Share Market Outlook: The decline that started in the Indian stock market from the last week of September 2024 due to the selling by foreign investors is continuing till the third week of November. During this period, foreign investors sold shares worth about Rs 1.60 lakh crore. During this sell-off in the market, the biggest beating has been seen in midcap and smallcap stocks. In such a situation, the big question before investors is which companies should they invest in where they get great-safe returns. Motilal Oswal Private Wealth has released the Alpha Strategist Report in which it is advised to invest on the basis of strong fundamentals of companies instead of flavor. 

The valuation of large-cap stocks has improved 

According to the report of Motilal Oswal Private Wealth, after this decline, the valuation of large-cap stocks has come in a fair range equal to its long-term average, while mid and small cap stocks still look expensive. According to the report, after 2 years of great growth in all market caps, the expectation of future returns will have to be limited and kept according to the company's earnings. Motilal Oswal Private Wealth has advised to invest in large-cap and multicap in a phased manner for the next 3 to 6 months. While it is advisable to invest in select mid and small caps in 6-12 months as per strategy. In the note, it has been advised to adopt equity oriented hybrid strategy for investing lump sum amount.    

Investors are advised to adopt a balanced strategy

Motilal Oswal Private Wealth has said that the outlook for the equity market looks positive due to the reduction in corporate debt in the long term and better earnings in the last two years. However, in the short term, volatility may continue due to geopolitical, central bank policy and valuation. In such a situation, investors have been advised to adopt a balanced strategy in the note.     

How to allocate your portfolio 

In the note, Motilal Oswal Private Wealth has advised to invest 30% of the portfolio in actively managed duration funds as well as government securities papers with an average maturity of 15 to 30 years. Apart from this, 30 to 35% of the portfolio has been advised to be invested in Multi Asset Allocation funds and Equity Savings Funds. And 30 to 35% of the portfolio has been advised to be invested in fixed income portfolio.