Market falls for 2nd straight session but less than 3% away from peak; what should your strategy be?

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₹2.8 lakh crore. Sustained infrastructure investments shall help the capital goods, industrials, and infrastructure sectors to continue performing in the coming months. Auto and auto ancillary sectors shall also continue to see selective traction as a few sub-segments in the industry are performing extremely well and with the upcoming festive season, the momentum is expected to continue.

BFSI will also be a good space for stock picking. The credit growth is sustaining at mid-double digits, which is an enabling environment for niche small and midcap lenders to grow well. We are also positive on healthcare as a theme, which is being supported by improving healthcare infrastructure, improved demand backed by government schemes, higher insurance penetration and improving supply in tier 2 cities.

Currently, our model portfolio is fairly diversified with the highest weight in financials, followed by industrial and manufacturing, consumer discretionary, and IT. We were very positive on our top two themes in the previous year, and we continue to be positive now as well. However, as the low-hanging fruits are gone with the rally, we are trimming some positions to rebalance the portfolio and get into newer themes.

Investors can protect their portfolios by diversifying in non-correlated assets. So if you have all your investments into equities whether large, mid, or small-cap, it won’t matter much. If there is a crash in the markets, it will affect all three.

But if you have allocations towards gold, silver, currency, and fixed-income securities, then the overall impact on your portfolio will be minimised. Crude oil has been racing higher and trading above the $90/ barrel mark. One should stay away from industries like aviation,