Time to adjust your portfolio

In the last couple of days, the stock market has lost about 12% of the value and has fallen from 21,000 to 18,361. The trailing price earning multiple of the Sensex has fallen from a high of 28.5 times to about 23.5 times, which is available at a 17% discount from the recent past. Though the advice would be investor-specific, depending on his profile, assuming 50% equity and 50% debt profile of an investor, we take various situations to explain the adjustment: A new investor who has to build up his portfolio: Should treat this as an opportunity to enter the market with at least 50% of the equity allocation and the balance 50% could be added in a staggered manner over the next six months. An investor who started a portfolio six months back and the person’s equity allocation has fallen to 40%: Should buy 10% of the total portfolio at the moment to rebalance/reallocate the portfolio. An investor who after the stock market crash is about 60% exposed to equities against a profile of 50%: Should try to reduce the allocation to equities in tranches, over the next six months, either through a systematic withdrawal plan or if fresh liquidity comes in, it should go towards debt.