When the market crashes, it can have a significant impact on your wealth. However, there are strategies you can adopt to mitigate this risk. Even big mutual fund houses employ one such strategy by securing their portfolio through the purchase of equivalent value of yearly Nifty puts. This approach is similar to taking buying an insurance policy.
The advantage of buying Nifty puts is that when the market crashes, your mutual fund investments will also decrease in value. However, the yearly put option that you have purchased will appreciate in value, helping to offset your losses. At this point, you can choose to sell the put option and reinvest the proceeds in mutual funds.
By doing so, when the market eventually recovers, your portfolio will appreciate even more because you have bought additional mutual fund units at the bottom. This can significantly boost your overall returns.
If you are unsure about how and where to invest, it is always a good idea to seek advice from a veteran in the field. They can help you secure your financial goals in the most prudent manner. Feel free to contact us via Whatsapp at 9482590290 for assistance.