As market continues to correct, should you relook at exposure to debt investments in portfolio? Experts say this

livemint.com:

Benchmark indices Nifty50 and S&P Sensex ended the week two percent lower this week. The continuous decline in the stock market has given yet another reason to investors to relook at their debt allocation. 

Investing in fixed income instruments provides stability to the portfolio and helps them sail through volatility. Wealth advisors suggest that this is the time to exercise caution and investors should stick to long-term allocation.

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“We believe the valuations of Indian equities are not cheap and hence investors should exercise caution. We don’t think this is a time to be overweight equities, hence investors should maintain an allocation which is closer to their long-term equity allocation. This could mean that investors could relook at their exposure to debt investments. Debt investments offer attractive yields and with expectation of rate cuts in coming few months, investor returns in debt investments over the next 2-3 years could be higher than recent past," says Alekh Yadav, Head of Investment Products, Sanctum Wealth.

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Vishal Goenka, Co-Founder of IndiaBonds.com, opines that fixed income instruments play a key role in providing stability and predictability to portfolio, characteristics that are highly valued during such periods of volatility.

“Fixed income instruments are crucial components of a diversified investment portfolio.  Bonds, a primary category of fixed income instruments, offer regular income through interest payments and are less volatile than equities," he says.

The decline in benchmark indices is also seen as a good time to raise allocation to