Five investment strategies for HNIs in turbulent times

Who can deny that investments are subject to market risks? While turbulent times pose significant challenges, you can navigate through these challenges if you adopt the right investment strategies. In this article, we will explore the top 5 investment strategies for turbulent times that you could use to prevent erosion in your wealth. It is said when the times get tough, the tough get moving. So, without wasting any time, let’s start rolling.  
 

Top 5 Investment Strategies for HNIs 

Let us have a look at the top five investment strategies for HNIs. 
 

Conducting Due Diligence 

Due diligence must be considered when investing. Consulting subject matter experts during investing can reap dividends even during future financial crunch times. We are reaching a consensus with all the critical stakeholders when investing, which can result in well-rounded financial decisions. 
 

Objectivity and Rationality in Decision-Making 

Research studies have highlighted the role of emotions in financial decision-making. Who isn’t aware of the role of emotions in stock market investing decisions? While not likely to harm you a fortune, your impulsive decisions could cause sizable damage to your wealth. It is here that objectivity and rationality come into the picture. 

An example of objectivity in financial planning is using Bayes’ theorem, which helps you calculate your portfolio's expected returns. It is always prudent to approach wealth management with a risk-neutral approach. Approaching otherwise could deviate from objectivity and rationality. 
 

Sticking To Your Plans 

Given your strategic and tactical efforts to create and manage wealth, it would be prudent to stick to your asset allocation approach. Strategic decisions help you stay on course even during turbulent times and help you focus on your long-term requirements as an investor. You could always make minor tweaks and adjustments based on the existing conditions, but making substantial changes that reshape your entire portfolio during these times can later be counterproductive.  
 

Creating a Buffer Corpus 

Managing liquidity is as important as investing, if not more so. It particularly becomes crucial during market volatility. Adequate buffers would prevent you from exiting your existing allocations and positions during such times. 

It is said that the will to prepare is as important as the will to win. Your financial buffer would help you prepare to overcome market volatility without eroding your existing wealth. Consider using pension, savings, and sovereign budget stabilisation funds to create the correct buffer for preserving your wealth from erosion. 

International Diversification

 The global financial system is based on checks and balances. While a particular economy could be experiencing challenges at the cost of stronger rivals, it is unlikely that most nations would experience a downfall simultaneously. 

Past financial management records stand testimony to this fact. While investing only in the past performance track record could be tempting, better approaches exist to navigate tumultuous times. When parking your investments, you should always search for a mix of developed and developing countries. 

While investments in developed economies like the U.S. provide the desired stability effect, investing in emerging markets like India could help you earn the desired profits even during tumultuous times. You might be surprised that, driven by its robust performance over recent years, the Indian stock market is now included among the top five stock markets globally. 

If the middle-income status of emerging market economies is causing you to worry about including them in your portfolio, the performance of stock markets in emerging markets, such as India during the COVID-19 pandemic, could help alleviate your worries to some extent.

   
Conclusion 

Who would disagree that investing is a long-term play? While staying invested long-term could produce the desired outputs for you, you might also have to face times when it would become next to impossible to stay put with your existing investment strategy. In this article, we’ve gone through the top 5 investment strategies for turbulent times to manage your wealth during these challenging times.