2023 To Be A Market For 'Discerning Investors', Says Marcellus' Pramod Gubbi

The year 2023 will see "a far more rational way" of investing and a "market for a more discerning investor", according to Pramod Gubbi, founder of Marcellus Investment Managers.

Markets and investing in 2023 will be "sensible globally, both from an asset allocation perspective and the choice of securities", Gubbi told BQ Prime's Niraj Shah. "That will be different from the "crazy mania we saw, where literally everything went up."

"It will be a market for one that can separate the wheat from the chaff. It's not going to be that easy to make money," he added.

Gubbi said given the low interest rate scenario of the last couple of decades, people had to forcibly look at risk assets to generate returns on their savings to be able to fulfil their financial aspirations.

"Now, with the U.S. 10-year Treasury giving you 4%, that desperation to go after risk assets is less. So your asset allocation will structurally change. Unless there's a small school of thought that believes that this scenario is a blip, sooner or later we'll go back to the good old days of low interest rates. But, the consensus is soon building up that we might not see those things ever again," he added.

"The best period for equities, from a global perspective at least at the index level, is behind us. You'll need to work harder to pick great companies to achieve the returns that we achieved over the last 10–20 years. It will be more of a bottom-up market," Gubbi said.