India-Pak conflict stressing you out? 6 ways to drone-proof your portfolio

With Pakistan breaching the ceasefire agreement, stock market investors are worried whether India is headed for another round of military escalation. But as the saying goes, buy on the sound of cannons, sell on the sound of trumpets. It’s a wartime investing mantra as old as the markets themselves, and it’s ringing louder than ever. Warren Buffett’s classic wisdom echoes too—be greedy when others are fearful and fearful when others are greedy.

And if the history of India-Pakistan conflicts is any guide, markets have taken the hits and bounced back harder.

Bajaj Broking has advised retail investors to avoid impulsive exits based on short-term geopolitical jitters. According to the brokerage, such downturns have historically been temporary. For long-term investors, these moments can actually present an opportunity to pick up fundamentally sound stocks at discounted valuations.

Analysts, meanwhile, are recommending traders keep their leveraged and speculative positions light. Hedging short-term exposures using derivatives is also being suggested to navigate volatility.

So how do you shield your portfolio from potential geopolitical fallout? Here are six strategies to make your investments drone-proof:

1) Cash is king


In uncertain times, liquidity is not laziness, it’s leverage. Holding some cash allows you to stay nimble and strike when valuations fall. Keep your powder dry and be ready to deploy it if markets offer deep discounts.

Also read | Will a fragile India-Pakistan ceasefire spark a stock market rally? 5 signs to read

2) Asset allocation dharma


When markets get rough, smart asset allocation separates winners from worriers. Investors overweight on equities may want to diversify into debt, gold, or silver. Multi-asset funds can also be a safe bet for those who don’t want all their eggs in one volatile basket.

Punita Kumar Sinha of Pacific Paradigm Advisors said this is a volatile and choppy year. In such conditions, multi-asset diversification is the way to go because different asset classes don’t move in sync. She pointed out that gold, for instance, has outperformed at times when equities have taken a hit, especially amid global uncertainty.

3) Keep SIPping through the noise



Systematic Investment Plans are designed to thrive in volatility. When markets fall, your SIPs buy more units for the same amount, thanks to lower NAVs. This rupee cost averaging builds wealth quietly and steadily but only if you let it. Stopping SIPs during turmoil is like abandoning a ship that’s actually built for storms.

4) Diversify across sectors


Don’t let your portfolio become collateral damage due to overexposure. Spread your investments across sectors to reduce risk. One bad news cycle shouldn’t be able to sink your entire ship.

5) Stick to quality stocks


Now is not the time for adventurous punts. Focus on large-cap companies with strong fundamentals, low debt, and stable earnings. These stocks are better equipped to weather geopolitical headwinds and emerge stronger on the other side, analysts say.

6) Play defensive, stay opportunistic


Pharma, FMCG, and utilities are traditionally resilient during market volatility, and Bajaj Broking recommends leaning on these sectors. Sinha added that it’s wise to hold a defensive portfolio for now, while keeping some cash handy to buy into higher-beta mid- and small-cap names once the dust settles.

India’s market has lived through conflict before and it has always come out stronger. Investors who react emotionally may end up on the wrong side of history. Those who plan, stay disciplined, and keep perspective just might find that war-time investing pays peace-time rewards.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)