Experts discuss ways to protect portfolio gains in a falling market

One of the easiest ways to protect your upside gains in a stock market is to take profits off the table. But when it comes to long-term financial instruments like mutual funds, this strategy may not always work. To ensure that your portfolio is well positioned for growth and that you don’t make mistakes that could hinder your overall return, it’s important to make the right investment decisions.

For investors spooked by global market volatility and geopolitical tensions, Economictimes.com has hosted an exclusive session on how to protect your portfolio gains in a falling market.

“Ideally, a good portfolio is one that matches your long-term financial goals and is well-diversified across different asset classes, including stocks, and different styles and segments within stocks. income in a portfolio help investors get a full suite of products that can help you achieve your long-term financial goals,” said Sorbh Gupta, fund manager – equities, Quantum AMC during the session.

Volatility is a given when it comes to stock markets. Portfolio planning depends on several factors such as an investor’s appetite for risk and financial goals.
“On a 20-year basis, Nifty and Sensex have delivered nearly 20x returns despite volatility. Asset allocation makes the investment journey enjoyable by combining equities with other asset classes like gold and debt over the long term,” according to Arun Kumar, Head of Research, Funds India on the best strategies to protect portfolio gains.

On factors investors should keep in mind when choosing funds, Gupta said:
“There should always be a concept of a bunch of funds to invest for the long term. Different fund styles do well in different time periods. After 2020, value stocks or value portfolios are doing better than growth funds due to factors such as cyclical recovery, interest rate revision, etc.



A well-designed fund mix can help investors weather volatility and gain that diversification benefit.

Some of the factors to keep in mind when choosing a fund:

  1. Periodic review of funds: The portfolio should ideally have 5-6 funds
  2. Consistency in investment style: Continuity in the fund management team
  3. The portfolio must have a low churn rate: The fund manager must follow the same investment strategy as the CMA
  4. Low spend rate: Expense ratio or amount an asset management company charges investors to manage an investment portfolio. A higher expense ratio will impact long-term investor returns.

Our experts also deliberated on the best asset classes for diversification and should investors look to global markets to diversify their portfolio. To watch the full session click here.