Buy the Boring, Beat the Buzz: ICICI’s Uncool Path to Cool Returns

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In a world where investors chase momentum and headlines, S Naren, Chief Investment Strategist at ICICI Prudential Mutual Fund, is urging a radical rethink. Speaking on a recent ET Money podcast, Naren unveiled what he calls a ‘bad’ mantra for earning good returns across asset classes like gold, silver, equities, and property. His advice? Invest in what’s currently unpopular. It’s a contrarian strategy that challenges conventional wisdom and calls for disciplined asset allocation, especially when markets are euphoric.

Here’s a detailed breakdown of Naren’s philosophy and how it applies to today’s investment climate.

1. The ‘Bad’ Mantra: Invest Where Others Won’t

- Naren’s core advice is simple but counterintuitive: invest in asset classes that have recently underperformed
- He warns against pouring money into assets like gold and silver after they’ve rallied, calling it anti-asset allocation
- Instead, he suggests looking at sectors or instruments that are currently out of favor but have long-term potential
- This approach requires emotional discipline and a willingness to go against popular sentiment

2. Gold and Silver: Don’t Chase the Shine

- Gold and silver have seen strong rallies recently, with ETFs attracting record inflows
- Naren cautions that buying into these metals now could lead to poor long-term outcomes
- He points out that precious metals don’t pay dividends, interest, or offer valuation metrics like P/E ratios
- Investors should consider allocating to these assets only when they’ve underperformed, not when they’re trending

3. Equities: Timing Is Everything

- Naren highlights historical moments when equities were deeply undervalued, such as post-2008 and during the early COVID-19 period in 2020
- He notes that most investors missed these windows and instead entered the market after rallies
- The lesson: invest when equities are cheap and sentiment is low, not when everyone is bullish
- He emphasizes that successful equity investing is more about behavior than arithmetic

4. Real Estate: Look Beyond the Hype

- Residential and commercial real estate, especially office spaces, are currently underperforming in many regions
- Naren suggests these may be ripe for investment, especially as other asset classes become overheated
- He encourages investors to consider long-term fundamentals rather than short-term popularity
- Real estate cycles tend to be slower, offering opportunities for patient capital

5. Asset Allocation: The Real Hero

- Naren’s mantra hinges on disciplined asset allocation across multiple classes
- He advises investors to maintain exposure to all major asset types and avoid overcommitting to any one
- This strategy helps mitigate risk and smooth out returns over time
- Asset allocation should be based on performance cycles, not emotional reactions

6. Behavioral Investing: The Hardest Part

- Naren admits that while the strategy sounds simple, executing it is difficult
- It requires investors to act when fear dominates and to hold back when greed is rampant
- He cites examples like the post-Lehman crash and early pandemic lows as ideal entry points that most missed
- The biggest mistake, he says, is chasing returns after the fact

So Basically...

S Naren’s ‘bad’ mantra flips traditional investing on its head. Instead of following the crowd, he urges investors to seek value in neglected corners of the market. Whether it’s gold, silver, stocks, or property, the key is to buy when others won’t and to trust in asset allocation over emotion. It’s not just a strategy—it’s a mindset shift that could redefine how investors build wealth in volatile times.

Sources: Economic Times, Business Today, Sakshi Post