Shankar Sharma, vice-chairman and joint managing director of First Global, on Monday, said that if Fed says inflation is transitory then there is no reason to raise rates.

Share Market Live

NSE

“If inflation doesn’t excess; it’s transitory, as they keep saying (the US Federal Reserve) then there is no case to raise rates. If there is no case to raise rates, the market will keep rallying upwards and onwards barring occasional corrections like in midcaps, smallcaps. It has been a bad one-one-and-a-half month in which many have fallen 20-30 percent. So those will keep happening but I do not think that the trajectory will be affected, at least, on a 12-month basis,” Sharma said in an interview to CNBC-TV18.

Also Read: Deflation a bigger risk than inflation, Fed may ease again: Macquarie’s Shvets

He further said, “In investing, you must always be hoping for the best but be prepared for the worst, at least that’s the way we manage our own money or public money. We are always cautious; irrespective of what the Fed does or does not do, we are never going to drop our guard and say that there is no risk. There is always a risk; some of the most irrelevant risks can become severe. So always remain cautious.”

Also Read: Warren Buffet's investment advice during periods of high inflation

On investments, Sharma said, “One should, as a small ticket investor, diversify across 3-4 different horses, see which horse, in 6-12 months, delivers better returns post-tax. I think those decisions will be made by investors and not by us as managers.

For the entire interview, watch the video