Surgically Strike your Portfolio

February 22, 2019

 Surgical Strike in a military term alluding to the quick and effective manner in which a small team of military commandos take out specific enemy target with precision and deadly accuracy. The key importance of a Surgical Strike is the Speed and the stealth applied to obtain a huge impact.

 

In the context of portfolio management also we can use this concept with great degree of success.

 

Let us say over the past year your portfolio of Mid & Small cap stocks / mutual funds have been severely impacted  due to the stiff market corrections on the same. However as we start seeing that the worst is behind us with some of these mid/ small cap companies actually performing well in their area of operations.. it alludes that maybe more damages is done than was deserved. In such a scenario , a brave investor may well do some deep homework  and tactically increase his exposure to Mid & Small cap stocks/ funds with the idea of benefitting there from when the recovery happens. The surgical aspect in this comes from the ability to interpret the good from the bad , so that while ridding the portfolio of  the bad ones.. enhancing the good ones is what will benefit the portfolio in the long run. In a Portfolio context we would call this tactical Asset Re Balancing.

 

Asset re-balancing done tactically is the secret to lopsided returns to investors over long term. However, it is not easy. Especially seeing one’s portfolio in red, and then going forth and adding thereto is easier said than done.

 

However Surgical Strikes are hardly for the faint of heart. Try it, as they say FORTUNE FAVOURS THE BRAVE.  

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