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Since March 2020 to now, SIPs made “serious money”, Bagga told BQ Prime in an interview on the sidelines of the Morningstar Investment Conference. “HNIs (high-net-worth investors) kept waiting for the second dip and that never happened,” he said, advising investors against timing the market that has remained “flattish” since September 2021.
HNIs, however, parked money in G-Secs that offer 7.4-8% returns as rates rise.
That comes as rising rates and geopolitical tensions have increased volatility in the market. Indian equity mutual fund managers hold cash worth over Rs 90,000 crore as of September, according to Morningstar data, because of the risk-off sentiment.
While foreign investors sold equities worth about Rs 20,000 crore in October, inflows from domestic investors have kept the market resilient, he said.
Bagga said valuations are “reasonable” despite concerns about froth. Once the dollar weakens again and rates peak, foreign investors will return to India, he said.
Bagga says he is always invested as the opportunity in the domestic market is huge. “By 2023, India will be a $6-7 trillion dollar economy.”
“For the last 30 years, I am always invested and the more the market goes down, I look to scrounge around and even take a loan and put (in),” he said.
“My generation is very fortunate,” he said, referring to how he has seen his first-year income go up 1,000 times and the equity market surge 100 times.
“I have stood in line to put money” into IPOs of banks and IT companies and “actually made 2,000-3,000 times returns,” he said. “We [my generation] are not afraid.”
Bagga, however, acknowledged that there is a bigger chance of going wrong for investors now.
The access has become so easy and options were opened to everybody, he said. “We never thought discount brokers would make Rs 2,000 crore profits and it used to be a very difficult business,” he said. “Every downturn, brokers would get wiped out because clients would not make good losses.”
This gamification of trading and investing is giving investors a kick and it is not good, according to Bagga. SEBI reports show that more than 95% of traders are losing money, he said.
Still, this is better than asymmetry of information, he said. But he advised brokers and market intermediaries should spend on investor education.
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