Personal Finance Queries For The Day (03-02-2020)

Arvind Rajagopalan, 28 Years, Software Developer: I am new to mutual fund investing. How can I de-risk my portfolio?

Portfolio creation depends on your time horizon; whether your goals are long term or short term. Make sure your portfolio is well-diversified and well consolidated.  If you are investing from a long term wealth creation perspective, investing in a diversified equity portfolio having 1-2 top funds of each category, ( small-cap, mid-cap, large-cap, multi-cap) is a good strategy. Also, ensure that the asset allocation is as per your goals. So if your portfolio is highly exposed to equities, you can reduce the risk by adding debt funds to the mix. You can do so by investing in liquid funds that will not only allow you to meet short term expenses but also minimize short term losses due to equities. 

The query is answered by Harsh Jain, Co-founder and COO, Groww