Investing doesn’t have to be complicated; follow these three principles, says Vivek Sharma, VP & Investments Head, Estee Advisors

Q4 was a good quarter, with several companies posting good earnings results. However, in terms of top-line growth, the momentum was still muted, and much of the rise in profits was attributed to other income rather than core business expansion.

Nonetheless, as long-term investors, it is important for us to not be like ants and have the ability to zoom out and see things from a broader lens. Overall, India is now the fourth-largest economy, and the economic landscape of the country is very strong. India is perfectly positioned to have a great decade ahead, and investors should not consume themselves too much with quarterly reports.

Global geopolitical tensions and Trump's erratic tweets on tariff situations do have an impact on the global market, including India. However, it is very hard to position oneself in response to these events. Therefore, at Estee Advisors, instead of trying to predict these trends, we focus on adapting to them.

We use a fully data-driven quantitative approach to investing. Our sophisticated algorithms are able to cut through the noise and assess situations objectively, giving us a rational view of how these events are affecting the underlying systematic risk factors.

This approach allows us to not get lost in the noise and remain focused on the portfolio's exposure. We do not believe in knee-jerk reactions to global events and instead believe that a systematic and disciplined approach is the best way to navigate through tough waters.

We don’t believe in a reactionary knee-jerk approach to investing. Once an event has occurred, prices are very quick to incorporate that information. We believe in constructing a diversified, sector-agnostic portfolio with good-quality stocks rather than focusing on one particular sector.

We follow a sector-agnostic approach, focusing on maintaining a well-diversified allocation across all sectors. We believe that sector performance in the market can be highly cyclical, making a sector-agnostic approach crucial for long-term investment success.

While certain sectors may perform exceptionally well in any given year, predicting which sector will outperform next remains extremely challenging. Sectors go through natural cycles, and those performing well at one time may not sustain their performance over the long term.

Consider healthcare, which was a top performer in 2020 but became the worst performer in 2021 and 2022. Similarly, utilities delivered strong performance in 2021 and 2022, only to underperform significantly in 2023 and 2024. This inconsistent pattern in sector performance makes concentrated bets on specific sectors inherently risky.

We employ a sectoral block that allocates about 20% weight to sector-specific factors and scores our investment universe using these factors. This approach allows us to avoid concentration on any one particular sector and deliver better risk-adjusted returns over the long term.

Estee Advisors started its journey back in 2008, right around the time SEBI gave the green light to algorithmic trading in India. We were among the early movers in the quantitative investing space here, and from day one, our focus has been on building sophisticated, research-driven investment strategies.

We firmly believe that investing should be based on data and discipline—not emotion or guesswork. That’s what led us to develop our flagship equity strategy called Long Alpha. It is a long-only strategy that uses a factor-based approach to pick stocks. In simple terms, we study a wide universe of stocks and analyse the underlying patterns and risk factors they carry—like value, quality, momentum, and more. Our proprietary model then helps us identify the names that we believe have the most potential to outperform.

We also run a market-neutral strategy called I Alpha, which is unique. It is designed to deliver returns regardless of whether the market goes up or down. It works by simultaneously taking long and short positions to capture opportunities on both sides of the market.

What’s really remarkable is that Alpha hasn’t had a single negative month in performance in over 15 years of running it. That consistency is something we’re really proud of.

At the heart of everything we do is a deep commitment to using technology, math, and sound logic to make investment decisions. We’re always refining our models and learning from market behaviour, because in our view, staying ahead means constantly evolving.

Investing doesn’t have to be complicated. The most effective strategies are often the simplest. If you’re just starting in your career, I’d suggest focusing on three key principles:

Build an investment plan

Know your goals, your time horizon, and how much risk you’re comfortable taking. It doesn’t need to be perfect—just clear enough to get you started.

Avoid the noise

The markets are full of distractions: daily headlines, social media hype, and hot tips. Most of it doesn’t matter in the long run. Stick to your plan.

Stay the course

Investing rewards patience. Don’t let short-term volatility shake your long-term conviction.

If you get these big things right early on, you’re already ahead of most people.