The portfolio manager’s ultimate goal is to maximize the investments’ expected return within an appropriate level of risk exposure.The key to effective portfolio management is the long-term mix of assets. Generally, that means stocks, mutual funds, health insurance, term insurance, bonds and fixed deposits. Investors with a more aggressive profile weight their portfolios toward more volatile investments. Investors with a conservative profile weight their portfolios toward stable investments such as bonds and blue-chip stocks, mutual funds etc.

Diversification involves spreading the risk and reward of individual securities within an asset class, or between asset classes. Because it is difficult to know which subset of an asset class or sector is likely to outperform another, diversification seeks to capture the returns of all of the sectors over time while reducing volatility at any given time.

Rebalancing is used to return a portfolio to its original target allocation at regular intervals, usually annually. This is done to reinstate the original asset mix when the movements of the markets force it out of kilter.

Here at SAVITA BHIDE & Co. we have design strategy according to client’s risk taking capacity and long-term financial goals. We are majorly focused on providing downside protection while generating regular sustainable profits.