ETMarkets Smart Talk: Patience, discipline and consistent SIPs are the cornerstones of long-term wealth creation, says Ankur Punj

In the latest edition of ETMarkets Smart Talk, Ankur Punj, MD & Business Head at Equirus Wealth, emphasised that long-term wealth creation is built on patience, discipline, and the consistency of SIPs.

While short-term volatility and global uncertainties may influence market sentiment, Punj believes that a disciplined approach to asset allocation, regular portfolio rebalancing, and unwavering commitment to systematic investing can help investors stay on track toward their financial goals. Edited Excerpts –

Q) Will GST be the next big thing that D-Street is watching out which would dictate the market trend?

A) Yes, GST reforms will play a significant role in shaping near-to-medium-term market sentiment. The government’s move to simplify GST into just two slabs – 5% and 18% – with substantial reductions across sectors, is a game-changer.

This rationalisation has far-reaching consequences. Firstly, it directly boosts consumption by reducing prices of several goods and services.

Secondly, it creates room for stronger corporate earnings by lowering indirect tax burdens. Thirdly, such structural reforms improve compliance, increase tax buoyancy, and aid fiscal consolidation over time.

Economists estimate that GST reforms can lift GDP growth by around 0.2-0.3%. The multiplier effect on consumption, trade, and manufacturing should be visible.

The timing is also important, as these reforms coincide with the festive season, giving an immediate boost to demand and consumer sentiment.

Q) Which sectors/themes might emerge as winners from the next round of GST reforms?

A) Consumer-facing sectors are clearly the immediate beneficiaries. FMCG, consumer durables, and auto companies stand to gain as reduced tax incidence translates into better affordability and higher sales volumes. Retail and discretionary categories too could see traction.

However, markets rarely move on one factor alone. Global macro developments – whether around interest rates, oil prices, or geopolitics – will continue to influence overall investor sentiment.

Domestic triggers like GST reforms will provide support, but global cues remain equally important for the market’s direction

Q) It is heartening to see a steady rise in SIP contributions despite volatility in the markets. But when should investors balance their portfolio?
A) Systematic Investment Plans (SIPs) have become one of the most trusted investment routes for Indian households, and the robust inflows we are witnessing even during periods of market volatility clearly underline this confidence. It shows that investors today have developed a more mature approach toward long-term wealth creation.

That said, investors must not lose sight of portfolio discipline. Having an asset allocation framework is critical for ensuring better risk-adjusted returns.

Asset allocation determines more than 80% of portfolio performance in the long run, which is why it should be treated as the foundation of any investment strategy.

Rebalancing a portfolio is equally important because over time, different asset classes move at different speeds.

For example, equities may rally, pushing equity allocation far above the intended level, or debt may underperform, reducing its proportion. Left unchecked, this skews the portfolio and can lead to concentration risk.

Rebalancing ensures that the original allocation mix is maintained. Ideally, investors should revisit their portfolios once a year.

However, if there is a significant deviation – say, a shift of more than 10% in asset class weightage – then a mid-year rebalancing should be undertaken.

This disciplined process helps in avoiding emotional investment decisions and ensures wealth creation remains on track.

Q) Which theme will work now – growth or value?
A) While creating a portfolio it is very important to avoid either/or thinking, diversification is key. Building a portfolio that blends quality Growth stocks and fundamentally strong Value picks can better navigate shifting market dynamics.

A portfolio that blends high-quality growth companies with fundamentally strong value names can navigate shifting market cycles more effectively.

In volatile times, the ballast provided by value stocks balances the higher beta of growth-oriented picks. Over the long run, this complementary approach enhances consistency of returns.

Q) How are you reading into the June quarter results? Do you think earnings will improve in the next few quarters despite tariffs?The Nifty 50 has slipped 2.9% in the last 12 months, gold has delivered 46.71% returns and silver has surged 47.08%, making precious metals the best-performing asset class.
A) We saw earning growth in last quarter for Nifty 50 companies with Net Profit rising almost 12%, however Tariff concerns do weigh in. GST reforms along with Income Tax reductions of last budget, will help in boosting domestic demand.

This alongwith Govt spending will provide some cushion to Tariff impact and with Festive season beginning this will provide boost to Corporate Earnings.

Gold and Silver have certainly outperformed the markets over last 12 months, Global and Monetary Uncertainity, Flight to Safety and demand for Silver in EV/Green tech has led to this growth. Both metals are expected to continue outperforming amid global economic and policy risk.

Q) How are you reading about the global interest rate movement? Recently, Japan’s long-term government bond yields surged to multi-decade highs. –
A) The US Fed has maintained high benchmark rates due to high inflation trends and labor market conditions. ECB and Bank of England have cut rates while the Bank of Japan has uniquely gone on rate raising cycle.

Japan’s long term Govt Bond yield particularly 30 yrs JGB yield surged to 3.2%. Primarily due to BoJ’s policy of tapering bond purchases and abandoning yield curve control.

Inflationary pressures and fiscal expansion plan also added to the surge. Global Interest rate landscape is marked by divergence of central bank policies. This development is reshaping both domestic and International fixed-income markets.

Q) FIIs have been net sellers in equity but they are not sparing debt either although the intensity is lower there. How should one read into this? Are we still expensive?
A) FIIs are cautious amid global uncertainty and domestic earnings outlook. Indian markets are considered expensive relative to global markets. Despite strong economic growth and structural prospects, high valuations leave limited margin for error.

DIIs are providing counterbalance by continuing to buy selectively. Long term growth story of Indian equities is intact, short-term volatility might persist for some time till global factors turn favorable to us.

Q) On the closing note – what is your investment mantra? –
A) My investment philosophy is built around simplicity and discipline. Decide on an asset allocation strategy that aligns with your risk appetite and financial goals. Diversify across asset classes rather than chasing momentum.

Stick to a long-term plan, rebalance portfolios periodically, and most importantly, continue with SIPs without interruption. Patience, discipline, and consistency are the cornerstones of long-term wealth creation.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)