Raamdeo Agrawal Urges SIP Investors to Stay Strong Amid Market Corrections: A Golden Opportunity

Raamdeo Agrawal from the Motilal Oswal Group has a clear message for SIP (Systematic Investment Plan) investors: ensure that every monthly SIP installment is credited to mutual funds. He emphasizes this especially during market corrections, suggesting that this is a golden period for investors to continue their SIPs.

Agrawal points out that many new investors, who started after the COVID-19 pandemic, might be shaken by a 7% market drop. However, he believes this is an important time to keep investing. By doing so, investors can take advantage of cost averaging, which helps improve their average purchase price by buying more units when prices are low. This strategy is beneficial because it helps balance out the cost of units bought when the market was higher. He also recommends starting additional SIPs if the market corrects further, but stresses the importance of not stopping any ongoing SIPs.

Switching focus to public sector undertakings (PSUs), Agrawal notes that the market tends to group all PSUs together, whether they are in banking, metals, defense, or railways. He argues that this collective view should change and PSUs should be judged individually based on their own merits. The market’s tendency to categorize companies into public and private sectors affects stock selection, causing all to rise or fall together. Agrawal believes it’s time to break this myth and evaluate each public sector company on its own performance.

Discussing outward-looking sectors like pharma and IT, Agrawal observes that while inward-looking sectors (excluding consumption) have done well recently, companies that are profitable will continue to attract investment regardless of market trends. He does not foresee significant changes in business trends due to slight shifts in political power, as long as the broader mandate remains stable.

For the market to regain momentum, Agrawal highlights the importance of political stability, which the world is closely monitoring. He believes that once the political noise settles, market dynamics will again focus on corporate earnings. He remains optimistic, noting that if the current government maintains economic momentum and achieves projected earnings growth of 15-18% next year, the market should perform well going forward.