May is for mangoes. The first variety you spot in Delhi is usually the Safedas, liked best for the shakes they whip up. Himsagar, Suvernarekha, Kesar are some of the other varieties spotted early in the season. The mid-mango season is when the more sophisticated varieties such as Alphonso, Banganapalli, Dussehri and Langda hit the market. Others like Fazli and Chausa follow late in the season.
These are just a few varieties within a single family of fruit; there are multiple other fruits, each of which may have different varieties and tastes depending on which part of India you reside in. But every season is dominated by only a few of these, like mangoes and lichis in the summers, and oranges and berries in the winters.
The universe of stocks is no different. There are a multitude of stocks available across various sectors, each of which emerges cyclically or seasonally, and there’s a whole bunch of options within each of these.
There are signs all over the place to be picked up before the tree starts bearing fruit—the fragrance of the mango blossoms, the melodious call of the koels and the playful parakeets doing the rounds. For picking sectors, too, there are signs that you need to watch out for—the reversal in the economic cycles, the consumption and demand trends and others depending on the sector you are eyeing.
The difference, of course, is the timing of enjoying the fruit. Eating a mango at the peak of summer may ensure you get the best and shield yourself from a heat stroke. The best time to lay your hands on a sector, however, is as soon as you pick the first signs of blooming because, unlike mangoes, picking a sector when it’s at its peak may not be the best strategy. In any case, for both mango lovers and sectoral investors, the wait for the right time is always long and excruciating.
Also, it needs a keen eye and some experience to spot the right picks. “No sector underperforms or overperforms forever. So you always have to keep a watch for that,” said Devina Mehra, chairperson, managing director and founder at First Global, as part of the exclusive discussion that Outlook Money organised in April, to narrow down on the sectors that hold potential.
Picking the right sectors at the right time can bear fruit later and give your portfolio a kicker. Of course, the overall portfolio strategy can never be dictated by when and which sector is doing well and at what point. That needs to rest on the two central pillars of getting the asset allocation right and being ruthless on the risk management aspect.
Moreover, many stock picks are not sector calls, according to Mehra, while market analyst Ambareesh Baliga, another participant, highlighted the need for businesses to be nimble-footed with changing times and the importance of spotting such companies. Sunil Singhania, founder, Abakkus Asset Manager LLP, added, “The best company in the worst sector may do well, but the worst company in the best sector may never do well.”
One could rely upon a little bit of sectoral and thematic investing, perhaps through products managed by professionals, said Dhiraj Agarwal, co-head of institutional equities and head of equity sales, Ambit Capital.
For that little bit of your portfolio, we have curated a list of five sectors after thorough research and discussions with several experts. I personally keep the Dussehris and Langdas on top of my mango list; you can take your sector pick from the list we have put out.