Deven Mehta’s Expert Strategy: A Balanced Portfolio for 2024 – Allocating 50% in Largecap, 30% in Midcap, and 20% in Smallcap Stocks
Arpit Jain’s Proven Formula: Unveiling the Investment Strategy for 20-30 Year-Olds with Moderate Risk Appetite – Allocating 60% in Large Cap and 40% in Midcap/Small Cap Stocks
Jefferies is cautioning that the Nifty Midcap100 index’s relatively high valuation, especially compared to its historical average and the broader market, could pose a risk for smallcap and midcap stocks within this index, potentially leading to a significant downward correction in prices. Investors may interpret this information as a signal to carefully assess their holdings and consider the potential risks associated with the current valuation levels.
Arpit Jain, Joint MD at Arihant Capital Markets, advocates a portfolio allocation strategy for individuals in their 20-30 years with a moderate risk appetite. He recommends investing 60% in large-cap stocks and the remaining 40% in midcap and small-cap stocks. This strategy aims to balance stability and growth potential, providing an opportunity for high returns while maintaining a moderate level of risk.
Arpit Jain emphasizes that as a young investor, there’s room to assume a slightly higher level of risk. By allocating 60% of the investment portfolio to large-cap stocks, he believes investors can create a safety net or cushion. This safety net allows investors to comfortably take on some risk by allocating the remaining 40% to high-growth companies, particularly in the midcap and small-cap segments.
Deven Mehta, Equity Research Analyst at Choice Broking, suggests a strategic allocation strategy for investors aged 20-30 years with a moderate risk appetite. According to Mehta:
This allocation strategy seems to strike a balance between stability and growth, catering to the risk appetite of young investors. Here’s a breakdown:
Deven Mehta, Equity Research Analyst at Choice Broking, suggests a strategic allocation for investors aged 20-30 with a moderate risk appetite in 2024. He recommends investing 50% in large-cap stocks, 30% in midcap stocks, and allocating the remaining 20% in small-cap stocks. This allocation is based on the performance trends observed in 2023, where midcap and smallcap stocks showed remarkable returns. Mehta believes that, at present, the risk-reward ratio appears more favorable for large-cap stocks.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, anticipates that large-cap and mega-cap shares will likely outperform midcap and smallcap stocks in 2024. He expresses the view that the earnings growth of midcap companies is expected to be superior to that of smallcaps. Chouhan notes that smallcap stocks appear to be the most expensive in comparison to their earnings growth potential.
In terms of his investment strategy, Chouhan outlines a mandate to invest a minimum of 50% in large caps, 30% in midcaps, and 20% in small caps. Importantly, he states that this allocation remains consistent irrespective of market conditions. The goal of this strategy is to generate optimal returns by maintaining a diversified portfolio across different market capitalizations.
Tanvi Kanchan, Head of Corporate Strategy at Anand Rathi Shares and Stock Brokers, highlights that an asset allocation strategy with a well-diversified portfolio is crucial for managing risk and minimizing deviation from expected outcomes. This approach involves spreading investments across various asset classes, contributing to stability and effective risk management.
Tanvi Kanchan, Head of Corporate Strategy at Anand Rathi Shares and Stock Brokers, emphasizes the variability in risk tolerance among investors and the importance of understanding the overall risk associated with an asset allocation strategy. For a moderate investor with a long-term perspective, Kanchan suggests allocating 50% to large-cap, 20% to midcap, and the remaining 30% to small-cap stocks. This allocation aims to balance stability, growth potential, and higher-risk opportunities.
Sunil Nyati, Managing Director at Swastika Investmart, notes that large-cap stocks are gaining momentum after a recent period of underperformance. He highlights this as a promising opportunity for investors, especially if there’s an increase in foreign institutional investments in the domestic market.
Sunil Nyati, Managing Director at Swastika Investmart, recommends a balanced portfolio allocation strategy. He suggests maintaining a 50% allocation in large-cap stocks to capitalize on potential positive shifts. Simultaneously, Nyati highlights opportunities in midcap and smallcap stocks, particularly considering expected political stability, potential interest rate cuts, and robust economic growth. To ensure a diversified portfolio, he recommends allocating 30% to midcap stocks.
Sunil Nyati, Managing Director at Swastika Investmart, further recommends a diversified approach by allocating 20% to small-cap stocks. This complements the overall strategy, providing investors with the potential to tap into emerging opportunities in the dynamic market environment.
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