In recent years, the stock market has shown significant volatility. As a result, many investors who invested in mutual funds and stocks have received reduced or insufficient profits. In this situation, Rajiv Thakkar, Chief Investment Officer of PPFAS Asset Management, gave investors some advice.
He noted that investors who prefer stability, similar to fixed deposit accounts, should reconsider their expectations regarding equity investments. According to him, returns from stocks are always accompanied by instability, and investors cannot count on high profits while ignoring periods of uncertainty and low performance.
Thakkar expressed concern over the weak performance of stocks recently, stating that the only way to achieve guaranteed returns is to open a bank deposit (FD). This statement highlights the difference between deposit investors and market investors. In the case of a bank deposit, a fixed return is provided for a predetermined period according to the terms of the deposit. Conversely, equity investments do not offer guaranteed returns; their results depend on numerous factors such as business performance, valuation, economic conditions, investor sentiment, and overall market volatility.
In Thakkar's opinion, the advantage of equity investments over fixed deposits lies in the potential for higher returns. He believes that to achieve high long-term profits, investors must accept this instability. Therefore, periods of market weakness, stable volatility, and correction do not mean that stock investments are ineffective.
This contrast becomes particularly evident when investors compare recent stock returns with deposit interest rates. While a deposit holder knows in advance the interest rate applied to the deposit, a stock investor does not know in advance what return they will receive in the future.
Thakkar's statement came amid investor concerns about the recent performance of the Parag Parikh Flexi Cap Fund, as well as in light of high valuations in some market sectors and the fund's allocation to cash assets, including its stake in HDFC Bank.
He stated that the current performance of the fund is neither unusual nor sufficient grounds to change the fund's long-term investment policy. The fund's cash holding, which peaked at about 25% during the 2024 market boom, has decreased to approximately 14-15% due to weakening valuations. Thakkar hopes that the proportion will decrease further as more attractive opportunities emerge.
Regarding HDFC Bank, PPFAS has maintained its position in the portfolio of four private banks. Thakkar added that the issues recently encountered by the bank do not correspond to previous large-scale fraud or administrative failures. The fund views the downturn in IT services stocks as an opportunity and provides a chance to companies from various sectors, not just those developing AI models.



