Smallcaps with double-digit returns turned multibaggers in Q1 2024, led by Waaree Renewable Technologies and Diamond Power Infrastructure. Despite caution due to SEBI warnings, experts like Rishabh Goel and Varun Saboo remain optimistic about smallcaps earnings growth potential.
Stock market today: Sensex closed the day with a gain of 351 points, or 0.47 per cent, at 74,227.63 while the Nifty 50 ended the day at 22,514.65, up 80 points, or 0.36 per cent.
Knowing what is risky and managing those risks are two different things. Knowing risk is easy, but managing the risk is more complicated than it appears. If one has not learnt this lesson in the month of March, then probably he or she needs to seriously think about whether they should invest in stocks or not. At the start of March it was well known that valuations are high so it is risky to invest in small caps. But when the fall happened, how many were able to manage the risk of investing in small caps by hedging with selling nifty futures or any other way. Probably, not many. The fact is that the old theory of taking a short position in nifty futures or buy put options to hedge your portfolio works in large caps that too only if your portfolio selects large caps. In case of small caps, the only way to manage risk is to avoid the risk by not buying bad quality stocks which are flying high due to a narrative on the street.
Rahul Sharma suggests focusing on largecaps for alpha generation, while considering smallcaps and midcaps at discounted prices. Nifty s positive trend and sector leaders performance support an optimistic outlook for FY25. Sharma says: "As we have seen in the past, corrections have been bought into and this time also, it does not seem any different."