Not every investor has the ability to take Risk and even among those who can, the appetite is often limited.
Volatility during 2026 was anticipated by many of us at and geo-political risks hung like a sword over equity markets worldwide. But, while a flare-up in any of the geo-political hotspots including Israel and Iran was not unexpected, what has surprised many market participants is that Iran has been able to hold out and frustrate the US-Israel alliance thus far in the ongoing war, especially by using the Strait of Hormuz strategically.
The resultant decline in Indian equity market indices seems largely triggered by the Foreign Institutional Investors (FIIs) exiting anticipating a slowdown in growth in India owing to its being a very big oil importer. The FII selling has been a double whammy as it has also beaten down the Indian currency versus the US dollar. Clearly the FIIs have exited expecting the market to cool off and factoring in the worst-case scenarios that could play out in India.But, what happens if that scenario does not play out and the inevitable damage is lesser than anticipated? There is a flicker of hope that UAE’s exit from OPEC might benefit India in terms of uninterrupted oil supplies via its Fujairah port.
One is clutching at straws perhaps but once the dust settles, will those FIIs be back and will that trigger a sharp surge in the Indian indices? Time alone can tell, though if I were a betting man, that is where my money would be. When that will happen, is the tougher question to answer.
A few of our HNI patrons hail from semi-rural areas across India and what they lack in terms of educational ‘labels’, they more than makeup with their lateral thinking ability to sense a killing whenever the opportunity presents itself. A couple of them always surprise us by simply asking to invest fairly large sums via the Lump-Sum route, sans any queries on the state of and outlook for the equity market.
As a matter of abundant caution and professional compliance, our team did explain the pros and cons of making lump-sum investments and that too in a market whose direction appears unclear and uncertain in the near term.
Well, their line of thinking was simple. The investments they were making were was with the time frame of a decade in hand and they were confident that the returns would be handsome. Given that kind of clarity of thought, there was little left to debate.
Call their line of thinking what you may, but one thing I have learn from being an investor for over three and a half decades is that it is the ability to ride risks and with immense patience, that separates ‘few winners’ from the ‘many also rans’ in any equity market.
(Ashok Kumar head LKW India and can be contacted at ceolotus@hotmail.comThe views expressed here are his personal views)