Managing Portfolio Drawdowns in Volatile Market Cycles
Praveen Dubey (SEBI Registered RA)
SP RESEARCHVIA PVT. LTD. (INH000015808)
Capital Preservation as a Priority
Successful long-term investing is as much about limiting losses as it is about maximizing gains. Deep drawdowns require exponential gains just to break even on capital. The risk management experts at SP RESEARCHVIA PVT. LTD. discuss capital preservation models.
What is the most effective way to hedge a long-only equity portfolio?
Using index put options or maintaining a 10-20% allocation to uncorrelated assets like gold and liquid debt funds works as a reliable buffer.
Implementing Dynamic Asset Allocation
Rebalance your portfolio periodically. When equity valuations stretch, trimming high-beta holdings and moving allocation to defensive sectors like FMCG and Pharma helps reduce overall volatility.
Written by Praveen Dubey
Chief Research Analyst | SEBI Reg: INH000015808
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