Budget 2024: Create positions on large cap, real estate related companies, says Sheersham Gupta of Rupeezy

Budget 2024: believes keeping the elections in mind, one can expect a populist budget. In an interview with MintGenie, he advised investors to create a position in the agriculture, infra, and real estate sectors. One can look to book some profit in small cap and mid cap space and create positions on the large cap, real estate related companies, and debt, he added.

Edited Excerpts: What should investors expect from this upcoming budget? Keeping the elections in mind, we can expect a populist budget. So sectors like agriculture, infrastructure, and consumption would be in focus. Investors should also expect a spotlight on real estate with expectations of policy impetus, tax breaks, and GST rationalisation.

Investors may witness targeted initiatives aimed at revitalising the agriculture sector. Which sectors are likely to be in focus around the budget? Focus shines on affordable housing within the real estate domain positioning it as a pivotal element of economic growth. The real estate sector vying for industry status could influence related industries positively.

Agriculture and infrastructure, notably ports, airports, railways, and highways, are expected to be a priority in this budget. How should investors prepare portfolios for the budget? In anticipation of a populist budget, one can look to create a position in the agriculture, infra, and real estate sectors.

Now, for the plan, one can look to book some profit in small cap and mid cap space and create positions on the large caps, real estate related companies, and debt. This should align the portfolio with evolving market dynamics. Overall, do you see strong volatility or a continued upward trend in the Indian market performance in 2024? Volatility is an inherent and inseparable aspect of the stock market.

However, 2024 being the year of general elections, the market may see heightened volatility especially till the exit polls are out. It is also a year when investors are expecting rate cuts globally and that may cause intermittent volatility. However, this scenario is poised to be a catalyst for a robust uptrend in the Indian market, with investors foreseeing sustained growth.

Do you believe valuations are expensive or is the time right to invest? In fact, the valuations are not expensive. If one sees the average P/E ratio of Nifty from 2018, it is 26. The present P/E ratio of Nifty is 23.2 meaning that there is still scope for P/E expansion. Last year, a few sectors like PSU and reality witnessed a superb trend.

But that was also reflected in their order books or earnings. 2024 would be a very good year to invest as rate cuts are expected this year. A few sectors like IT, metals, and materials are available at very attractive valuations. With general elections in mind, which asset classes apart from equities should investors focus on? It is always advisable to have a diversified portfolio irrespective of any event happening.

Investors can also look for thematic index funds and ETFs to balance out volatility and shocks arising from equities. Besides these, investors should also consider allocating funds to fixed income securities for stability, as government bonds may respond to policy changes. Key trends that one should look out for in 2024? Sector rotation would be a key phenomenon happening this year as rate cuts are expected.

The sectors that tend to perform well in a low interest regime like IT and chemicals will witness outperformance. Monetary policy and economic data announcements are likely to induce volatility as these events will decide the future trajectory of the market. What are your views on midcaps and smallcaps? Will the rally continue this year as well? With retail participation at an all time high, the rally in the midcaps and the smallcaps is expected to continue this year as well.

This space is poised for growth, driven by supportive government policies and macroeconomic tailwinds. Notably, industries such as paper, sugar, and textiles, which lack large cap presence, are experiencing renewed attention. How about FPIs? Will the inflows continue or are there risks that might push them away? We can anticipate sustained inflows of foreign portfolio investments (FPIs) into Indian markets for two key reasons.

First, rate cuts are expected this year so FPIs will have more funds to invest. Second, the Indian economy is set to outshine other larger economies. One piece of advice for new investors? For new investors, my advice is to embrace Systematic Investment Plans as the best investment approach, avoiding the temptation to time the market.

Prioritise long term goals over short term gains with a patient mindset. Investors must include debt instruments in their portfolios to mitigate volatility. This strategy will provide steady growth and shield against market uncertainties. Livemint tops charts as the fastest growing news website in the world to know more.

Unlock a world of Benefits! From insightful newsletters to real time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away!.