Market levels being where they are, if you are feeling iffy, then the pragmatic approach apart from investing for the long term is to diversify. Diversification is across asset categories, i.e. equity, debt, gold, etc. Apart from that, it can be across geographies, as the risk profile of markets are different, correlation between two markets is low and that effectively diversifies your risks. The options for investors are more nowadays, with the spread of technology and fund innovation. In the context of spreading your investment portfolio, we will discuss about the US market, as it is the global leader in market cap. For a perspective, India being the growth economy, a majority of your portfolio should be in India. Then what is the rationale for investing in the US market? The reasons are threefold.
Key to long-term investing: ‘Time in the market’ more important than ‘timing the market’
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