Khemka said he remains almost fully invested in equities, both in client portfolios and his personal portfolio. He explained that concerns over high oil prices and elevated US bond yields are not new, and markets have faced similar challenges in the past.
Khemka said it is difficult to predict whether the Indian or global markets have reached a bottom or could fall further. According to him, the concerns currently weighing on equities are already reflected to some extent in market prices.
He cautioned against making investment decisions based on predictions about the next market low. Instead, he believes investors should focus on the opportunities available at current valuations and maintain a long-term perspective.
Khemka said WhiteOak Capital remains comfortable investing across all market capitalisation segments. While large-cap stocks have underperformed mid- and small-cap stocks over certain periods, he does not believe investors should avoid the broader market.
He favours a well-balanced portfolio with exposure to large-, mid- and small-cap companies. In his view, even when a particular market-cap segment appears expensive overall, there can still be individual stocks trading at attractive valuations.
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Small- and mid-cap stocks can offer greater opportunities for stock selection because these segments tend to have more pricing inefficiencies. Khemka believes the potential for generating returns through careful stock selection can outweigh the broader performance of the segment.
Discussing his own portfolio preferences, he said he is more inclined towards mid- and small-cap stocks, along with multi-cap and flexi-cap funds. However, he stressed that portfolio allocation should depend on an investor’s risk appetite.Khemka said his portfolios have historically held around 40% in mid- and small-cap stocks combined. This allocation has generally ranged between 30% and 50% over the past two decades. At present, the combined exposure is around 40%, broadly in line with the long-term average.
Khemka also expressed a positive view on the continued activity in India’s primary market. He believes IPOs provide companies with access to capital, help entrepreneurs raise funds and contribute to the broader development of the economy.
While investors need to be selective, he said the growing number of companies accessing the capital markets is a positive development. WhiteOak’s experience, according to Khemka, has reinforced the importance of identifying the right businesses rather than judging the entire IPO market as a whole.
He also pointed to the role of vibrant capital markets in supporting entrepreneurship and economic growth. India’s expanding access to capital, he said, could remain an important factor in long-term wealth creation.
For the entire discussion, watch the accompanying video
