When it comes to the word “ largecap” a large part of the street still associates it with stocks which form part of Nifty or others which remain in news very often. But there are not so well known largecap names which have outperformed the markets both in bearish and bullish phases. The only common thread is the track record of business going through both good and bad phases and still being able to stand out. As bulls make a comeback, these stocks may get more attention and when bears come they may be able to hold their ground better.
Last Thursday, when everything appeared fine, there was a sudden decline in the Nifty, a drop of more than 200 points in less than 5 mins. There was never and never will be, dearth of explanation of every move of the markets. So, the blame this time was put on basket selling and possible attack by Israel on Iran. Explanations aside, volatility is part of the market and will remain. The only two things one should do, look at how the market breadth has panned out during the volatile phase. Second, stocks, which may be volatile in the short term but the companies are good when it comes to fundamentals. During this volatile phase, it was large cap and more particularly index stocks which led the down move. The fact is that the first phase of volatility is always led by large caps as they have high institutional holdings. But over the long term, they tend to outperform and the drawdown is lower as compared to mid and small caps. So, at times large caps might optically appear to be hammere
In a fortnight where smallcaps were the worst performers and large investors are counting on how much losses their smallcap portfolio have incurred. There are still some die-hard small fans who would be looking to invest in small caps and there is nothing wrong in investing in small caps even in mayhem if one is sure of holding it for the next three to five years. The only thing that needs to be ensured is that one should understand that there is a difference between a good business and a bad business even in the small, mid and largecap segments. There is a difference in the absolute value of the stock and the value of the company. There are some businesses that will remain small but are so niche that they will still make wealth for you if you hold them for some time. But if your definition of smallcap stocks is a stock that is quoting at below Rs 20 or an X amount and the reason you want to buy that stock is because you are hoping your money will grow by ten times, then forget small,
According to Rajesh Cheruvu, the rural economy is expected to revive in FY2025, with a focus on mid- and smallcap stocks and sectors catering to rural consumption. The market mood is positive, with a rise in SIP contributions and a flurry of NFOs. Investors could look at managers with robust research processes and reasonable fund manager bandwidth to consider allocations during NFOs.
"FPIs have withdrawn over US$ 17bn in CY2023. On a YTD CY2024, they have already invested US$15bn in India. Investments coming to India since international investors believe they can make better returns in India. On the macro front, India continues to be one of the fastest-growing major economies in the World for the 3rd year in row."