Invest....(but where?). Everything is falling: Gold, Nifty, AI Stocks

0:05 Hi everyone. So on this video, we are going to study how to handle volatility and how to invest in a deeply uncertain world. Now starting 2020, something weird has happened that you know what? Okay, COVID happened, so many problems happened, so much volatility, Indian markets went down, US markets went down. Then Russia-Ukraine fought with each other. Again, the US market went down, Indian market went down. Now in current war, something strange happened that Okay, this was war was between Iran and US. US market went up, Indian market came down. Many Indians thought that hey, you know what? Okay, war-like situation, volatile situation. If we buy gold, maybe it will be good. So people started chasing gold. Now gold has come down. Point is that something weird is happening in the world, right? And it is getting increasingly difficult to invest in these uncertain times. So what is it that you should do? Should you stop investing? Because if you stop investing, inflation will eat your money, right? So on this video, I'm going to give you a very simple explainer. Five, six points I will teach you that will hopefully give you enough context as to how to handle volatility on your portfolio, how to invest new money that you're getting, how to handle your current portfolio if you're on certain losses, should you continue to run SIPs versus not. So I will teach you some very important macro points. So without boring you, let me jump right into it. The first key point that you should know are some very basic points, okay? Basic points means that at least you have to basic knowledge here for investing. And the most important thing here that you should know is the concept of diversification. Diversification means that you have 100 units of investments. Now you have not put all this 100 units of money into equities, okay? Or Indian equities. You have spread the risk across different asset classes. So let me give you a very concrete example, right? So let's say that you have 1 crore rupee. You decided to invest 50 lakhs in Indian equities, 20 lakhs in US equities, 20-30 lakhs, a small shop you bought it in tier three city or something, okay?

1:59 Now here what you have done is that you have purchased Indian equities, which is Indian stocks. That's an asset class, stocks. You have also purchased US equities. Now, what purpose will US equities serve? Well, in case INR falls or there is some kind of currency crisis in India, then US equities can help you offset that currency loss, okay? Because the US stocks that you're buying, for that you're converting your INR into US dollar, right? And then buying. So, you are automatically purchasing something in US dollar terms. When you're buying a small shop, 20 30 lakh rupee shop, that's a real estate, okay? So, that's an entirely different asset class. So, this concept of diversification is very important. Natural question comes that hey Akshat, we don't have like 1 crore rupee. So, you know, I mean, how do we buy like a shop, right? Should we buy REITs? Should we buy this? No. Then you do go simple, okay? So, what you simply do is that you buy like Indian equities, you buy some US equities, okay? You buy gold, right? That is doable, right? So, at least this way you are diversified in a different geography, you are diversified in a different asset class.

2:58 That's important, okay? Now, how much to do it? Can you perfectly do it? Don't run after perfection. At least start doing it, you will get better idea, okay? So, this is very important first point, right? First basic point. The second basic point is called as the concept of cycles. Now, for this, I will just quickly take you to the gold cycle, okay? So, here is gold, right? And what you would notice is that see, when gold was running, right? Gold was running like this, and people were chasing gold here, right? Now, if you chased gold, this, right? Then honestly, you did not make any return, right? Plus, you had to go through a lot of heartache because gold went down, then it went back up, then it went down again. So, the point is that if you buy something in a good cycle, right? Good cycle, okay? Good cycle. People think that good cycle is when the prices are going up, okay?

3:43 People typically chase that asset during that time. Do not do this. For this, you don't require any finance knowledge per se. What you simply need to do is that you need to buy consolidation points, okay? Consolidation points means that this rectangular formation, okay? So, for example, you can see that hey, gold had consolidated here. Here, here. So, a kind of a rectangle is getting formed. This is a consolidation cycle for gold. So, I've a little bit of equity, okay? But, when there is a rally going on, don't go and buy that asset class or asset cycle, okay? This is a very important second point. If you combine these two basic points, one is diversification point that you're diversified across country, currency, asset classes, plus you are not chasing a cycle, then automatically you have removed 60-70% of mistakes that you will make in a volatile environment, okay?

4:29 This is this all very simple, but it is very very difficult to do. Now, I teach all this on my global investing community. In case you guys are interested, do check out. Our portfolios are performing exceptionally well, right? In the last two to and half years when I started this community, people have made very good money. I teach macroeconomic concepts. I put my own money on the line. So, this is not just talk talk talk type of community. I actually put my own money on the line, perform, okay? So, in case you're a serious investor, do consider checking it out if you can afford it. Definitely, I would love to see you on the community. I will love to interact more with you. So, I'm putting the links in description comment box. You can check out, okay? So, I hope that this basic point is clear to everyone, right? Now, let me go into the specific macros. Now, in addition to understanding this cycle, you need to have a strategy to buy a dip or buy the dip, okay? So, let me give you two examples here. Let's start with gold only, right? So, for example, this is the gold cycle, okay? Now, what you will notice is that see this gold touches this point, goes back up, right?

5:27 Touches this point, goes back up, falls to this point, touches back, goes back up. Probably will touch this, go back up. I don't know, right? So, something like this is happening. So, this is called as point of inflection, okay? So, this is basically support zone, support zone for gold. Okay, support zone for gold. Now, let's say that, you know, you you have 100 units of money, right? You have 100 units of money. You have put like maybe 60% of that money in equities.

5:52 You have put another 30% of money in commodities, right? Commodities, it could be gold, right? And you're mostly invested, right? Now, the new money that you're coming, right? All the new money that is coming to you, let's say that you're making another 10 units of money every year, right? Up in salary and all that and all that stuff. You're again splitting it into the 60/30, right? And 10% up in 2000 money okay, so that you're doing it for money. Now, this 10 units of money, what you should do is that six units you will spend here, three units you will spend here, okay?

6:21 Now, if you find your asset class that you trust at support, okay? So, this is the support zone. Is gold at support right now? The answer is yes. Should you buy it? Yes. When I say yes, that does not mean that gold will start running from tomorrow. But given your style of investing that hey, you basically trusted two or three assets. One was Indian equities. You trusted a little bit of gold. Now, that asset class is at a support level, so you can top up, okay?

6:47 So, this is a good time to top up for an investor who is trusting gold. Am I topping up gold? Little bit, yes, okay? My investment strategy is different. I will teach you at the end of this video, right? How exactly am I putting my money on the line? And how exactly am I investing in 2026 2027, okay? But long story short, right? What is happening here is that we are finding the support zone and adding gold, right? So, this is the bottom line. I hope you guys are able to understand. This is not a bet that you know, in the next two months will gold go to 3500 3600. I see, you are diversifying in a good asset class.

7:19 Plus, that asset class is not correlated to your core asset class, which is equities, okay? So, I hope that this point is clear that hey, you had picked like two three asset classes. One was equity, one was commodity, and within commodity you had picked gold. And that gold you're finding it at a good support price. Therefore, you're buying it, okay? Now, this can be applied to individual equities also. For example, if let's say that I in my style of investing would be that hey, in my universe of investing, if I have 100 units of money, I pretty much put like 70% equities. Even here, almost 80% of money is in US equities, okay? And 20% is like you know, rest of the world.

7:58 second, I put in stable assets, okay? Stable asset. Now, stable asset would mean real estate, right? And commodities, maybe, okay? Something like a little bit of gold and cryptos and all that, right? So, I spread it this 30% here, okay? Now, if I'm looking to top up my equity, right? 70% equity, right? And I my major consideration of buying is US stocks, I will always look for opportunities where I can find entry into US stocks. So, I will keep a tab of 15-20 good US stocks, right? That I want to buy more. So, today for example, Google, right? And let me pull up the chart first. You can see Google is trading here. It's already was trading at a support and pre-market it has fallen by 10%. So, the market will open, right? Google will be somewhere here.

8:38 Now, guess what am I going to do, right? I am going to top it up. Now, am I topping it up with the viewpoint that you buy, you know, okay, tomorrow I will be able to sell it. No, this is my portfolio. Take a look at it, right? I already own Google and I am on significant profits. For me, Google is a type of a stock that is buy on dips for me. Why? Because my portfolio is designed in a certain manner, okay? So, everything goes to point number one, the design of your portfolio, okay? So, for example, my structure was 70% equity.

9:06 Within that also, most of the equities were US equities. Now, here again, Google is one of my trusted stocks. I have done my fundamental analysis. So, I will always look for opportunity to buy more Google on supports. And now, it has fallen to this support, right? Now, in case it falls to this support, I will add more, right? And I will keep on adding to my portfolio of Google till the point Google becomes not handleable on my portfolio. If I end up owning like let's say 20% of my entire portfolio is Google, then I will start panicking a little bit, but usually I keep my stocks between 5 to 10% of the entire portfolio. So, I'm buying this, okay? Now, I there are a bunch of stocks that I will buy this week because they have fallen quite a bit.

9:46 Now, this is a very important point, okay? And let me move to point number three, which has to do with valuation. Now, what people if you just generally go and speak with people right now, read about AI stocks. Many people are saying that you know what, AI stocks are in a bubble. I bought about, right? I mean, this is Google, okay? Now, Google will fall here. So, Google has fallen by roughly 30% from its peak. If you calculate the PE ratio, right? PE ratio is the valuation ratio of Google, it will come out to be less than 18. Okay, so it is trading at a forward PE of less than 18.

10:16 This is cheaper than Nifty 50. Okay, long story short, you are getting Google at a decent valuation. Now, this does not mean that Google cannot fall by another 10% from here. It can. I don't know. Okay, but if you are making a decision today to buy it and with the viewpoint that see this is my core stock, this goes with my style of investing, my style of portfolio building, then you can easily hold it. Okay, as long as you're not excessively over invested in Google. So, yeah, in my case I'm not over invested in Google. I had reasonable positions. Most of those positions are already in profits. So, for me this is a buy on dips stock. Now, what happens when you do buy on dips sensibly? Well, it allows you to handle volatility. Okay, this is the beautiful point that people get panicked stock 10 20% but see if you already have a list of the assets that you typically trust, then you will not start panicking to get on the way. Okay, so this is a very important point that you need to have a strategy of handling the fall. In my case, I can easily handle the fall on Google because I have a very clear-cut strategy that what percentage of my portfolio will I put on Google and where exactly will I be buying it. So, all these things are predetermined. Now, again I teach all this on my community.

11:24 You can check it out. Now, then comes the next point that hey, okay fine you're buying Google, right? And maybe like it's 5% 7% of your portfolio. You will add more it will become 10% of your portfolio. But what if Google keeps on falling? Then what happens? That's bad, right? I'm not Of course, I will get trolled on the internet or whatnot, right? And many of you would start writing like you know bad comments because of you we bought like Google and you know now we are destroyed our household whatnot. See guys, here you need to understand the concept of broken price versus broken business. Okay, this is a very very important aspect or component of investing in the stock market. Now, a broken business is somewhere which is undergoing a fundamental shift. For example, one could argue that there was a company called as Kodak, right? Not Kotak.

12:07 Kodak, okay? Kodak was used to make digital cameras, right? And And this company was a billion-dollar company and over time it was replaced by digital cameras. They used to make analog cameras. Now analog camera technology itself got replaced by digital cameras. Everyone started using DSLR etc. And Kodak was not a broken price. It was a broken business because they did not innovate with time. Now is that something similar which is happening on Google? The answer is absolutely not. If you study why Google stock has fallen by 10 12% you'll get a very clear understanding that boss Google has fallen because of a bunch of reasons, but one of the primary reasons is that they're going to over invest in AI. Okay, so what they had said that hey we're going to invest like you know 20 units of money. Like this is the announcement they made in 2026, but now recently they changed it. They said no no not 20 units. We'll spend 25 units, okay. So now they're scaling up their CAPEX. So therefore right I mean people are panicking that you know what okay maybe this AI spend is not going to translate into profits. Okay, cool right I mean which business is right now disrupting Google? It's tough to disrupt a company like Google which has such clean finances. Yes, over time it might not be the best version of it right that okay Google used to be an extremely pristine business. And maybe AI story will not play out the way we are anticipating, but under no circumstances right now Google is a broken business.

13:27 It's a solid business. it has grown its revenues. There is no problem in terms of growing the revenues. It's just over spending what is happening and that is happening across the AI spectrum. So long story short you need to understand the difference between broken business and broken price. Right now Google's price is breaking. So this becomes an investment opportunity. This is not a broken business story. Now what is a broken business? Okay, so if you look at Nifty 50 collection of companies. Now what is happening is that AI is disrupting manufacturing. Okay, that's a real threat. Okay, AI is disrupting companies like TCS, Infosys. That's a real threat. Okay, we cannot make the argument that you know what okay TCS business used to be great. It will continue to be great. Maybe it will get disrupted by AI companies. We don't know, okay. There is always that element of uncertainty. So there is a case to be made whether TCS broken business. But in Google's case, the indication is that it is not a broken business at all, okay?

14:23 So, this is point number three. Now comes next point that hey, you need to understand the difference between structural breakdown of an asset class versus cyclical breakdown, right? Now, the easiest example I can give you is this, okay? So, for example, if you take a look at Nifty, okay? So, here is Nifty, right? And let me pick it up from here. Now, this period, right? This entire period from 2007 all the way all the way till 2014, right? So, 7 years Nifty gave zero returns, right? Now, you will go back and try to see what happened in 2007 to 2014 period and you will quickly realize that boss, Nifty gave zero returns because there was a real estate crash that happened in the US. So, this was global financial crisis. All the major indices in the world or majority of the major indices in the world, they struggled and therefore Nifty struggled. So, this was a cyclical problem. That okay, this was the entire markets were in a bad cycle.

15:18 Now, another problem is structural, okay? So, now one could argue and this is a thought exercise that you need to do, right? That hey, right now we are seeing Nifty giving 24 to 27 tak zero returns. So, 3 years of zero returns, right? also, the currency has depreciated very fast. But we'll be side with the 3 years zero returns. Now, is this a structural breakdown or is this a cyclical breakdown? Because if you look at a lot of markets like Japan, it has also gone up. UK, it has also gone up. US, definitely it has given bumper returns. Kospi, South Korean market, it has given very good returns. Taiwan, it has given very good returns. So, India seems to be in a structural problem or Nifty 50 seems to be in a structural decline. So, we need to acknowledge the fact that maybe this is a structural breakdown, not necessarily a cyclical breakdown. So, what you need to do? Well, you need to manage your risk. Now, many of you, right? Including me because I've taken a swing trade on Nifty, which I've started to cut a little bit, okay? So, what I've have to do here is that I cut a little bit. I'm trying to cut little bit whenever I get an opportunity and I would try to reduce my exposure here, right? And move to more growth markets for now, okay? now this is not a down vote on the Indian market. I think Indian markets will do well in the future.

16:32 That's not an issue. But at least as of now, at least till the time the year cycle is playing out, there are better opportunities elsewhere, right? That's how I'll put it. Because again, as I said, much better to invest in Google compared to Nifty 50. So if I get some money by pulling Nifty 50 out that money, I can put it in companies like Google which are already trading at a kind of a discount, okay? So I would rather do that, right? So this is my thesis. But I'm hoping that I'm able to tell you the difference between structural breakdown and cyclical breakdown. Now this is something that happened in Japan also, right? So this is a good example and we'll conclude it there, right? So let me show you Japan, okay? So here is Japan. If you study the market of Japan from '96 all the way till 2020, right? So whatever, like 25, 30 years of return, zero returns in Japan, okay? So this was a structural decline on the Japanese economy, bunch of different problems in Japan. It's like you know what I'm trying to say, the other markets were not doing well or Japanese market in the past has not done well. Japanese market in the past had done well. Now it has started to do well again, okay? Why? Because Japanese currency is giving net adjusted good returns to foreign investors. Therefore, this cycle has come and it has started to do wonderfully well, right? And same applies to UK, right? If you study the markets. So long story short, you need to understand the difference between structural breakdown and cyclical breakdown. So okay, so this brings us to the final point that I wanted to cover and this has to do with the concept of investment strategy that you can use right now, right? And if you have 100 units of money, how you should think, how you should play. So let me summarize some key points for you, right? Based on this fundamental things that I have taught you. Number one, do not be scared of investing because if you just keep your money on cash, the problem is that it will be eaten by inflation. There is too much money printing that is happening. So you cannot afford to just stay in cash. For example, if you have made new money, we are your salary, your business, you need to go ahead and invest it somewhere. This is absolutely critical. You can't just keep on sitting waiting for better days to come, okay?

18:24 Number two point, you should diversify that money and invest across the asset classes that you trust. If you trust gold, go ahead and buy gold. It's trading at support. If you trust Google, go ahead and buy Google. It is trading at support. If you trust Nifty 50, go ahead and buy more. It is trading at support. You need to understand what fundamentally you believe in versus not, okay? At least put some time in terms of doing that research, okay? So, my take will be that if you have 100 units of money, invest continue to invest 66 units of money in equities. 33% money keep it in stable assets. Now, stable assets could be something like bonds, gold. This you can buy on every support.

19:00 This is important. This 66-33 is a ratio, right? And here what you need to understand is that see, if something is peaking, right? For example, if U Q Q hits an all-time high or Nifty hits an all-time high, then what is it that you need to do? You need to go cash. 15-20% keep it in cash. Why? So that you can buy it again. Now, this is exactly the method or system that I've been trying to teach my community also. We have been able to handle the falls really well.

19:24 Now, going forward, the market will continue to remain very volatile. It's not as if that volatility will go away because we are expecting volatility to come down so that we can enter the market. It's not going to be like that. We just need to understand how to manage our portfolios well and undergo this volatility even if there is a 15-20% 30% drawdown, you should have the courage to buy things that you trust, okay? So, read a little bit for example, today there is an opportunity in Google. If you believe in it, buy it.

19:52 If you don't believe in it, don't buy it, right? It's It's not end of the world. But, you need to back your conviction. That's the most important thing. And as long as you're not chasing a running cycle, you will be okay, right? Don't sit and debate that hey, is gold like at a good buying level or not? Why is it going down? No one knows why it is going down. That does not make gold a bad asset, okay? Gold has its own utility. US equities have their own utility. If you do not see a structural breakdown in the market, if you're not buying a very crazy valuation, you will be fine, okay? So, just continue to handle this. I hope that this video help you in some way. If it did, do press the like button and I'll see you soon.