Retail investors should stay away from any kind of leverage and ensure they hold at least 25 per cent cash in their portfolios to buy more if the markets were to correct a further 10 per cent. True Beacon, our flagship fund, has significantly outperformed the market benchmark and our peers due to our propriety strategy. Volatility for all-weather funds like ours has been an opportunity.
The economic fallout of Covid-19 is yet to be analysed but it will have a significant impact on India Inc's earnings in the March quarter as well as in financial year 2020-21 (FY21). However, the impact will vary for different companies. For example, airline companies such as IndiGo and SpiceJet are expected to post disappointing numbers as many countries have advised their citizens not to travel and some of them have ordered a complete lockdown to contain the spread of the virus. Other companies, including consumption, will show an impact in the subsequent quarters.
Overall, we believe FY21 earnings will be impacted by 15-20 per cent due to Covid-19 outbreak. That’s just an estimate though, if we fall on the lines of some European countries which are predicting that 70 per cent of their countries might get infected, the impact could be significantly larger.
Nikhil Kamath is co-founder and chief investment officer (CIO) at True Beacon and Zerodha
(As told to Swati Verma)