What's Your Portfolio Strategy?

Investing in a mutual fund is not an ad hoc process. It requires a disciplined approach that will help you choose the right portfolio strategy in order to achieve your financial goals, some of which may be your ‘needs’ and some would be ‘wants’. In this article, we highlight the various strategies and zero down on the core and satellite portfolio strategy that is best suited for most of us.

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Iconic investor Warren Buffet once said, “We don’t have to be smarter than the rest, but we have to be more disciplined than the rest”. It is a maxim that is apt to the world of investments, which requires a more disciplined approach. Mutual fund investment, and especially investing through the Systematic Investment Plan (SIP) route, helps you to maintain that self-restraint and moderation or regimen. Building the right mutual fund portfolio calls for a disciplined approach and proper planning. Constructing a ‘right portfolio’ may sound simple but selecting a strategy to build a right or constructive portfolio that suits you is quite complex. There are various portfolio strategies available to select from.

Hence, it is crucial on your part to identify and implement a portfolio strategy that best suits your circumstances and needs. While it is important to know the objective of your investment before deciding on your portfolio strategy, knowing your risk appetite is also equally important. This is because your risk appetite will determine your asset allocation. There are various portfolio strategies available for investors, namely, bucket strategy, permanent portfolio strategy, classic balanced strategy, dynamic portfolio strategy, and core and satellite portfolio strategy. We will explain all these strategies in detail and you can choose the one that matches your requirement and temperament.

Bucket Strategy