession-geopolitical-concerns-these-4-themes-can-play-out-in-2023/articleshow/96698600.cms
Idea - Top Picks for 2023 📍
2022 barely moved the index, with a 3% gain on the Nifty 50, but our portfolios housed some hard gainers like Bharat Dynamics (+141%), Varun Beverages (+127%) and Hindustan Aeronautics (+106%), keeping our portfolios afloat.
Here is what we see shining in the spotlight of the year to come:
- IDFC First Bank