In the era of globalisation, a news event in one part of the world carries the potential to impact the markets in the other part. Thus, the investors must aim to mitigate the investment risk to the possible extent. With this investment objective, financial advisors advise to follow core-satellite investment strategy, wherein, the core of your portfolio is invested in stable asset classes and investments, while the satellite component can provide a cushion to the returns, generated by adopting a relatively aggressive investing strategy. The main investment objective to adopt a core-satellite strategy is to maintain a diversified portfolio, helping the investors to mitigate the investment risk. The proportion of core and satellite within the investment portfolio may be different for different investors. Further, as one move from the core towards the satellite portion, the investment style turns relatively aggressive in order to generate higher alpha and also, generate higher average returns for the portfolio.
This story is from the January 20, 2020 - February 02, 2020 edition of Dalal Street Investment Journal.
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This story is from the January 20, 2020 - February 02, 2020 edition of Dalal Street Investment Journal.
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