Sunil Singhania, CIO of Reliance Mutual Fund is, like his illustrious predecessor, Madhusudan Kela, permanently optimistic about the Indian economy and the stock market.
This optimism has held the duo in good stead because the stock market has given several wealth creation opportunities over the years. In fact, the astonishing fact is that if you would have just blindly bought the Index, your money would have multiplied at least 100 times over the past several years.
Sunil Singhania’s latest article in the ET (Massive wealth creation opportunity for investors in next 6 years) makes for inspiring reading.
In that he advises investors to “look at the big picture” and not get bogged down by short-term challenges. The “big picture” according to him is that India’s GDP will be at $4-trillion in a few years, notwithstanding short-term niggles like “monsoon, Greece, interest rates” etc.
Sunil emphasizes that India is like an unstoppable juggernaut, heading towards a phase of faster economic growth. India is already the ninth largest economy in the world and its economy will likely double in the next 7 years to $4 trillion, assuming a conservative nominal GDP growth rate of 12 per cent. As per IMF, India will be the fifth country to cross the $4-trillion mark by FY22.
This rapid growth in the economy, coupled with favourable demographics and rising productivity levels, will create an opportunity of creating wealth of 1.5 times of total current market capitalisation, Sunil Singhania adds.
He also points out that domestic investors are getting disillusioned from their favourite investment avenues, i.e. real estate and gold, owing to muted returns and regulatory hassles. So, the demand from domestic investors for equity could rise substantially in the next 3 -5 years, he says.
The bottom line of Sunil Singhania’s advice is that we must utilize the present correction in the market to aggressively buy stocks of top-quality companies and hold on to them tightly without getting nervous about short-term tremors.