Young investors should invest and not speculate, says Nimesh Shah, managing director and CEO of ICICI Prudential AMC.
There are too many people getting into futures and options these days, Shah told BQ Prime’s Niraj Shah. Many people start to believe they are experts when their calls go well and they make money within the first two years, he said. Shah warned young investors to “beware of this intoxication that you are always right”.
Instead, he advised them to invest in mutual funds. « At the end of the day, it’s up to each person to decide which brand to trust. But I look at the person myself, I make a judgment about the person and I invest with them, » he said.
According to him, for an investor like him, who can bear the volatility and won’t worry if the portfolio falls by 20%, he would suggest a purely equity scheme – a large cap or flex cap fund, as it gives the manager has the choice of investing in large or mid-caps.
A person who cannot bear volatility is better off investing in an ICICI Prudential Balanced Advantage Fund or an ICICI Prudential Multi Asset Fund, Shah said. The Balanced Advantage Fund « will give you an allocation to stocks, an allocation to debt and an allocation to gold as well », while a multi-asset fund will allocate across all three asset classes, he said .
