Diversifying Investments: A Safe Investment Strategy

By Fariba Ronnasi, Founder & President, Elite Wealth Management, Inc.   |   Wednesday, 19 Feb 2014, 15:13 IST

Fariba Ronnasi, has headed the strategic management of numerous high net-worth individuals. Prior to establishing the firm in October of 2004, Fariba worked as Managing Director for the Private Wealth Division of Columbia Management Company and was responsible for expanding the Private Portfolios Group on the West Coast.

When decisions on investments need to be taken, investors begin by assessing the market scenario. From an investor’s perspective one needs to look at the market from a macro level and bring it down to micro level as this will be helpful in deciding the sectors that will benefit their clients. The last few days of 2013 saw a huge rise in the stock market, but Elite Wealth Management advised its clients that the euphoria will not be lasting as we enter into 2014. This claim is slowly taking shape and it can be seen from marketing varying 100 points up and down. The majority of the gain though, will be made in the second half of the year and will be about 5-10 percent.

This trend though has a great potent in the emerging namely China and so is Elite’s  investment driven towards it. Even with the pull back, China will have the most potential and the highest GDP compared to other markets, but Elite will invest only when there is a surety of downside protection. Elite has previously invested in S&P 100 names and S&P 500 names and we always look to go with the leaders in different sectors and look to diversify ourselves, and this comes as one of our differentiators.

Investment Philosophy

The year 2014 will see technology as a better performing sector, because regardless of what happens, people still have to pay their internet bills, use their computers, mobile devices, whether in the business side or the consumer side, the expenses always stays. Another better prospect is the Healthcare sector which has always been a safe haven with less volatility as compared to other sectors.

It is always the matter of ‘when’ and never the matter of ‘if’, and this is been one of the biggest selling points which we always advocate to our clients. The investment philosophy which we always advice is to go with the most proliferate names who have the ability to hitch if any downside and improvement option overlay. The stock market in 2011 ended at a flat zero, but having a portfolio that generates nice dividend of high quality with option overlay strategy which brings premium, just the combination of premiums and dividends will generate positive returns for the portfolio even if the market is a flat zero.

(As told to Sagaya Christuraj)