Rely on critical filters and rules

The current market is characterised by volatility, negative sentiment and dark clouds. Crude, a critical factor of the fisc, is above comfort level, threatening to impact India’s current account deficit and the currency. Liquidity is tightening with capital outflows. Therefore, one should not be aggressive to jump in but be cautious. However, a correction of more than 10 per cent in an established secular bullish trend is a call for long-term investors to come in. Hence, those with a long-term investment horizon can now look at investing, as the moment is ripe, while it’s a clear no for short-term traders as volatility is a wild horse, feels Mustafa Nadeem, chief executive officer, Epic Research.

Nadeem, a veteran in the financial services industry with a successful run at Reliance Capital and entrepreneurial experiences in Trifid Corporation--a professional investment and trading advisory firm--thinks that an investor should have a specific financial goal and a time duration, as these are distinctly measurable. Risk is an intangible factor that runs through all this.

Also, an investor  can make own investment decision looking at the market scenario, that is, by figuring out whether it is a tightening environment or a liquidity expansion phase. This can give a broad picture to the investor, more than any broker or colleague. Moreover, keep in mind that a stock should have an inherent value of its own.

Nadeem, who is also a visiting faculty for portfolio management and security analysis at management institutes, is responsible for setting and driving the overall vision and business objectives of the company. His market insights, understanding of financial markets and acumen have been instrumental in establishing Epic Research as a customer-centric reliable financial services brand.

Investment strategy

Hundreds of attractive-looking stocks are out but deciding which one to buy is a function of applying very critical filters and rules. With such tools, one can bring down the count to a handful. So, a basic requirement is that one must have a clear set of rules to identify the stocks. “We look for performers and the focus is on outperformers, so when there is a clear trend, as has been in the last few years in the Indian equity market, one must identify the potential performers which are not just holding value to move in a bull market but also carries the strength to extend it.”

Top picks:

The current top picks of Nadeem are: Ashok Leyland, Yes Bank, Mahindra & Mahindra Finance, Ramkrishna Forgings and DLF, among others.