STRATEGIES TO SHIELD YOUR INVESTMENTS IN VOLATILE TIMES

Predicting rain doesn't count; building the ark does. Investors can't foresee market uncertainty, but can strengthen portfolios with smart asset allocation. A multi-layered strategy offers more than basic diversification to shield investments in turbulent times. Here are three ways to protect your assets.

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Diversification: the first line of defence Diversification remains key to asset protection. Investors can spread investments across defensive sectors like FMCG, pharmaceuticals, and utilities, and growth sectors such as technology and manufacturing. Large-cap exposure offers stability, while mid and small-caps add growth. Mutual funds or ETFs investing in international markets can hedge against India-specific risks.

Allocation should match your risk profile. A moderate investor might split 50% large-cap, 30% mid-cap, and 10% each in smallcaps and international markets. Conservatives may favour largecaps; aggressive investors can focus more on mid and small-caps.

These are examples; individual goals and risk tolerance matter most. Instead of fixed percentages, use a valuation-based strategy. Increase holdings in undervalued sectors and reduce overvalued ones. This method offers more flexibility than calendarbased rebalancing.

Downside protection: hedge against volatility Beyond diversification, specific downside protection shields portfolios in turbulent markets. In times of uncertainty, investors should hold assets that move inversely to their main holdings.