For long-term investment success, Sankaran Naren of ICICI Prudential AMC highlights the key tactics of temperament, judgment, and market timing
Sankaran Naren, executive director and chief investment officer (CIO) of ICICI Prudential AMC, shared valuable insights on successful investing at the 40After40 Retirement Expo in Mumbai. He underlined that temperament is frequently more important than knowledge when it comes to equity investing.
Naren said, “The biggest lesson I’ve learned in equity investing over the years is that temperament matters more than knowledge.” He also referred to Warren Buffett’s philosophy, where Buffett points out that having the highest IQ doesn’t guarantee success in investing.
He said that emotional control during market turmoil, such as the 2008 Lehman crash or the 2020 Covid-19 crisis, is key to long-term success. Better investing requires maintaining composure in adverse situations instead of acting impulsively.
He also suggested having an investment journal to enhance decision-making. He said that investors write down the rationale behind making a particular investment, either from personal research or through outside counsel. By reading these records over time, they are able to grasp what worked and what did not, therefore eliminating impulsive behaviour and enriching their future decisions.
When it came to market strategy, Naren emphasised the importance of knowing when to protect gains and when to focus on growth. With strong returns from equities and real estate, the current priority should be protecting profits. He cautioned against investing in priced-out mid- and small-cap stocks and recommended large-cap, flexi-cap, and hybrid funds for superior value. Naren suggested a diversified asset allocation plan while taking into account new tax rules in planning investments to successfully navigate the prevailing market scenario.
Watch the full video for more insights.