Investors Should Consider Booking Profits Amid Uncertainty, Says First Global’s Devina Mehra

In the face of uncertainties like the U.S. election results, India-China border tensions and the progressing Covid-19 pandemic, smaller investors are likely to be better off by booking whatever gains they have made over the last few months.

That’s according to Devina Mehra, director and chief investment strategist at First Global. She advises investors to be cautious in both Indian and U.S. markets.

I always say is that the first thing in investment is risk management. First you have to protect your capital before you can talk of growing your capital.

Devina Mehra, Chief Investment Strategist, First Global

Citing the ‘The Loser’s Game’ published in 1985, Mehra said the stock market was once a winner’s game where multi-baggers or stocks that returned multifold gains were in abundance and information wasn’t readily available. “Only a few people were in the market, so you could find gems that no one else could,” Mehra told BloombergQuint’s Niraj Shah in an interview. “[But] now that can't be the entire part of your strategy because there are a lot of smart people in the market.”

First Global delivered nearly 22% return on its India PMS Fund in the first nine months of 2020 compared to a 1.5% fall in the Nifty 50 Index. Known for investing in Amazon.com Inc. in 2001 and Apple Inc. in 2002, the firm’s global funds have also given more than 25% returns in 2020 as of September.

Time To Reallocate

“Whether you choose to be in Indian equities or debt or U.S. equities or debt will determine your return more than the kind of stock you choose,” Mehra said. During uncertain times like now, investors may be better off by reallocating into government securities, global markets and even commodities such as gold, she said. Even holding cash, according to her, is an option.

Both gold and government securities in India offered a higher return than equities in 2019, yet equities and individual stocks dominate most investment conversations, she said.

Watch the full conversation here: