What should be your investment strategy in this record-high environment? Here's how your model portfolio should look
what should be your trading strategy in this record-high environment? How should your portfolio look like? Here's what experts said: Tanvi Kanchan, Head – UAE Business & Strategy, Anand Rathi Shares and Stock Brokers For investors looking at the long-term perspective, short-term volatility can be used to increase exposure in sectors that are lower than long-term averages, as well as increasing large-cap exposure in the portfolio. An allocation between equity and debt as per tenor and risk profile can be maintained in the range of 60% - 70% in equity and balance in debt for an aggressive investor. Investors would do well to keep rebalancing their asset allocation and equity portfolio to realise profits from the equity portion (if it has overshot the allocated percent).
Within equities, stocks that have run up much ahead of their fundamentals and peers should be looked at from a full/partial exit perspective. With elections around the corner, we are entering a volatile period. Hence the above will insulate the portfolio from sudden large shocks and at the same time enable participating in the market upmove as and when it happens.
We believe style and sector rotation will be critical in alpha generation moving forward. With the intense catch-up of Mid Caps and Small Caps in the last couple of months, we believe the margin of safety at current levels has reduced as compared to that available in Large Caps in terms of valuations. With this view, the broader market may see some time correction in certain pockets in the near term and flows will likely shift to l large caps.
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