ET Wealth Expo: Saurabh Mukherjea suggests a simple 50:50 portfolio to diversify across India and the US
Saurabh Mukherjea recommends a simple 50:50 portfolio split between the Nifty 50 and the S&P 500, with annual rebalancing, to diversify across India and the US. He explains how the strategy can improve returns relative to risk, reduce volatility and help investors avoid predicting which market will outperform.
Saurabh Mukherjea, Founder and Chief Investment Officer of Marcellus Investment Managers, proposed a straightforward method for building a diversified portfolio at the ET Wealth Expo in Mumbai. He suggested allocating investments equally between the Nifty 50 and the S&P 500, with an annual rebalancing to maintain a 50:50 allocation.
Mukherjea emphasized that investors do not need to predict which market will outperform in the future. Instead, they can benefit from whichever market performs better by rebalancing their portfolio once a year.
According to Mukherjea, this approach is based on the asset allocation theory developed by Harry Markowitz, who received the Nobel Prize in 1990. The benefits of this method include higher returns, lower volatility, and the elimination of the need to forecast market performance. The portfolio's returns can move towards the higher-returning asset over time, while its volatility moves closer to the lower-volatility asset.
This strategy also allows investors to take advantage of global investing, as their expenses and aspirations are increasingly linked to the global economy.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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