Why Kirtan Shah Thinks Money Could Return to India | AI, IT Stocks, FIIs & the Next Market Cycle

[00:00:00] Have we missed the AI opportunity? 100% a yes. India actually is the anti-AI trade because everybody else moved up in the AI story except India. Why will somebody pay a $25 for a million token use on an Anthropica? But is it just the FOMO factor? It is fashionable. That is exactly what I really want to break as a myth. Now you see likes of HDFC, Kotak Bank, Asian Pains, DMART, ITC and the list goes on and they've made no monies for investors in the last five years.

[00:00:29] Do you really understand why you are buying what you're buying? And the answer in my opinion is a big no. Now gold, some would argue that yes there was a lot of buzz around it but it's fallen 30% from its peak. So what's the argument here for gold? I think the biggest thesis for why gold will work in the future is de-dollarization. Chinese central banks bought $10 billion worth of gold which was the highest in the last 20 months that they've got.

[00:00:55] Today US is at $39.6 trillion of debt that you and I are discussing. If interest rates go up, US is going to be in a big mess. What's the biggest worry for investors right now? Is it Trump tariffs? Is it inflation? Is it what's going on globally? Recently the consensus has been clear. Look elsewhere. India's time has not come. But that consensus is now shifting.

[00:01:23] In this conversation we talk about how investors should be thinking about portfolio allocation, why stock picking remains a high risk strategy for a retail investor and why Gen Z's portfolio needs a risk management foundation before they chase returns. And also why medical inflation is the underestimated threat to long term financial planning.

[00:01:45] Joining me is someone who has spent his career demystifying personal finance for the Indian investor from the boardroom of a BSc listed NBFC to building through Vanta wealth. Let's welcome Keetan Shah. Keetan, thank you so much for agreeing to do this podcast. There's so much I really want to ask you about. So shall we get started? Absolutely. Thank you so much for having me. Okay, so I just want to understand this is whole thesis right now that in India, no one's really making money.

[00:02:13] In the last two years, volatility and big headlines have really created quite a bit of havoc. What should investors do at a time like this? Everyone saying stay put and be patient. That's the way. Let me give you a little lengthy answer. Right now, this comes with a lot of hindsight advantage because had you asked me two years back, I would have not said what I'm supposed to say right now.

[00:02:35] But I think it's good to learn from what has happened in the past. Right. So first, I think most of us have to really understand where did we go wrong? Why have we not made money over the last two years? I think the first of course is when you look back. Like I said, had you asked me then I would have not answered this. But now, when you look back, you understood that India valuations were significantly higher. Right.

[00:02:57] And at the same time, of course, the world talks about India not having the AI opportunity. But I think there was something else also that happened, which a lot of us don't talk about. Before March 2026, I think the commodities market also saw massive rally. Right. So money moved out of equity into gold. That was one.

[00:03:21] Second also was that global yields had gone up. You saw Europe yield go up. You saw Japanese yields go up. You saw US yields go up. And hence money was also again rotating back to higher yield possibilities wherever there were. So when you look at it now, you understand that equity valuations were pretty high. You had fixed income offering you better opportunities.

[00:03:46] You had commodities offering you better opportunities. And then you had global landscape offering you a better opportunity because of AI, which was not there in India. Yeah. And hence, now that we look back, I think it was only logical that India didn't make returns over the last two years. But I think today that you and I talk, we have a very different view. And we think that this is actually the time to start investing more money in India.

[00:04:13] And I wouldn't be surprised if FIIs, which moved out of India over the last two years, will not want to come back to India. And there is a very specific reason that I say this. One of the biggest components why India did not receive money or in fact FIIs left India was because globally, AI offered them a very large opportunity.

[00:04:35] Yeah. Now let's break down AI into two, three components. First is the LLM business, which is your chat GPT and your Claude, Gemini and sorts, right? The second layer is actually the infrastructure layer. Infrastructure layer is where you play the memory, the semiconductors, the chips and all that story.

[00:04:57] And the third layer is actually the enterprise solution layer, which means that if the AI adoption is going to go up, right? Who's going to help you convert the AI adoption into an actual business for yourself? What actually went up globally were the first and the second place, right? The LLM model story went up and the infra model went up.

[00:05:24] But here is where the problem is now. While I can give you a very elaborate answer, but to help you understand what's currently happening is, you look at China, right? You first saw DeepSeek and then you saw Kimi. Both are Chinese models. And to talk about Kimi specifically because it's extremely fresh while you and I are talking, are now available in open weight model.

[00:05:50] In simple language, open source model is where you will have everything available for anybody who wants to look at how the algorithm is built. And open weight model is where they will declare probably 50, 60%. Now, this is keeping in mind that the audience will not be technically so smart. So I'm trying to dumb it down. Now, the Chinese models are available almost at a throwaway cost. Right? Now, if these Chinese models are available at a throwaway cost, they are available in open weight.

[00:06:20] Right? Why will somebody pay a $25 for a million token use on an Anthropic? Right? Which is why you see there is something called as the token index, which in Jan of 2026, on an average was trading at roughly $2.5 for a million token, which in the last month was 1.8 and now has probably come down to 1.5.

[00:06:47] So the point that I'm trying to make is that the Chinese LLM models are making it extremely difficult for the US models to make money. Right? Because if something is available for free and it is, let's say operating at 80-90% efficiency as much as the US models, why will somebody pay this? So China is offering it at a fairly cheaper price with respect to the AI model. The US is therefore suffering.

[00:07:15] Correct. So now you have Alphabet, which has invested into Gemini. You have Microsoft, which has a 27% stake in OpenAI. Right? You have the entire Elon ecosystem doing Gawk. So you have a lot of players who have actually invested in the LLM model, which is now going to suffer because Chinese are making it much faster and much cheaper and at the same efficiency.

[00:07:45] Right? To top that up, you see while we are recording this, two days back, the entire AI ecosystem came together and said that US also should go the open weight model. Okay. So you had Satya, I mean, you had let's say Microsoft, you have Alphabet, you have Sam Altman of OpenAI, everybody, Jensen of NVIDIA, everybody came together and they signed this letter saying that US should also go the open weight model.

[00:08:13] Now, if US goes the open weight model, how are you going to justify all the capex that you've done all this while and more capex that you really need to scale up in this business? So the first challenge that this AI narrative and ecosystem currently is facing that the LLM models are facing a huge challenge from the Chinese LLM models. And there is a challenge for these guys to end up making money. Okay.

[00:08:42] Second, let's talk about the infra story, which was the second part of the discussion. Now what's happening in infra again, you go back to China. China yesterday declared that they've been able to make the lithographic machines, if I'm pronouncing it correctly, which is what the ASML paste out of Netherlands was making so far.

[00:09:05] So it's actually the machines that are used by companies like TSMC to make the chips. Now, those guys have been able to crack this and make it so efficiently at such a lower cost. And if they are going to be able to do it within China, why will that business get outsourced to a TSMC and an NVIDIA then? Right.

[00:09:31] So the infra story is also getting challenged to a greater deal. Now, if you look at both of these together, if let's say the US comes out with the open weight model, of course, the penetration will grow much faster than the penetration has grown right now so far. And hence the adoption of AI will go up. But will that necessarily benefit the existing ecosystem?

[00:09:55] That's to be seen because you've priced the stocks at a level where you are assuming that until 2030, you will keep growing at the same pace that you grew in the last eight quarter. That looks challenging. Yeah. Now, why do I say money should come back to India and why should or should not should come back to India? And why will India benefit in this ecosystem? Because the third layer of enterprise solution is where India sits.

[00:10:19] Today, if everybody is going to start adapting to more AI, right? And now if there is going to be open weight model available and larger companies would want to bring in more AI to their business, you will actually need somebody to give them an enterprise solution. Got it. You are not going to hire a 10 member team so that they can use a free open source or an open weight model available to integrate to your business.

[00:10:48] You will actually need somebody who can understand what your business is, understand the software solutions and the enterprise solutions that you are using, understand what is available in AI and marry them both. Okay. Is where India will benefit because India sits at that model.

[00:11:05] You would already start seeing global media and India media started quoting, hearing from the commentary that came out with the latest quarterly earnings of the IT companies that they've again started ramping up employees. Now, why would you as a business start ramping up and hire more employees if you don't have clarity of business coming in? You look at all the IT companies results that have already come out.

[00:11:33] They've significantly benefited or gone up in the revenue that they've made through AI as a service. Yeah. What I'm trying to say is that if global markets went up because of the AI story, AI now the ecosystem is getting challenged. If that money has to start moving out because Korea is down 33% in a month, Japan's down 15% in less than a month. And these indices don't really show you the pain. Yeah. The pain is much below.

[00:12:02] SpaceX is down 45%, Oracle is down 50%, Meta is down 25%, Microsoft is down 30% and the list goes on. Okay. Right? The index does not show you the pressure that the stocks really have. Okay. So, if this is going to come back or probably FII's are going to now start thinking where do I start deploying money? India is the fastest growing economy. And India actually is the anti-AI trade because everybody else moved up in the AI story except India.

[00:12:31] So, if the money has to come back from there, it has to go somewhere where it has not been in the past. So, two part question. What has been the response of people in general? Because you've been shouting from the rooftops that now it is time to skip that AI opportunity. India, Midcap IT is where the opportunity is at. How has everyone reacted? Number one. And number two, apart from this enterprise solution which is the opportunity we have, you can't deny that we have completely missed the AI opportunity that took place globally.

[00:13:00] So, let me answer your second question first. Have we missed the AI opportunity? 100% a yes. But let me give you a caveat or a different way to look at it. Let's say if the AI opportunity hypothetically and I'm doing this to explain what I'm trying to say. Let's say the AI opportunity started two years back or two years back is when the Indian IT services company understood that they've not done something on the AI and they've missed the pass.

[00:13:26] The only thing that they would have really been able to do is work on the LLM model because they are not on the infrastructure side. They are not going to start building hyperscalers or data centers or memory or chip business. Right? So, what they could have played as a role is to play on the LLM side. Right? But now when you look back in the hindsight again, right? Now whether did they miss the buzz out, they were lethargic, whatever it is.

[00:13:51] But today, when you and I talk, it's working in their favor because anybody who's invested in the LLM model is now questioning thanks to China, how are they going to make monies? Okay. Right? So, of course, two years back, 100% they were under invested AI. They made a big mistake.

[00:14:10] Now, when you look back, I think I would be somebody who would say that great, they did not do the LLM bit and they started doing whatever little that they could do on the infra side, which is why a lot of these guys have invested on hyperscalers and data centers where probably the visibility of being able to make money, of course, not immediately because they are extremely capex heavy. And it will take a very long time for them to really see the ROI. But I think versus an LLM and infra story is a much better play. Okay.

[00:14:40] That's the answer to your second question. Answer to your first question. People are still not very, very happy taking the IT bet. Because look, you will have to understand, fortunately, unfortunately, most people that you will talk to in the investor community who are not professional investors, they have a hindsight disadvantage. What do I mean when I say this? You ask anybody, why have you invested in this particular mutual fund scheme that you've selected?

[00:15:09] Whether they tell you that or not, but the fact of the matter is that they would have done that because in the last three years, that scheme would have generated better returns. Recency bias. Recency bias. Now, if you look at the IT, India IT services performance over the last two years, you will see a TCS is 40-45% down. You will see an Infosys is 40-45% down. Mid-cap IT companies are 25-30% down. With that kind of past performance, the recency will not work in their advantage.

[00:15:39] Who is going to invest? Nobody is going to invest. Right? So, of course, the general junta is not interested in the IT services business at this point in time. But I am somebody who believes and we are getting our investors to take a bet on the IT services side of the business because we really feel that at a 17-18-P today, with the kind of management commentary that we are hearing, with what we are seeing in the global markets happening to the AI story,

[00:16:08] I think the services business, not just in India, but globally will start to recover. So, you are saying that now is the time to invest in the IT services business despite what we have seen play out. And what are you expecting over the next two to three years? If I go ahead and take that advice from you, how do I see my portfolio fair? First, I don't want to use the word advice, you know why. But the fact is, look, nobody knows what kind of returns somebody will end up making.

[00:16:34] But the point that I am trying to make is that if the IT index is trading at 28,000, available at a 17-P, I see management commentary, where I see that there are certain stocks whose AI business was at roughly 4% has now become 8%. I see that their headcounts are increasing.

[00:16:56] And I see what's happening to global, I don't see a reason why it's not a risk-adjusted bet to take in the IT space. Because look, when you are investing, I don't know how the retail things work, as a professional, the way you really have to look at any situation is your drawdown or your risk-adjusted return. Right? So, if you are investing today and if there is a probability that you will lose 10%,

[00:17:24] but if there is a probability that you can make 30%, is the bet that you take. But let's say the probability of you making 10% on the downside as a drawdown, but you are only going to make 10%, that's not the bet that you want to take. So, I think we are in the camp which believes that probably the downside is 10% and the upside can be much higher than this. And hence, we think IT services is a great bet to start with. Okay, understood. Now you flagged off lots of factors as to why India didn't perform well. But now you're looking at it in hindsight.

[00:17:54] So, what are you telling an investor to do now? Did you say the time is to invest in India now? 100%. I think what has happened over the last two years is three, four things. First, what has happened is we've seen valuation corrections. Right? And we've seen time correction. So, now today that you and I talk, we are very close to what we've been on a valuation basis on the long term. So, our long term averages are very close to where we currently trade.

[00:18:22] One, you look at MSCI emerging markets, India weight. We are the lowest that we've ever been. Right? Which very clearly tells you that if you were at, if you were 20 plus percent of weight in MSCI emerging and now you are at 11%, which historically as far as I remember is the lowest that we've been.

[00:18:44] And if the global story does not play out and the Koreas of the world and Japan's of the world or probably the Taiwans of the world will start reducing in weight. Japan toh neye shayat. But we'll start reducing in weight. That weight will get reallocated to India. Third, if you look at price to book valuation of India versus globally, we are again available at the lowest valuation from an MSCI all market index standpoint.

[00:19:13] So, I don't see a reason why valuations are not in favor. One. Second, will FIIs come back? I think that's a hard guess to make, but I'm assuming that if FIIs moved out of India to chase a story that made them a lot of return and that story is not going to play out, they would want to start reallocating this money somewhere. And that reallocation, I will be surprised if it does not come to India because we are still the fastest growing economy in the world. Right?

[00:19:43] Third, very importantly, are domestic liquidity. You go back to 2008 and markets fell some 60, 67 odd percent in 2008 and the narrative then was that FIIs sold $4 billion worth of India equity. Rupee was 48.50 then. Right? Which means you are saying that FIIs then sold 20,000 crore and your market fell 60%. Yeah.

[00:20:06] You are getting 30,000 crore as SIP money every month in India. I think we are significantly discounting this. Because if this was not around, you would have really seen a bloodbath in India markets with respect to the kind of monies that FIIs actually sold in India. So domestic investors have kept us afloat to a great extent. Absolutely. Even if you look at only FI26 data, I think if I am not wrong, I think it is a little bit up. Yeah.

[00:20:33] But if I am not wrong, I think in March, April FIIs sold 1.5 lakh crore worth of India equity. Then in the month later, it reduced to 70 crores. Then a month later, it got down to 50 crores. Then in a month later, it came down to 35 crores. And as of now that we talk in July, we are probably outside of Thailand, the only country who has received FII money. We are positive. Whereas Korea has lost some 80 billion.

[00:21:01] Taiwan has lost some 30 billion. So I think there is a very clear trend that FII money is… I mean selling has come down significantly in FI26. We are amongst the only positive large country to have received FII money. Everything seems to be coming together for India to outperform. And I am hoping that probably from here on, India will actually see a rally that it has missed out versus the global peers. So the worst is behind us now.

[00:21:30] And is that what you are saying? Largely yes. Because even if you look at while let's say you and I are talking whatever number of companies that have actually come out with results in this quarter, right? The top line has grown at 24% Caggar. Right? That also tells you that the earnings are back. Now, all of us know that at the end of the day, markets will reward you if there are earnings.

[00:21:57] And if earnings are coming back, I don't see a reason why money will stop chasing earnings. Okay. So you are basically saying valuations, earnings are coming back, domestic flows have supported the markets and that's making a case for… NFI selling has gone down. Yeah. Okay. So tell us now if one were to go with this thesis, where should they be investing? What is the ideal portfolio allocation? Look, I will try and avoid stocks and sectors in general.

[00:22:26] But I'll tell you, let's say for example, if there is a retail investor who's looking at building a portfolio using mutual funds, what's the core thesis that you should have? Right? Here's what we advise all the investors that we manage and this is how my personal portfolio is also positioned. Suppose if you've got 100 rupees, try and make sure that at least 70 rupees is in India domestic equity. Okay. Okay.

[00:22:54] The remaining 30 rupees is spread across gold and US equity and specifically NASDAQ. Okay. This is our core portfolio for any aggressive investor who's got a 10 years of investment horizon and I'll explain to you the logic. Let's first talk about the 30% that goes into gold and NASDAQ. How much is going into gold? How much? Equally. Okay. 15% in gold and 15% in NASDAQ. Now why do we do this? And it is not just the last two years.

[00:23:23] You go back to my commentary five years, eight years back, I've been saying the same thing. Okay. This 30% brings you a very large advantage, which is that the Indian rupee has been depreciating at 4% each year. Which means that if you've invested this 30 rupees in both of these assets and both of these assets hypothetically make you 12%. Then in India currency terms, it has made you 12% plus 4% currency depreciation, 16%.

[00:23:53] One. Second, why do you need gold? Now everybody is talking about gold right now because it went up. You can't ignore it. Right. Yeah. But again, you go back to my commentary five years, eight years, 10 years back. I've always been a proponent that you should have gold in your portfolio. And my logic is very different. Suppose if you are an aggressive investor and you've seen 2008 market fall and then recover. You've seen 2013 market fall and recover.

[00:24:21] You've seen 2018 market fall recover. You see 2020 market fall recover. But as an aggressive investor, 99% aggressive investors that you will meet, you will always find that they are always 100% invested. Huh. Right? Yeah. So let's say if you are 100% invested and market falls 40%, your 10 crores becomes 6 crores. Now you will need sizable money to be able to average your portfolio in spite of you being confident that market will recover.

[00:24:49] But would you really have sizable money to balance a portfolio that has fallen 40%? Most people don't have this. Right? And by sizable, I mean not the monthly income that you're going to make because that's not going to average your portfolio in any way. That's exactly what gold plays as a role. So gold in the long term delivers you nifty kind of returns. So you've not gone down on returns that you will make on gold.

[00:25:14] But when such a situation arises, when you have a 2020, 2008, 2013, 2018, gold typically balances your portfolio. So your portfolio does not fall much. But imagine if equity has fallen 40%, but your gold has not moved at all or in fact given you positive returns. You remove money from gold and buy equity 40% lower, what's the alpha you will generate? Yeah. So in the long term... So it's your hedge? Absolutely.

[00:25:40] Without compromising on returns because it will still give you a nifty 50 return in the long term if let's say a 2020 or a 2008 does not happen. Okay. So 4% depreciation plus a hedge. Okay. Right? And without compromising on the returns. Now why have NASDAQ? Again, it's become absolutely clear. I mean, it's a non-argument at this point in time. Or why should you have?

[00:26:07] Because two themes that you want to probably you talk to anybody today, they will say EV is a great theme and AI is a great theme. And you will have instances... But is it just the FOMO factor? Is it just now becoming fashionable to say have global allocation, have exposure to the NASDAQ? It is fashionable. But I will tell you, it is fashionable when you say I have exposure to South Korea. It's fashionable when you say I have exposure to Nikai. It's fashionable to say I have exposure to Taiwan. Because...

[00:26:35] But don't you think that when you say global exposure, it's not just the NASDAQ. It's not just TV. It's not just AI. It's so much more than that. That is exactly what I really want to break as a myth. But if you say that, please understand, and you can go to the best of the guys who have spoken on the TV for decades together. Right? Korea, Taiwan, Japan, Europe, right? has never made money for investors. Yeah. If you remove the last two years.

[00:27:06] Okay? Yes. If you remove the last two years. Yeah. Now, this is in the hindsight advantage that let's say in the last two years, AI played out and these guys benefited out of AI. So, you're saying it's a one-off what played out in the last two years. 100% it's a one-off. You look at... Let's say you look at South Korea. Now, you might disagree with me, but let's say if South Korean market gave you 150% return, how many people know the third stock in the South Korean market?

[00:27:33] And I can guarantee you 90% people don't know the first two stocks also. But two stocks are 50% of the weight of the index. Are you really investing in the index? Right? You're not investing in South Korean economy. You're investing in two stocks. Okay. Right? And that's the danger. 100% a danger. Okay. Right? Because how would you have an index for 33% in a month? Yeah. Okay.

[00:28:03] And how many people really have the foresight? Right? Now, if I go two years back and I throw back this question at you, how many people really visualized that Korea will do what it did? But now when you saw the Korean markets go up is when you are investing, but you're too late. Because a 33% fall is equivalent to 66% rise. Yeah.

[00:28:29] So you in short loss 66% of rise, not 33% of fall. Okay. So it's fashionable to say, and I can tell you this, forget outside the US, name five companies that people know in Taiwan, name five companies that people know in South Korea, name five companies people know in Latin America, five companies that people know in Brazil.

[00:28:53] It looks very good to come on the internet and talk about it saying that, oh, you missed the global rally. Indians only invest in the Indian stock market. They don't understand global. The fact is most people don't understand global. Right? Everybody is a hindsight guy today. Right? Okay. Okay. Sorry. No, no, no. Go for it. Sorry. I'm extremely passionate about this subject. Go for it.

[00:29:21] Second also is that there are so many challenges to invest in the global markets. Yeah. How do you invest in the global markets today? ETFs are trading at a premium, if at all. Yeah. One argument. Second, mutual funds have stopped taking new money. GiveCity has its own challenges with respect to taxation. You also have a TCS if you invest more than 10 lakhs, if I'm not wrong.

[00:29:48] You have for let's say H&Is and all, you have a limit of how much can you do outside of India. There is a tax issue in terms of reporting. So, but then why do global investing at all? Correct. So, now let me come to what I was answering. So, out of 100 rupees, you have 70 in domestic equity. 15, I explained to you logic for gold.

[00:30:13] 15 in NASDAQ because probably US is the only market, if you leave the last two years aside, US is the only market in dollar terms which has done better than India over the last 25, 30, 40 years. Okay. Right? Every story that you see play out in India, in global markets today, all of those guys removed the last two years, are nowhere close to India returns even in dollar terms.

[00:30:40] But then you had the AI argument when it came to other markets like South Korea, Japan, etc. Wouldn't the same hold true for US, NASDAQ? Perfect. Which is why I said 25 years. Okay. And the data is still proving it. Absolutely. Which means that US has always been on the forefront on all technological advancement that have happened. But that's not the case with South Korea or Taiwan that has happened, right? Okay.

[00:31:06] So, if you want to play stories that India is not going to be having an advantage on and you will only want to play global, then you play NASDAQ where you even understand what's happening. Right? There are 50 company names that I will take and you will have heard of 40 of them because you and I see that in the real world. So, the point that I am trying to make is you get 4% advantage of rupee depreciation, you get diversification,

[00:31:36] you end up playing themes that may not have exposure in the Indian markets, and you are still playing an index which has a historical track record of being able to make money for investors in all technological advancement and not just the last one, which is the case with all other markets that have played out. Okay. US has ridden the wave, the NASDAQ has ridden the wave in all technological advancements and that is your argument with respect to that. Okay.

[00:32:06] So, now that we are saying 70% domestic equity for an investor, if I were to take a young investor today, is it the safe route? Is it going, is it stock picking? Is it just sticking to your safe mutual funds? Does it depend on the profile of the investor? So, of course it depends on the profile of the investor, but I still have to give you a generic answer. I would say stay away from stock picking and try and stick to a portfolio which is going to do much better for you over a period of time.

[00:32:37] So, coffee can investing was such a popular concept when it became popular on the internet, right? Now you see likes of HDFC, Kotak Bank, Asian Pains, D-Mart, ITC and the list goes on and they've made no monies for investors in the last five years. Whereas any and everybody who's hearing us would have heard of these names. Yeah. So, stock picking is not very easy like people like us make you believe on the internet. It is not and that's the fact of the matter.

[00:33:03] So, you would want to do portfolio investments which is a great way to do this by deploying it through let's say a PMS or an AIF or a mutual fund. Mutual fund is great because it does not have a minimum ticket size and it has a huge advantage in terms of taxation versus let's say a PMS. But let's first come to the core strategy.

[00:33:24] So, if I were very young, I would before moving to the core strategy, I would tell you two, three things that I've seen that the younger audience typically makes as a mistake. First, if you are young, try and make sure that you don't do the traditional investments of investing in let's say a fixed deposit or investing in a life insurance policy. These are big numbers. Are they even doing that right now?

[00:33:54] So, these guys are very smart and thanks to the internet and the social media in general, there is so much of awareness being spread. And the Gen Z audience is extremely smart. But if there is somebody who's watching us and still doing the mistake, I think they should take this cue. Okay, that's a mistake. Second is make sure that you are not under invested.

[00:34:18] Now, what do I mean when I say under invested is that let's say you are making a lakh of rupee a month and you are going to do a 5,000 rupee SIP that's not going to solve any problem for you in your life. So, if you are making a lakh, how much? I wish I had an answer to the question. A box or like how much percentage? I would say 30%. Okay. But this number will completely depend whether you stay with your parents, you stay on your own, do you have an EMI, do you pay a rent, right?

[00:34:46] But I would really urge the younger audience to do at least a 20-30% a month. Okay. Third, another big problem is let's say even if you've solved for this where you are saying that I have a lakh of rupee a month that I do that I make as income and I do 20,000 a month. But if you stick to 20,000 a month and your salary is gone to 20,000, 2 lakhs a month and if you still do 20,000, you're not solving your problem. Yeah. So, don't be under-invested. Yes. Don't be under-invested.

[00:35:15] Step up every year when your income goes up. Okay. Right? Because a lot of people keep saying this and I've read this commentary on the internet saying here my salary goes up only a very little. How do I step up my SIP? I want to give you a math that a lot of people don't really understand. Let's say if you're earning a lakh of rupee a month. Okay. Hypothetically. And your salary goes up by let's say 5%.

[00:35:43] Which means in absolute terms your salary has gone up by 5,000 rupees. Okay? Yeah. Now if you are doing a 10,000 rupee SIP, a 10% step up is 1,000 rupee. So, you might feel that my salary has gone up only by 5,000 rupee. How do I do a 10% step up? In absolute you are only doing 20% of how much by which your salary has gone up. Gone up. That argument is not real. Okay. Right? Now having said that, coming back to how do you split this 70 domestic equity.

[00:36:13] Now if you are somebody who thinks that you are aggressive as an investor, you have 8-10 years of investment horizon. For an aggressive investor, what our model portfolio looks like is an equal split between large mid and small cap. Okay. Now first I will give you a logic as to why. Will a retail investor be able to figure out, will a retail investor be able to figure out what will work in the next three years? Will large cap, small cap, mid cap will work? The answer is no.

[00:36:42] So the best way to diversify is have all three of them. Okay. Another logic wise, if you look at the last 25 years of an equal weight performance, 100 rupees split equally between large, mid and small. Data shows that the risk which is measured as standard deviation is very close to large cap. But the return is very close to mid cap. Oh is it? So what you have built as a portfolio has large cap kind of risk but mid cap kind of return. Okay. Now you go a step further.

[00:37:12] And that step further is that when you do large cap investing, try and invest in mutual funds who follow value style of investing. Okay. And I will explain this to you. When you do mid cap, invest in mutual funds who do momentum kind of investing. And when you do small cap, invest in funds who do growth style of investing. Now let me explain to you why do I say this. India is not US.

[00:37:39] You are not going to have Indian large cap companies spending so much of money in R&D that their market cap from 2 trillion will become 4 trillion like it happens in the US. In India expecting a large cap company to grow anything more than 12-15% is too much to ask for them. Yeah. Now if in such a situation, if you buy them at any valuations, will you really make money? The answer is no. And I told you what happened to an HDFC or a Quotac or an Asian Pay into an ITC.

[00:38:07] So in large caps for you to really make money, you will have to invest with fund managers who do value style. They buy stocks when they are at the right valuation and not buy them at every valuation. Okay. So play the large cap theme through flexi cap mutual funds and invest in funds who do value style of investing. Now let me take small cap first. In small cap when you invest, you don't want a fund manager who is thinking valuation.

[00:38:36] You want a fund manager who is thinking valuation with growth. Okay. Right. So you want to pick a fund manager who says, okay, the valuation looks fair, but the opportunity for this company to grow the top line bottom line is much faster than the other company, which probably is 10% cheaper in terms of valuation. Because when you invest in small caps, you want those companies to become multi-baggers. You don't get multi-baggers with value style of investing. Yeah.

[00:39:07] You get multi-baggers with a growth mindset. So when you invest in a small cap, you invest in a fund manager who has the growth mindset. Yeah. And when you do mid-cap, the reason why I say choose fund managers who do more liquidity momentum kind of style is because this space has a very large advantage slash disadvantage.

[00:39:30] If you go back to 2018 SEBI ruling around market cap classification. They said first 100 stocks are large cap by market cap. Next 100 stock, which is 101 to 250 are mid-caps. 250 and below, another 250 are small caps. Okay. These 150 stocks are the only 150 stocks in the mid-cap space where the money will go. Okay.

[00:39:58] And if you dissect how much money is coming into mid-caps through SIPs. Okay. You will understand that there is a very, very large set of money that is getting chased in mid-cap investing through mid-cap funds, through large and mid-cap funds. And these guys have no other option but to deploy this money only in 150 stocks. Okay.

[00:40:23] Which is why you see since this has happened in 2018, your mid-cap index has done better than small cap. Yeah. Which is surprising, right? Because you ask anybody what will do well in the long term. Will small caps do well or mid-cap do well? The general answer you will get is small caps, right? But look at what has happened over the last eight years when this ruling came out. Your mid-cap has done a 2.5-3% outperformance to the small cap index exactly because of this logic. Yeah.

[00:40:53] So you would want to invest in the mid-cap space with fund managers who have this mindset that they will chase liquidity and do momentum. Yeah. So if I can sum this up because sorry I spoke too much. No, that's what we want. If you have 100 rupees, 15 rupees in gold, 15 rupees in Nasdaq, the remaining 70 will get equally split between large cap using flexi cap in value style of investing, mid-cap in momentum style of investing and small cap in growth style of investing.

[00:41:23] Okay. That is what should be your style of investing if you have a 10 years of investment horizon. Okay. So you're very clear about that. Now, you know, Ketan, you've spent your career sort of translating personal finance for a generation who would rather learn from a reel than actually learn from a textbook. There is that perception that yes, Gen Z is super sharp, but are they really saving? Are they really putting their money where their mouth is? No.

[00:41:50] There is that perception that Gen Z, yes, they are very sharp, but are they really saving the way the traditional investors used to or maybe the way we used to when we were younger? What myth do you want to bust about Gen Z when it comes to saving? I think the Gen Z community is much smarter than you and I are. Let me tell you this. Okay. Because if you and I, when we were 21, 22, 25, I don't think most of us had this concept of wanting to invest in the equities market. Yeah.

[00:42:19] Because for us, the dependency on where this money will get invested was our parents. Yeah. And our parents thought process was life insurance, FD, real estate, gold. Playing it safe. Yes. That's traditional. But I think thanks to what has happened through social media and specifically after 2020, when a lot of people came to the internet, started talking about how investing really needs to be done. Even COVID. Yeah. Yeah.

[00:42:45] I think the Gen Z today really understands that first they have to invest. Second, they understand that they will have to take the equity route to be able to make wealth over a longer period of time. And I think very importantly, they also understand that equity markets are volatile and they will have to be long term investors.

[00:43:05] Of course, you will come across a lot of people who were probably FD investors and of sorts who broke their FD, came to equity markets because they saw the rally, everybody making money and they were not able to make money. Those people are the ones that really does not have the discipline to understand that the reason why equity markets will make you probably twice of what your FD is making because it has volatility. Okay. And if it didn't have the volatility, why will it give you twice the return of an FD?

[00:43:35] So I think millennials who broke their FD and came to the markets are the ones struggling. But I think that Gen Z is doing a great job. But then there's the other, there's a flip side of it. I mean, they are, you're saying of course more aware social media has changed the landscape. But then there's a lot of advice that's been given by people who are not certified and investors can really get their fingers burned. So is that happening a lot? 100% happening. And this FNO trading, we've seen a lot of young investors.

[00:44:05] SEBI has tried to come down hard. 100% happening. Yeah. I mean, I can tell you so many instances where I know that when I'm on Instagram because I make content on Instagram and I hear somebody very influential talking about certain things, on the, on the internet and I'm like, what the heck is he talking about? Yeah. Right. And this is definitely happening.

[00:44:29] And hence my advice to people who probably get influenced by, by people on the internet is first, don't go by following. Does not mean that somebody has got a following means that this individual is smart. Okay. Following can happen for various reasons. Yeah. Then how do you identify whom to look for on the internet? I think I can give you two very simple data points that you can look at.

[00:44:56] First, how much real life experience does this individual have? And you will understand that most people on the internet that you see have all actually born on the internet world post COVID, right? With absolutely no practical background about capital markets. So, two things that I would urge people to look at is first look at, look at educational background of the individuals.

[00:45:24] Are they people who've actually educated in the world of finance and then they coming and talking to you? And even more important, even if they're educated, have they really spent time in the industry doing what they are talking of on the internet? What about being SEBI certified? Is that okay? So, there are 100% a yes, but in the SEBI certification there are multiple layers. Okay.

[00:45:49] And it will get really complex for people to be able to decipher that because they would not know what is a yes or a no on the internet. So, that's not your 100% go to for somebody. So, you might have people who have had 15-20 years of work ex in the similar industry and they are educated. They may not be SEBI certified, but that does not mean that those guys are not good on the internet. So, I would say look at all of these three things. Okay.

[00:46:18] What about, you know, these first-time investors? I think for the first time ever, Gen Z has taken of the millennials as India's biggest crypto investor group. Is that a smart thing for them to do? Look, if you personally ask me with whatever little experience that I have in the industry that I am in, I would rather suggest that don't walk that path.

[00:46:42] Have a small part of your investment aligned towards probably crypto is no problem, but getting too much of exposure to crypto is a big no in my opinion. There are multiple reasons why I say this, but the top reason that I say this, specifically sitting out of India, we've seen first, first, I really think that people don't really understand why are you buying a Bitcoin or an Ethereum or whatever else that you're buying.

[00:47:13] Do you really understand why you are buying what you're buying? And the answer in my opinion is a big no. I think the only reason why crypto as a story is sold to you on the internet is saying that it has multiple use cases and in my opinion it has no use case. Do you really think that any central bank globally is going to allow them to become a real mode of exchange?

[00:47:40] My answer would be no. And I'm happy to be proven wrong in the future, but my answer today is a no. So if they don't have a use case, why are you investing? One. Second, India as a landscape. We've seen multiple, and not one or two, multiple apps go bust, scams happen, people have lost money. The government has not come out and ever said that, let's say crypto is illegal.

[00:48:07] But if you see all the policy actions, it's very clear that the government is not very comfortable you investing in crypto, right? Because if they charge you a 1% TDS on every transaction that you make, or make it so difficult for you to be able to file returns for the crypto transactions that you've done, it's very clear that the government is not comfortable in what you're doing. Fourth, if you see RBI has been of the constant opinion that they should ban cryptos.

[00:48:35] So if the regulatory environment is not very comfortable, why do you really want to get involved into something? So I think, but look outside of all of these things, if you understand what you are doing, do whatever you want to do. Okay. If you don't understand, don't do anything. Okay. The narrative unfortunately is that because Bitcoin has generated returns, let me invest. Returns can come. The formal factors are not going to work. Don't do that. Okay.

[00:49:04] Now, but what about an investor who's Gen Z? You know, say they're working multiple things. They've got a side gig, they're making money somewhere. And they say, hey, investing is not for me. I don't understand so much of it. I don't even know where to start. What is the best advice that you have for them? So I think, look, and I've said this multiple times, and I really want to reiterate because I'm assuming that the audience here watching us is very different. And I want them to know this.

[00:49:31] If you've got your first salary, everybody like me on the internet will come and tell you, go start investing. I think that's a wrong step. You don't start investing. Investing is not the first thing that you do. The first thing that you really do is risk management. And I'll tell you what do I really mean. Please understand that in investing, why do you make returns or how do you make long term wealth?

[00:49:56] In my opinion, there are three components that come together so that we are able to make long term wealth. First is how much are you investing? Second, how long are you investing? Third, how much return are you going to make on this investment? Okay. Now suppose if I ask you what out of these three things is in your hand? Then I would say what is in your hand is how much can you invest and how long can you invest? What is not in your hand?

[00:50:26] How much return will you make? But now do you see the flip side? Everybody in investing wants to do what is not in their hand. Yeah. Is trying to generate higher returns, which is why people cannot make wealth by investing in the capital markets. Biggest problem. Yeah. Now if this is the formula of making wealth, which is how much do you invest? How long do you invest? And how much return do you make? And return is not in your hand.

[00:50:52] Focus on what is in your hand, which is how much do you invest and how long do you invest? Right? Now you understand why everybody who's made money and people who are very big in the capital markets keep telling you that discipline is the only way you will make money. Why? How much do you invest and how long do you invest? Discipline. So for you to make wealth in the long term, you will have to be disciplined. That's the whole funda.

[00:51:21] But if you've not taken care of your risk management, you cannot be disciplined. And let me explain to you what I mean. Let's say if you don't have six months of your living expenses kept aside as emergency corpus and you lose your job. Will you have the discipline to continue? No. Let's say you don't have a health insurance. Yeah.

[00:51:44] Or you have a very little health insurance because you think that the corporate that you are working for has given you some two five lakh worth of health insurance and you are taken care of. So, India, 99% of India is one hospitalization away from bankruptcy and I keep saying this again and again. Today in India, hospitalization cost is increasing at 18% inflation. Yeah.

[00:52:09] If you are in a metro, don't be surprised that your hospital bill is going to wipe off most of your savings when it happens. Yeah. You need a health insurance. Yeah. So, unless you don't have a health insurance and a sizable one and you don't have an emergency corpus, you will never be disciplined because whenever any of these things happen, the first thing that you will do is stop your investment or remove money out of your investment. Yeah.

[00:52:40] So, get these two things in place then start investing. So, get your risk management in place which is how much to invest for how long and get your medical insurance in place. Absolutely. Okay. Before you start investing. Absolutely. And I will tell you something, people don't… see because they are not educated in this field, they don't understand how cheap this is. Yeah. Okay.

[00:53:00] A 21-year-old wants a 10 lakh rupee cover is available at 6,000 rupees a year. Yeah. Okay. There is something that you get called super top up which means that you will get a 90 lakh cover for another 5-6 grand.

[00:53:24] In a 10-11 thousand rupees a year, you can actually be covered for a 1 crore of medical insurance. But Gen Z is probably saying I am young, I am fit, why should I put money from my precious little pie into something that may hit me when I am 50 or plus. It's unfortunate that people think that they will not die or they will not have hospitalization. And I don't have an answer to that question. Yeah.

[00:53:52] But the only submission that I really want to make is that even if you are walking on the road and somebody hits you, right? And I am sorry I am saying this but that is hospitalization. Yeah. Right? Now, of course, there are multiple elements to this of a personal accident and all of that and I am not going into that. But the point that I am trying to make is that you don't know what you don't know. Yeah. So protect that.

[00:54:22] What about this thing about Gen Z that they have, the new trend, where they want to retire max. I want to retire earlier than before. I want to spend time following my passion, do things that I enjoy. So say there is someone who has that dream. What do you want to tell them? I will tell you, I manage a lot of investors who have a very similar dream of wanting to retire at 40, 45. Yeah.

[00:54:49] And we have had multiple cases where people have retired and then gone back to starting to work again. So let me tell you what the real problem is. The real problem is not money. Yeah. Because today everybody on the internet talks about the fire number. Yeah. Right? Achieving that fire number for somebody who really wants to achieve it is not a problem. The problem is what do you do after you've achieved your fire number? What I mean by that is most people...

[00:55:18] Break it down for people who don't know what fire number is. So fire is a very simple number that tells you that if you have this, you are financially independent. Right? Now do whatever you want to do in life. Yeah. That's the fire number. Okay? But the biggest problem with people today is that, let's say, if from your age of 21 or 25, whatever that age is when you actually started making money,

[00:55:45] you've struggled and worked extremely hard for 20 years of your life to be able to hit that fire number. And you have that fire number now available. Do you know what you are going to do when you're not going to do anything sitting at home? Yeah. People who have not experienced this will not realize what I'm saying today, but I meet with investors who are in this phase and I can tell you with my first-hand experience.

[00:56:11] It's not easy to say that, you know what, I have a passion and I'm going to follow that passion. Either passion does not keep you occupied for 10 hours a day. Yeah. Where you worked for 12 hours a day for 20 years of your life, that fire number does not solve your purpose. Yeah.

[00:56:28] So, for 20 years, when you're trying to reach that fire number, please make sure that you also have this passion of doing something that can keep you occupied for 10 hours. Yeah. Because if you're not occupied for 10 hours, that fire number is only a math that solves no problem. But they say, oh, I want to go to Bali, retire on a beach, swing in a hammer all day. I think that's rubbish, right?

[00:56:56] If you really want to do that, your fire number is going to become unachievable. Yeah, absolutely. What about GENs, your younger people or anyone now with the use of Gen AI saying that, hey, why should I spend money and pay someone? Why don't I have AI build me my financial model, give me the advice, tell me what to do? What's the risk of doing that?

[00:57:18] I think it is easier said than done because in all honesty, wealth creation is 80% behavioral and 20% sophistication. I wish you started with this. Yeah. I've been in finance and banking and wealth management for a good 19 years. And I can tell you with all my experience, it is less about being able to select the right scheme.

[00:57:47] It is all about making sure that you stay invested when the tide turns. Yeah. Most people will not be able to do this. And if you're not going to be able to do this, let's go back to the original thesis that we were discussing. Where's the discipline? Yeah. So you are trying to draw a conclusion assuming that I was doing my math at 12%, but I'm only doing 5%. I was better off doing a fixed deposit. Yeah. Right?

[00:58:16] And you are trying to control the uncontrollable, whereas what you should be controlling is how much do you invest and how long do you stay invested. You're never going to be able to make wealth. You talk to anybody who's been investing for the last 20 years, 30 years, and they will tell you that irrespective of how smart I was, I made money because I stayed invested. Yeah.

[00:58:44] So if you are going to think that you know it, you will never be able to make money. Yeah. And I'm not saying this independently you speak, anybody who spent 20 years in the industry will tell you exactly the same thing. Yeah. Which AI will not be able to solve. Yeah.

[00:59:02] So look, AI is great to start with, where AI will help you understand basic stuff, macro level understanding, but interpersonal behavioral management is 80% of wealth creation, which AI will never be able to help you with. Yeah. And like you said, maybe for the understanding part of it, sure, but not with the behavioral. Let's talk about another age group, those who are in their late 30s, 40s.

[00:59:33] Education for children, that's a big one. Medical inflation, cost of living has gone up significantly. What should their ideal portfolio allocation be? Or is there a different set of rules you have for them? So I think most people, I would say, should keep this in mind that whenever they start investing, they should always invest keeping a goal in mind. Okay. And why do I say this?

[01:00:01] Let's say I am extremely aggressive as an investor. I have, I have seen the ups and downs of the markets. And I know if markets fall, markets will come back in. But does that mean that I will invest in small caps if my goal is just two years away? The answer is no. So your risk appetite is good on one side, but risk appetite is useless if you don't link it to a goal. Okay.

[01:00:27] So irrespective of your age bracket, the idea is understand how close or far your goal is and then understand what your risk profile is and marry them together. Okay. So what I mean is that even if I am the most aggressive investor, but if I have two years, I am better off doing a balance advantage fund than doing a small cap.

[01:00:53] If I'm a risk ever investor and I have a 10 year investment horizon, I am better off doing a balance advantage fund than doing probably a mid cap or a small cap just because I have 10 years of investment horizon. So you marry your risk profile and your time horizon, which is your goal, and then come to conclusion of what do you want to do as investment. Yeah. I think that's the best answer irrespective of the age bracket that you are in. Okay.

[01:01:22] And then another, you know, trap that people seem to get stuck in is this buy now pay later sort of a thing. You know, where do you really need to draw the line between smart leverage and a debt trap? Look, leverage is great. And a lot of people like us typically will not, will come and say exactly the opposite thing. Right. But I think leverage is absolutely great. Provided you've taken the right leverage. What do I mean? Let's say I want to buy a five crore house. I have five crore available today.

[01:01:53] What do I do? Should I pay the five crore and buy the house or do I take leverage? I should absolutely take leverage. Why? Is because if I am getting leverage today at 7.1%. And if I can invest that money and make 12-14%, it's a no-brainer that I'm going to be seriously benefiting taking leverage versus not taking leverage. But having said that, do I go mad in taking leverage?

[01:02:22] The answer is no. Which means that if I don't have the monies and which is why it is said that banks lend money only to people who can repay or who have the money. Banks never lend money to people who don't have the monies. Right. That's the whole logic. The logic is that if you can't afford something, don't take leverage. Okay. Take leverage only when you can afford it. Okay. That's the right answer to all questions to do with leverage. Yeah.

[01:02:52] Take leverage only when you can afford it. What about rent? Because I mean, whether it's Bangalore, Delhi, Mumbai, it's increasing year on year. Entry level salaries have barely moved. So, you know, when rent alone is eating say a third of your salary for someone who's younger, how do you even have the bandwidth or the remainder to invest? So I think that's a catch 22 of should you buy a house, take a rent and all of that. I will give you a practical answer.

[01:03:22] I will give you an emotional answer. Before I even start talking about it, let me tell you, I have a house. Okay. Now, the argument is pretty simple. Right. Because mathematically, you know for a fact that renting is much better than buying a house. Why? Is because forget about some pockets in metro, but in general, you will get a house at 2% or 3% of the value of the house.

[01:03:50] Which means you have a, if the house is worth a crore, 3% is 3 lakhs. You will get the 1 crore house at 25,000 rupees a month as rent. Why would you take a 7.5% loan to live in a place where you can take the same place at a 3% cost? You might as well invest that remaining money at 12% and make sense from a financial standpoint.

[01:04:19] Now, this is a practical argument. Right? Let me give you an emotional argument. The emotional argument somebody like us would have is, let's say for example, I've been able to figure out what I'm doing in life. I have parents who don't want to move out of where they've been born and brought up and we've stayed for so long. Yeah. And I've cracked the code of life in general. Then I would might as well take a house because I know my career is stable, my personal life is stable, my family life is stable.

[01:04:49] Why stay in a rented house which will keep moving 11-12 months and do all of that problem. But, what's the solution then? Yeah. So, I'll tell you what the solution in my opinion is and I can tell you what I've done. When you are very young, don't buy a house. Why? It's because when you are very young, first, you've not cracked your career. When you've not cracked a career, you might tomorrow get a job in Bangalore, then in Gurgaon.

[01:05:17] Then there is no point paying an EMI at one place and you are going to keep moving around. When you are young, your salary is very low. And if your salary is very low, then EMI as a percentage of your salary is very high. You will compromise on your lifestyle. Yeah. Third, your risk taking ability will drastically go down. Yeah. Because if you've taken a loan, right? And if that is a headache that you're going through, will you be able to take risk in life? Yeah. No. So, when do you then take a house?

[01:05:45] You take a house, when you spend 12, 15 years working, you crack the code of what do you want to really do in life? You are stable in terms of employment. Yeah. Your salary has gone up, which means the percentage of your EMI versus the salary will be in a proportion that you will not be able to, you will not compromise on your lifestyle is when you buy a house. Okay. So, that's the right approach in my opinion. Okay.

[01:06:12] So, that's the latest when you are talking about leverage. Take leverage if only if you can afford it. Now, gold, some would argue that yes, there was a lot of buzz around it, but it's fallen 30% from its peak. So, what's the argument here for gold now? I think you will have to understand why did gold really go down and what's in it for gold. Our view is that at these levels around $4,000 in the global market, gold is a great buy.

[01:06:39] Of course, we have a view that gold may drop up to $3,600 and hence stagger buying gold over the next three to six months. But I think we are bullish on gold at these levels and I'll tell you why. So, if you go a little back to March, 2026, since when gold started falling, gold fall got triggered when central banks sold some $26 billion worth of gold. It was specifically two central banks. Actually, the number is 30 billion. Turkey and Russia.

[01:07:09] So, Russia sold gold because they have an ongoing fight with Ukraine that they wanted to fund. Turkey sold gold because Lira significantly fell and they wanted to better the currency situation that they were in. So, the trigger to gold falling was central bank. But if you have to go back a little, I think the biggest thesis for why gold will work in the future is de-dollarization.

[01:07:33] And this argument started since the Russia-Ukraine war happened and Russian forex reserves got frozen and all of that. But I think this argument is here to stay and will continue. To give you a data point of why I believe that this argument and the data, I mean this will continue,

[01:07:52] is first, if you look at the last two years specifically and the latest reports say that global central banks put together have reduced their dollar reserves and increased their gold reserves. So, global central banks had 25% of their reserves in dollar-denominated assets which have come down to 23%. And gold was at 20% which has gone up to 27%.

[01:08:18] Now, of course, the argument can be there is some element of mark-to-market because gold went up and treasuries in dollar terms fell. But there is a significant buying also. You look at China has been continuously buying for the last 20 months. You look at all other central banks including India has been buying. And if you look and if you ignore the March data that came out, from April, the buy number is again out.

[01:08:42] In April itself, Chinese central banks bought $10 billion worth of gold which was the highest in the last 20 months that they have done. So, I think the biggest argument is de-dollarization. The world is going to move away from dollar and till the time they figure out where and what is the next currency, gold will continue to benefit. Second, our near-term argument is that probably capital markets are expecting interest rates to go up in the US.

[01:09:09] We don't really think interest rates will go up. And my argument is pretty simple. Today, US is at $39.6 trillion of debt that you and I are discussing. At 5.17% on their 30-year mortgage today, assuming, and just to explain to people.

[01:09:30] If I put the $39.6 trillion debt that they are sitting on and everything is the 30-year debt just for explanation purpose, they'll have to give out $2 trillion in interest every year. This number was $400 billion in 2006 when was the last time the US hit 5.17 on the 30-year bonds. The actual number on the treasury interest payout is $1 trillion. But this was just to explain.

[01:09:58] If interest rates go up, the US is going to be in a big mess. And I don't really think interest rates in the US will actually go up. And which is why our thesis also is that geopolitically their war with Iran will kind of stable because every time we've seen yield hit this high number or crude cross 100, Trump will again go back and say, okay, let's come back to the negotiation table.

[01:10:23] So we don't really think interest rates are going to go up. So thesis is very simple. We think de-dollarization will continue to happen. We think rates won't go up. And we think that geopolitical problems are here to stay. And all three will benefit gold. So we really think gold is a great opportunity to keep buying now.

[01:10:52] And what about the fact that you said that right now mutual funds is the way to go avoid directly playing with stocks. So what should be the ideal allocation and what kind of mutual fund? So like I said, that typically try and make sure whatever you are doing to India equity, split that equally across large, mid and small. So in the large, don't play the large cap because you have two ways to play the large cap story. Either you play the index or you play large caps using flexi cap funds.

[01:11:22] So that's how that's what you do in the large cap space. In the mid cap space, either you play the mid cap index or you play the active mid cap funds, or you can also play the multi cap story in the mid cap section. And in the small cap play small cap active funds, huge opportunity to be able to make alpha. That's where you should really align yourself when it comes to selecting which category in the mutual fund space you should invest in.

[01:11:51] Okay, Keetan, this has been so eye opening. But before we let you go, we've got a quick rapid fire. Okay. Okay. So a first time investor say has about 10 to 30,000 rupees to invest. Where should they invest? Equities. Okay. One financial habit that matters more than the amount that you invest. You should ideally spend less than you make. I think that's the that's the ultimate truth. Golden rule.

[01:12:17] How much should a first time investor start their SIP with typically? 20-30% of the income that they are making. Okay. What's the biggest worry for investors right now? Is it Trump tariffs? Is it inflation? Is it what's going on globally? I think it's their own behavior that markets have not made returns for the last two years. Should they continue? Hell yes. Debt fund or gold? Gold. Okay. Complete the sentence. The India story in the next 20 years will be?

[01:12:47] Fastest growing economy in the world. Okay, great. So on that very positive note, we'll let you go. Thank you for joining us today. Thank you so much for having me. What a great podcast that was. I've got so many notes down about what we've really learned today when it comes to investing in particular. Yes, India valuations were high. We missed the AI opportunity. The global yields were up, but things are turning for the best. Valuations have now settled. Earnings are coming back. You've got domestic flows and now FIIs as well are selling less.

[01:13:15] So it is time to invest in India. The ideal allocation should be out of 170 domestic equities and then divide the remainder 30 equally into gold as well as into the NASDAQ US equities. Stay away from stock picking and invest in mutual funds. Ideally, PMS, AIFs is another route. Don't go for the traditional investing like insurance and FDs.

[01:13:40] It is interesting to learn that Gen Z is very smart when it comes to investing, but don't get trapped by people who have lots of followers. And crypto, if you're looking at that asset class, make sure you understand it. Risk management, over investing, that's the most important, especially for first time investors. Medical costs will really wipe you out. So make sure you have a solid medical insurance and wealth creation. Well, 80% is all about behavior. 20% is about your intellect.

[01:14:10] So stay invested even when the tide turns. I certainly hope you enjoyed watching this episode as much as I did listening to Keetan. Do remember to like, share, comment and subscribe to the channel.