From The Economic Times · Nikhil Agarwal · · 2m
Samco CEO Jimet Modi's five-way portfolio formula
Samco CEO Jimet Modi recommends 20% each in largecaps, midcaps, smallcaps, gold and global equities for a balanced portfolio during market correction.
In brief
Samco CEO Jimet Modi recommends 20% each in largecaps, midcaps, smallcaps, gold and global equities for a balanced portfolio during market correction. Samco CEO Jimet Modi advises investors to allocate 20% each to largecaps, midcaps, smallcaps, gold, and global equities to manage risk during market corrections…
Market correction advice
Samco CEO Jimet Modi recommends a 20% allocation to largecaps, midcaps, smallcaps, gold, and global equities for balanced risk management.
Market correction timeline
Modi expects the market to remain range-bound for 10 to 12 months without a bull or bear market.
Largecap challenges
Largecaps lack growth drivers and are cash flow engines, not innovation engines, according to Modi.
Smallcap opportunity
Modi is bullish on smallcaps over the long term but warns against short-term chasing.
Gold investment
Gold is seen as a hedge against geopolitical instability and currency devaluation.
AI trade concerns
Modi states India is not a priority market for anti-AI trade hedging, unlike Brazil.
Sector outlook
Modi highlights industrial products, metals, and defense as sectors with long-term growth potential.
Traditional sectors
Modi is not bullish on traditional sectors like IT, autos, or banks due to lack of transformation.
Gold valuation
Gold has corrected 20 to 25% from peak levels, with current price around $4,200.
Portfolio strategy
Modi advises against concentration in smallcaps and emphasizes diversification across asset classes.
Long-term outlook
Modi expects smallcaps to create disproportionate wealth over 8 to 10 years compared to largecaps.
Market correction risks
Modi warns against overexposure to smallcaps and the risks of crowding in the market.
AI trade analysis
Modi states the AI trade is not a bubble, with current valuations sub-30 times earnings versus dot-com peak of 60-80 times.
Gold as diversifier
Modi recommends gold as a diversifier, not a core allocation, with 20% being optimal for risk management.
Sector rotation
Modi suggests industrial products, metals, and defense as sectors to target on market dips for long-term gains.
Market correction conclusion
Modi advises a balanced portfolio with 20% in each asset class to navigate the prolonged market correction.
The main idea
Samco CEO Jimet Modi advises investors to allocate 20% each to largecaps, midcaps, smallcaps, gold, and global equities to manage risk during market corrections.
