Devina Mehra's Stock-Picking Mantra: Diversify, Manage Risks, and Look Beyond India

Devina Mehra, managing director, chairperson, and founder of First Global, shared key investment principles on the last day of Outlook Money's 40After40 Retirement Expo. She stressed on diversification, good fundamentals, risk management, foreign investments, and a long-term approach for successful stock picking.

Mehra advised investors to spread portfolios outside the Indian market. She said that India accounts for less than 5 per cent of world market capitalisation and, therefore, it is not a good idea to keep most of the money at home. She also highlighted the rupee’s sharp fall over the years, urging one to consider global diversification while investing for the long term.

She said investment is less about making high returns and more about not losing money. Referring to a study, she said even a scheme that performed better in 93 per cent of market rallies may end up being one of the worst performers if it is unable to limit losses. She added that investors must always adopt a stop-loss policy in order to avoid heavy loss of capital.

Mehra emphasised being practical when choosing stocks, and with the knowledge that a few of them will always fall behind. She suggested making a portfolio of 25-30 or even more stocks in order to make good performers probable. In this type of portfolio, some of the stocks will flop, a few will perform decently, and some can be multi-baggers. She also specified her current sector favourites, which are auto parts, capital goods, and industrial machinery.