'Overweight on large caps would provide stability in adverse events'

How is your team viewing the current market valuations and preparing for possible corrections? Equity markets are a function of both earnings and multiples. On the earnings front, we have consistently seen over time that nominal GDP growth has translated into similar earnings growth for corporations. Cyclicality comes into play through profit pool participation across sectors over shorter periods, but over longer periods, almost every sector has grown in size and scale. Multiples are currently influenced by liquidity and recency bias. Markets have their own ways of evaluating and, at times, extrapolating the current earnings trajectory to a longer timeframe. This can crea

This article was originally published on October 30, 2024.