Strategize Your Portfolio

Since ages, professionals have been trying hard to quantify and predict human behaviour about why they buy or sell their investments. However, not much success has been achieved. The subject is too complex to fit into a mathematical equation. Even if you are skilled enough to select the winner stock or fund and have successfully created a winning portfolio, chances are high that you might have made investments on securities whose returns are strongly correlated. This may work till that sector is in the limelight; however, in bad times your portfolio is likely to perform poorly as all your investments are expected to go through a downward spiral simultaneously.

This might not be a prudent investment strategy, especially if you have earmarked those investments to achieve some of your essential financial goals. Therefore, one of the best ways to approach your investments is to follow a portfolio strategy, which will help you to get better risk-adjusted returns and greater chances of achieving your financial goals. There are various strategies through which you can build your portfolio. Our cover story this time gives you a glimpse of some of the commonly used portfolio strategies and the returns you can expect from them.

You will also find details about the ‘core and satellite’ portfolio strategy and how it can be used to attain your different goals. The cardinal principal of building any portfolio is diversification and asset allocation. Hence, debt should also be an essential part of your portfolio besides equity. Like equity there are many types of debt funds and each type can be used to fulfil your particular need. One of our special reports gives you in detail information about the different types of debt funds and how you can assign them for your different needs. In short, the best way to achieve your financial goals is to build a portfolio that has a judicious mix of debt and equity and confirms to your risk profile. 

SHASHIKANT