Thanks Nithin. I was also invested in Laurus labs back then in 2020 but exited after stock went up 3 times and booked profits. This is why I believe how much strong conviction is, sector + stock allocation matters. Portfolio should be diversified specially when the portfolio is young. I was heavily invested into financials since I saw the recovery happening after covid but have recently reduced sector allocation since the same is linked to Nifty and is high beta. I understand that pharma, chemicals, financials, IT all are good sectors for India but sector rotation happens a lot in the market because no sector is immune. See what is happening in chemicals. Pharma also you have pointed the risks. Market likes certainty of cash flows which is why financials have 40% weightage in Nifty because there is no shortfall of growth or business for efficiently run banks.
However, strong individual company is headwinds keep on coming in the sector. For eg: You might think of increasing allocation to reasonably priced engineering, pumps, capital goods companies. I believe, this can give immunity to the portfolio to some extent and we can get to experience growth across sectors. Objective is making continous CAGR instead of waiting for stocks to perform in a specific sector. This is my outlook. Opinions can be different.
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