Beating the stock market refers to investments that outperform the popular benchmark (NIFTY-50) index. To beat the stock market using Portfolio optimizer, you can follow these steps:
- Identify potential investment candidates: Portfolio Optimiser comes with more than 100 pre-built investment themes and portfolios. Subscribers can optimise these to find the top few stocks across different segments and sectors.
- Build multiple optimised portfolios with different goals: Creating multiple portfolios such as large-cap, mid-cap, small-cap, IT, Banking, e.t.c. allows you to identify specific allocations and risk thresholds for each portfolio. For example, the Large-cap portfolio could receive a larger allocation than the Small-cap portfolio or the small-cap portfolio could be reviewed for rebalancing more often than the large-cap portfolio.
- Rebalance periodically: Markets are constantly changing and therefore it is very important to switch out of stocks that are not performing and allocate to stocks that are performing in a timely manner. Periodic rebalancing ensures that an investors portfolio is actively adapting to changes in the market.
In summary, to beat the stock market using a portfolio optimizer, you need to define your investment goals and risk tolerance, select stocks or assets accordingly, build multiple optimised portfolios, review the recommended portfolio allocation, rebalance periodically to benefit from changes in the market and exercise caution by conducting your own due diligence.