“Timing markets around geopolitical developments is inherently difficult and often counterproductive,” she said in an interview, reiterating that systematic investment plans (SIPs) remain one of the most effective ways to navigate uncertain conditions.
Geopolitical shocks such as the West Asia conflict may trigger short-term volatility, but they rarely alter the long-term trajectory of equities unless they disrupt global growth, trade or energy supply in a meaningful way, she said.
“Markets are reacting more to uncertainty than to any real change in company earnings, and such reactions have settled down over time in the past,” she said. “Corrections often create opportunities for disciplined investors.”
Her message to SIP investors is clear. “If you have SIPs, do not stop them,” she said. “Stopping them during corrections will kill the averaging cost effect for which they were made in the first place.”
For lump sum investors, Desai recommends systematic transfer plans (STPs), which stagger investments from liquid to equity funds to manage volatility.
Desai sees value emerging in financials, particularly private banks, insurance and select housing finance companies. “The recent correction is a good time to invest in sectors that are not doing well but are still fundamentally strong.”
A recent DSP note showed the Nifty Private Bank index is trading at two times its price-to-book (P/B) ratio, among its lowest levels in a decade With market valuations closer to long-term averages, the current environment offers opportunities for investors focused on value and quality, she said. As Desai put it, “The key is discipline and consistency, not reaction.”
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