Its the Strategy that Matters!

Uncertainty is the only certainty in the equity market. Despite all the advances made in equity research and technology used to do research, you cannot predict the occurrences of incidences such as the virus pandemic and its impact on equity. They come from nowhere and create havoc to your portfolio. Most of the investors might be looking at a deep cut in their portfolios now. Events like the present pandemic are inevitable. You cannot stop or predict such events but definitely you can shield your portfolio from such events by following proper risk management and positioning your portfolio accordingly. This will help you to create more peace of mind as an investor.

One of the best strategies that you can adopt is to have a multi-asset strategy. Under this, you invest in different assets such as equity, bonds, commodities and cash in different proportions to create a portfolio that suits your risk profile. Looking at the market condition you can vary your exposure to these asset classes and sub-asset classes to achieve the required returns. For example, a conservative multi-asset strategy could be an attractive option for risk-averse investors. The strategy might preferentially give more weightage to government securities or AAA-rated corporate bonds and large-cap stocks.

Similarly, an aggressive multi-asset strategy will invest more in equity and less in bond or cash. Our cover story this time goes deep into understanding multi-asset strategy and who should go for it. There is another trend visible in the global equity market currently where equity indices of the developed market are outperforming emerging market indices. One of our special reports on international funds will help you to make the right decision on choosing which geography you should diversify in. Hope articles from this issue will help you to make an informed investment decision.

SHASHIKANT