‘Rebalancing of portfolios remains a crucial element in managing clients’ investments’

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: With the stock market losing half of its value over the year, a lot of wealth has vanished into thin air. And at the same time, there is optimism that the Indian economy would continue to grow, albeit at a slower pace. In this scenario, what should be your wealth management strategy? Rajesh Saluja, CEO of ASK Wealth Advisors replied to queries posed by FE on several critical issues. Excerpts

What is the reaction you have received from clients in this current troubled scenario? And what is the advice you are giving them?

Generally speaking, investors are definitely a troubled lot today. The kind of financial turmoil that we have seen across the world today would rank as a first of its kind. No matter how seasoned an investor he/she would not have been prepared for the intensity and magnitude of the meltdown that took place in virtually all asset classes.

What has unnerved them is the ease with which large international names in the capital markets, which were the beacons of the industry the world over – collapsed under the financial storm. This has really shaken investor confidence as “black swan” events are taking place much too often!

However, our advice to clients has always been to get the broad picture in place before acting upon any investment decision, to plan out a strategy and stick by it. The strategy is derived after a proper risk profiling, horizon of investment and the investment objective.

The outcome is an asset allocation suitable to the client, based on which an investment strategy is planned; allocation to investment follows thereafter. The biggest advantage here is that our clients, a majority of them, who have invested with a financial plan, have understood that well. A result of which is that the current market is viewed by them as one providing immense opportunities to move decisively towards achieving their goals.

Are there any portfolio changes that you have been making while managing wealth?

Changes in asset allocation are never carried out for clients to suit market sentiment. Once in a while we do try and capitalise on opportunities that the markets throw up in times of irrational behaviour.