ET Wealth Expo| Wealth creation is exciting; wealth preservation can be boring—but it works, says Manish Kathuria of Kotak Neo

Building wealth may require talent, hard work and the ability to spot opportunities, but preserving and growing that wealth is an entirely different challenge, according to Manish Kathuria, Chief Business Officer – Relationship and Private Client Group at Kotak Neo.

Speaking at the ET Wealth Expo 2026 held in October in Mumbai, Kathuria said that while investors often get caught up in the excitement of rising markets and high-return opportunities, long-term wealth preservation is driven by a far less glamorous process—discipline, patience, risk management and, above all, asset allocation.

“Creating and building wealth takes a lot of talent and hard work, but preserving and growing wealth is a different ballgame,” Kathuria said, adding that investors need courage during periods of market volatility, whether it is to hold on to an investment or exit a position.

Asset allocation is the 'holy grail'

Kathuria pointed to the sharp swings investors have experienced in recent years to underline the importance of diversification.

Markets delivered strong returns in the years following the pandemic, but the subsequent correction tested investor behaviour and portfolio resilience. According to Kathuria, one of the encouraging developments has been the evolution of Indian investors, who are increasingly diversifying their portfolios across asset classes.

He noted that allocations to alternatives and commodities such as gold and silver have increased, while investors are also looking more closely at global equities.

“The holy grail is asset allocation,” he said. “Markets will go up and down, but long-term wealth creation and preservation will most importantly be a function of asset allocation.”

At Kotak Neo's Private Client Group, Kathuria said portfolio construction begins with understanding an investor's financial needs, risk profile, risk tolerance and risk-management requirements. The portfolio then needs to be reviewed regularly and rebalanced when necessary.

The process may not offer the excitement of following daily market moves, but Kathuria said it remains a tried-and-tested way of preserving and building wealth over time.

Read more: ETMarkets Commodity Talk| A 10% allocation to gold and silver? Motilal Oswal's Manav Modi explains the commodity playbook

A winning stock can also become a risk

Kathuria also highlighted concentration risk as one of the biggest challenges in an investor's portfolio, particularly when a single investment has performed exceptionally well.

Investors can develop an emotional attachment to winning stocks, making it difficult to reduce exposure even when the position becomes disproportionately large.

He cited the example of employees in the financial sector who may accumulate a significant portion of their wealth in the shares of their own company through employee stock options.

The solution, he said, is to have a clearly defined risk-management framework and decide in advance how much exposure is appropriate for a single stock or investment.

Whether that allocation is 10%, 20% or even 30% will depend on the investor, but the key is to remain aware of the associated risk and review the portfolio regularly.

“Concentration risk is a real risk,” Kathuria said, stressing the importance of regular discussions and portfolio reviews to identify the need for rebalancing or exits.

The role of investor biases

Investor behaviour can often be influenced by emotions such as greed and fear, as well as behavioural biases such as loss aversion, Kathuria said.

An investor who buys a stock at Rs 100 may hesitate to sell when the price falls to Rs 90 because the pain of booking a loss can feel greater than the satisfaction of an equivalent gain.

Such biases are part of being human, he said, but investors can reduce their impact by becoming conscious of them and putting a risk-management framework in place.

Kathuria also urged investors to focus not just on headline market returns but on the performance of their own portfolios.

“The pertinent point for the audience is: what has my portfolio given me?” he said, noting that investor returns can differ significantly from broader market returns because of entry and exit decisions influenced by emotions.

Read more: ETMarkets Smart Talk| Gold, silver or copper? Tata MF fund manager suggests a 50:30:20 commodity allocation: Tapan Patel

Global diversification moves from 'why' to 'how'

Another major shift, according to Kathuria, is the growing interest among Indian investors in global equities.

After watching overseas markets deliver strong returns, the conversation among investors is shifting from whether they should diversify internationally to how they should do so.

Kathuria said Kotak Neo is, depending on individual client requirements, comfortable recommending an allocation of around 15% to 20% of the equity portfolio to global markets.

The rationale is diversification as well as access to sectors and investment opportunities that may not be adequately represented in the Indian market, including areas such as artificial intelligence, electric vehicles and semiconductors.

However, he stressed that global investing should also be diversified rather than concentrated in a single theme or sector.

Kathuria also sees GIFT City playing a bigger role in making global investing more accessible to Indian investors while potentially attracting overseas capital into the country.

With India accounting for only a small share of global market capitalisation, global equities, he said, increasingly deserve a place in a diversified client portfolio.

For Kathuria, the broader message for investors is simple: building wealth may be exciting, but the discipline required to preserve it is often less dramatic.

A carefully constructed portfolio, a clear risk framework, regular reviews and disciplined asset allocation may seem like a “boring” process—but over the long term, he believes, that is precisely what makes it work.

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