Spreading money across industries, sectors or even different countries could help lessen the risk of losses for investors amid volatility.
That's the advice from Devina Mehra, founder of First Global. Having a globally diversified portfolio is important, she said at a BQ Edge event. More so now when returns from one market can be non-linear and very erratic if an economy or a country is involved in a geopolitical issue or stands to get impacted severely due to commodity price inflation.
Diversification helps in “broadening the scope of stable returns through various markets as opposed to taking a single market and a single country risks”, Mehra said in a conversation with BloombergQuint's Niraj Shah. It, she said, should not only be among markets but also among different asset classes, which would help in negating the negative impact of price fluctuations across assets from time to time.
According to Mehra, it's difficult to get the kind of returns that investors have gotten in the past 18-24 months during the ongoing geopolitical tensions and risks to equity markets from rising interest rates. “Therefore, selective bottom-up stock picking accompanied by intelligent diversification will be the best bet for investors to make returns.”
Watch the full interview here:
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