In the world of investing, when we speak of investment psychology, most people assume success depends on complex models, spreadsheets, and precise predictions. Ashish Somaya — CEO of White Oak Capital and a $7Bn AUM fund manager — debunks that notion.
In a candid episode of The 1% Club Show, he explains that investment psychology plays a bigger role than equations. “The math is simple. It’s the emotions that are hard,” he says.
With 25 years in India’s mutual fund industry, Ashish shares how long-term thinking, discipline, and smart asset allocation can help investors ride market volatility — and why India's next 25 years could be its most transformative.
Why Psychology Matters More Than Projections
“Making money in the markets is less about mathematics and more about psychology,” Somaya insists. He highlights how behavioral economics — not advanced mathematics — won Nobel Prizes twice in the past two decades. This proves that irrational behavior, herd mentality, and short-term panic often drive investor decisions more than logic.
“It’s not about being greedy or fearful. The key word is others — behaving differently from the herd is where outperformance lies.”
He compares market corrections to a compressed spring — the tighter it’s pushed, the more forceful the rebound. The challenge? Most investors panic at the bottom and get euphoric at the top.
Rollercoaster Emotions & Rational Allocation
Somaya links the market to a rollercoaster ride — thrilling on the way up, terrifying on the way down. During bull runs, optimism blinds judgment. During crashes, fear clouds logic.
He further notes that salaried professionals often invest conservatively despite having fixed incomes. In contrast, entrepreneurs — who already deal with business risk — tend to double down by taking on even more market exposure or borrowing.
So his advice would be to match your asset allocation to your risk profile and life stage, not what others are doing.
SIP Strategy in 2025: Fixed, Flexible, or Tactical?
Another talk of the investors that is lingering in the market today is on the SIP vs market timing debate. Here, Somaya offers a layered strategy:
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Passive SIPs: Best for average investors. Automate monthly contributions, ignore volatility, and let rupee cost averaging work its magic.
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Tactical Reallocation: For informed investors, observing macro indicators like FII activity, bond yields, or market valuations can signal when to rebalance.
“If your ₹10L portfolio becomes ₹20L in three years, take some gains off the table. Reallocate into fixed income or cash. Stay liquid when markets are euphoric.”
Still, he cautions: “Don’t try to pick bottoms or tops. Focus on trends and base rates.”
Market Corrections Are Buying Opportunities
Somaya draws on past events — the 2008 crash and the 2020 COVID dip — to illustrate a key point: “There are only two views: Either the world ends, or it doesn’t. If it doesn’t, the market will recover.”
In March 2020, when markets dropped 40%, he advised clients to keep investing. Those who stayed put — or added more — saw massive gains over the next year.
Furthermore, if Ashish has to answer how to manage your portfolio during market corrections in India? It would be to keep investing consistently, build cash when markets rise, and deploy during panic — not with predictions, but with preparation.
Real Estate vs Equity: Why He’s 50-50
Somaya takes a contrarian stance compared to most mutual fund executives: his personal portfolio is 50% equity and 50% real estate — heavily tilted toward commercial real estate.
Why real estate?
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Leverage Advantage: With ₹3 of his own capital, banks fund ₹6–₹7 — a powerful way to build assets.
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Rental Income Covers EMI: His properties are self-financing, making them passive income generators.
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Inflation Hedge & Appreciation: Real estate, when bought in down cycles, delivers both cash flow and capital gains.
“Real estate is productive capital — not just a safety net. But only when you buy in Grade A locations and plan long-term.”
Understanding Yields and REIT Alternatives
Somaya breaks down the yield mechanics of real estate: “If 10-year bond yields are 7.5%, commercial property should yield 8–9% to justify the risk.”
When interest rates fall, real estate prices rise because yields compress while rents remain stable. This makes the asset class attractive during rate-cutting cycles, like the one India may now enter.
Can’t afford INR 3 Cr? Try REITs
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REITs in India offer exposure to premium office spaces for as little as ₹2L
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Earn rental yield + capital appreciation
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Professionally managed with strong compliance
REIT investment India is ideal for young professionals who want property exposure without maintenance or large down payments.
Public vs Private Equity: Inside Somaya’s Portfolio
Beyond listed stocks, Somaya allocates heavily to private equity and venture capital through trusted fund managers:
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Public Equity: Mutual funds, direct stock exposure
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Private Equity: Late-stage VC funds like Roots Ventures, with strong track records
He doesn’t invest directly in startups but uses Alternate Investment Funds (AIFs) — with ₹1 Cr minimums — for access to high-return private companies.
Expected IRR: ~4x over 7–10 years
This strategy enables him to tap into India’s booming startup ecosystem while maintaining due diligence and risk management.
Somaya’s Rapid-Fire Nuggets of Wisdom
1. Book recommendation:
Investing: The Last Liberal Art – teaches multi-disciplinary thinking in investing.
2. Biggest myth in wealth creation:
“People think it’s about math. You just need to understand how compounding works. 15% CAGR = double in 5 years.”
3. Personal CAGR over 7 years:
19–20% across equity and real estate, driven by smart investments during COVID lows.
4. Real estate risk:
Vacancy. That’s why location and working capital are key. Don’t overleverage.
5. Market timing strategy:
“Follow the capital cycle. When nobody wants an asset class — that’s often when you should buy.”
India’s Future: Career Growth Meets Market Growth
Somaya is deeply bullish on India’s 20–30-year outlook, driven by:
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Demographic Dividend: Over 60% of India is aged 20–60 — the world’s largest working and consuming class.
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Rising Incomes: India is set to move from a low-income to middle-income economy, expanding consumption across sectors.
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Structural Tailwinds: Formalization, infrastructure, digital transformation, and corporate earnings growth.
“If you're 25–35 today, your career and your portfolio will grow alongside India’s economic rise.”
Final Takeaways: Behavior Beats Brilliance
Ashish Somaya’s biggest lesson is not about the stock market — it’s about your mindset.
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Stay invested during fear
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Rebalance during greed
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Understand historical returns (base rates)
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Diversify across asset classes and cycles
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Think long-term, ignore noise
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Use leverage responsibly
Ashish concludes, “Don’t chase returns. Build conviction. And behave differently from the crowd.”
