which is best portfolio mangement in india?

Question

which is best trade? derivative or equity?

Answer 1

Please understand basics first.

Equity is ASSET class investment. It means if you have bought shares of good quality the prices will generally keep going up. At some stage your holdings may increase due to bonus or rights issued to you. You will keep getting dividend income intermittently. In the long run value of your investments will appreciate many fold.

Derivatives is to allow you to hedge your asset class investments positions from sudden depreciation due to external factors. This is equivalent to insurance that you take on your home or life. It is never meant to be invested to be hugely profitable but to safeguard value of your investments in times of high volatiliy and thereby containing the resultant losses in the short term.

Hope you have understood the position well.

To me Equity is the best option to invest and Derivatives as best insurance against sudden losses in equity trades.

Best luck

Answer 2

times of high growth and bullish sentiment - 80% equity, 20% derivatives

times of slowdown and bearish sentiment - 50% fixed income, 25% derivatives, 25% cash