Perfect Portfolio कैसे बनाएं? Strategy, Risk और Framework के साथ! with Prof. Varun Sharma

In today’s volatile and unpredictable financial environment, understanding how to manage risk and build a robust investment portfolio is more essential than ever. With global uncertainties, technological shifts like AI, and political instability shaping markets, investors must be equipped with effective strategies to protect and grow their wealth. Professor Varun Sharma, a US-based Indian academic and financial expert, offers profound insights drawn from his extensive experience in risk management, consulting, and academia. This video distills his invaluable teachings on portfolio strategy, diversification, and risk management.

In this video we will discuss the nuances of globalization, rising protectionism, and the unpredictable impact of AI on job markets and investment patterns. Despite these changes, Sharma underscores a key takeaway: industries will continuously evolve, and a diversified portfolio is the best hedge against these macro-level disruptions. Investing in tech may be tempting, but Sharma warns against over-concentration. With examples like Yahoo and Blackberry, he demonstrates that today's market leaders might not dominate tomorrow. He encourages diversification even within the tech sector and stresses continuous learning to adapt to technological changes.

Retail investors often chase returns while ignoring the associated risks. Sharma highlights how platforms glamorize short-term gains but fail to reflect risk-adjusted returns. He introduces fundamental concepts like volatility, return uncertainty, and market co-movement to help investors understand the real picture behind attractive returns. While small-cap stocks offer the potential for extraordinary returns, Sharma cautions against ignoring their volatility. Drawing lessons from the dot-com crash and the 2008 financial crisis, he explains that high returns often come with high risks. His illustrative coin toss game and insurance analogies help viewers grasp the psychological and mathematical dimensions of risk aversion, expected value, and variance.

Sharma reiterates a cornerstone of modern portfolio theory: diversification. Whether by asset class, sector, or individual stocks, combining uncorrelated investments can reduce overall risk without compromising returns. He explains that even a portfolio of 5-30 well-chosen stocks can significantly mitigate risk.To simplify diversification, Sharma recommends using Exchange-Traded Funds (ETFs) that cover various market caps and geographies. He proposes a balanced portfolio—commonly a 60-40 equity-bond allocation—with flexibility for dynamic shifts as market conditions change. He also emphasizes the need to keep some assets liquid for emergencies.