Although the Indian stock market saw significant selling by foreign institutional investors in 2022, it still outperformed its global peers. According to Kunal Kapoor, Chief Executive Officer of Morningstar Inc, this presents an opportunity.
Kapoor said Indian equity markets are not looking attractive when analysts look to other parts of the world where valuations have “collapsed”.
According to Kapoor, Indian investors’ ability to invest in overseas markets has declined significantly. “This is a good point to start thinking about taking some of your profits locally and investing in some markets that have underperformed outside of India.”
Indian investors can buy shares overseas either directly through the Liberalized Remittance Scheme or through the Indian asset management companies investing on their behalf.
However, the Securities and Exchange Board of India has asked the Association of Mutual Funds in India to restrict inflows into such funds after the industry nearly broke the limit on outbound investments set by the Reserve Bank of India.
Speaking of the influx of young investors into the stock markets in India, Kapoor said technology and the democratization of information would improve access to financial markets.
But they also make it easier to make mistakes, Kapoor said, adding that it’s important to have a simple approach to investing. He said competence and convenience are important when investing.
“Sometimes you don’t have to have the next best thing. You don’t have to have what your neighbor has,” he said. “But if you get a good night’s sleep, that’s really priceless.”
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