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SIP as much as you can and as long as you can, says Dhawal Dalal


Dhawal Dalal, CIO-Fixed Income, AMC, is well known among debt mutual fund investors. We were surprised when we reached out to him for our series ‘Beating volatility.’ Dhawal Dalal turned out to be an astute equity investor as well. He is also a keen observer and student of the market. Dalal spoke to Shivani Bazaz of ETMutualFunds about his experience dealing with the stock market that began in 1997. Dalal says the tech bubble in 2000 ‘provided a great learning experience for investors to focus on quality and earnings and introduced me to systematic investing in the quality stocks.’ “Long-term investing in quality equity MFs through SIP has worked out very well for my family and me,” says Dalal.

Do you recall your initial years in the market?

While my family has been investing in quality stocks for generations, my personal journey into the stock market began in 1997 in the US Tech stocks when I was working in Merrill Lynch Asset Management in USA. Those were heady days for technology stocks. The whole world was going crazy about TMT stocks. New valuation parameters, such as # of visit to the website or eye balls to the website were introduced. Obviously, it did not last long.


What was the first thing you learnt in your initial years in the market?

By the time tech stock bubble burst in early 2000, I was in India. There was blood all over the market. I distinctly remember NAVs of some tech-oriented equity funds fell to as low as Rs 2-3 per unit from their heady levels. It was painful for some. However, it provided a great learning experience for investors to focus on quality and earnings and introduced me to systematic investing in the quality stocks. Long-term investing in quality equity MFs through SIP has worked out very well for my family and me.

Which was the first bad phase in the market that you remember clearly? How did you navigate it?

Bursting of the tech bubble in early 2000 was the first bad phase for personal investing. I saw my net worth eroding significantly as stock prices of marquee tech companies fell like a rock. It was quite painful. However, that crisis taught a valuable lesson of diversification and importance of investing through equity mutual funds.

Can you tell us one mistake that you remember clearly from your initial years? What are your learnings from that mistake?

My family owned a large chuck of shares of a Swedish MNC. The company was sound but the stock price was languishing in late 90s and early 2000s. The company announced delisting of its shares and we tendered all our shares without thinking through. Obviously, some shrewd investors did not tender their shares at that time and stayed invested. The company bought their shares at ~10x in less than three years. That was a great personal opportunity loss to our family’s net-worth.

This incident made us realize not to consider short-term movement in share prices or payment of dividend as barometer of company’s financial health and focus more on business model and its long-term potential. And also to understand the intricacies of the delisting process before tendering shares blindly.

You have been in the market for such a long time now. Were there any bad phases that made you lose your nerve? How did you navigate it?

Investing in stock market is always fraught with risk and volatility. Fortunately for me, the tech bubble bursting and consequent malaise in stock market provided a fantastic opportunity to invest in quality stocks through SIP. A significant portion of my family’s net worth can be attributed to gains made through SIP investing since early 2000s. I have learnt invaluable lessons in this process such as – do not focus on the best performing equity funds and get the sector allocation mix right in your portfolio.

How do you see today’s market in context of your own journey?

I remain quite bullish on India. One thing I am quite happy and proud about is the rise of retail investing. Now, no longer we are slaves of FII buying or selling in Indian stock markets. Earlier, all stock news reports used to start with FII trade activities and their impact on stock prices. Now, no longer. This is the new India. And I am very proud of it. We should do everything possible to strengthen this and grow from here. It will be really great for our future growth.

If there is one thing that you would want young investors to learn from your experience, what would it be?

SIP, SIP and SIP as much as you can and as long as you can. Ensure that you invest in diversified equity funds and let it grow. Refrain from the temptation of frequent fiddling with the portfolio.



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