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Harshvardhan Roongta, CFP, Roongta Securities, has advised investors to remain cautious while investing in sectoral and thematic funds and stressed the importance of maintaining gold and silver as part of long-term asset allocation.

Speaking on investment strategy, Roongta said no 'superhit' strategy works for everyone. “The best investment strategy is one that suits an individual’s risk profile, goals, and time horizon,” he noted.

Highlighting common investor behaviour, Roongta pointed out that retail investors often chase assets that have delivered strong recent returns. “Whenever an asset class performs well in the recent past, investors tend to follow the trend rather than stick to long-term asset allocation,” he said.

Using gold and silver as an example, Roongta reiterated that precious metals should ideally form 10–15 per cent of a portfolio from an asset allocation perspective. “We have been saying this for over a decade, and even after 15 years, the strategic allocation to gold and silver remains relevant,” he said.

However, he cautioned against increasing exposure to gold or silver merely because prices have surged. “Over the last year, when gold and silver rose sharply, many investors started reallocating money from equity, debt, or even breaking fixed deposits to invest in these assets. This leads to two mistakes—entering an asset at elevated levels and disturbing long-term asset allocation,” he explained.

Roongta emphasised that chasing recent performance can hurt long-term wealth creation. “You may end up entering at peak levels while compromising your original investment plan,” he said.

For investors reviewing or starting their portfolios now, Roongta advised focusing on discipline rather than trends. “Ask yourself whether you are following a long-term asset allocation plan or simply reacting to recent market performance,” he said.

He added that changes in asset allocation should only be made based on risk profile, financial goals, and time horizon—not past returns. “Equity should be aligned with long-term goals, hybrid funds for medium-term needs, and debt for short-term requirements,” he said.

Within equity portfolios, Roongta recommended careful allocation across market capitalisations. “Given the current market environment, investors should maintain a higher tilt towards large-cap stocks to reduce volatility. Those with higher risk appetite may consider selective exposure to mid-caps, while small-caps should be approached only by investors who understand the risks,” he said.

Roongta also urged caution while investing in sectoral and thematic funds. “Such strategies should be part of a well-thought-out plan and not driven by recent returns,” he added.

Roongta concluded by saying that disciplined asset allocation remains the cornerstone of long-term wealth creation. “Your investment strategy should be guided by your risk appetite, goals, and time horizon—not by short-term market trends,” he said.