In times of uncertainty, the difference between wealth preservation and capital erosion often lies not in predicting markets—but in preparing for them.
At Growmont, we’ve found that for high-net-worth individuals, family offices, and institutional investors, the true challenge isn’t volatility itself—it’s navigating it with clarity. While volatility is unavoidable, unmanaged exposure to it is not. And that’s where custom portfolio construction becomes a cornerstone of intelligent financial solutions.
Understanding Market Volatility: What Are We Really Dealing With?
Volatility, simply put, is a measure of how much and how quickly the price of an asset or a market index moves. But beneath that simple definition lies a powerful reality: volatility affects more than returns—it impacts liquidity, investor behaviour, tax outcomes, and long-term wealth goals.
Broadly speaking, volatility can be categorised into two types:
- Systematic risk, which affects the entire market (e.g., geopolitical events, inflation, interest rate cycles), and
- Unsystematic risk, which is specific to a company, sector, or asset class.
Systematic risk cannot be eliminated, only hedged or minimised. Unsystematic risk, however, can—and should—be managed effectively through strategic portfolio construction.
Why Basic Diversification Isn’t Enough Anymore
Conventional wisdom suggests that diversification is the cure for volatility. But simply owning a basket of different asset classes isn’t enough, especially when correlations spike during market downturns.
In many portfolios, diversification becomes dilution—with too many overlapping assets offering little in the way of true risk mitigation. Worse, in high-volatility environments, traditional portfolios often lack the flexibility to adapt to shifting macro conditions.
For HNIs and institutions with large, complex holdings, volatility isn’t just about temporary dips—it’s about the potential for permanent loss of capital in areas that were inadequately analysed or overexposed.
What Custom Portfolio Construction Really Involves
Custom portfolio construction goes far beyond “stocks vs bonds” or even equity vs alternatives. It involves:
- Precision asset selection, based on personal and organisational objectives
- Liquidity layering, ensuring access to capital even during stressed cycles
- Risk scenario modelling, including stress tests and tail risk assessments
- Concentration analysis, identifying clusters of unintended exposure
- Strategic rebalancing protocols, tailored to your risk comfort and market outlook
At Growmont, our process integrates quantitative tools and in-house research to ensure that every portfolio is designed for adaptability—because volatility does not wait for your next quarterly review.
Techniques to Reduce Unsystematic Risk in a Volatile Market
Customisation allows us to apply advanced portfolio techniques that specifically target unsystematic risk. A few include:
- Cross-sector diversification, avoiding thematic overexposure (e.g., tech-heavy or export-driven portfolios)
- Position sizing and exposure caps, particularly important in private equity or concentrated bets
- Asset-specific hedging strategies, such as options overlays or downside buffers in structured products
- Multi-layered due diligence, especially in alternative investments or unlisted securities
- Dynamic allocation triggers, not based on market sentiment but on forward-looking risk indicators
This is not about beating the market—it’s about ensuring that you don’t lose sight of your objectives when the market behaves irrationally.
A Real-World Perspective
Consider an HNI portfolio heavily invested in mid-cap equities and unlisted debt products in early 2020. Pre-COVID, this might have seemed adequately diversified. But under stress, the lack of liquidity, over-concentration in a single growth theme, and absence of hedging led to severe mark-to-market losses—some of which became permanent.
By contrast, portfolios constructed with embedded volatility buffers—such as sector rotation strategies, laddered maturities in debt, and partial exposure to global assets—absorbed the shocks and rebalanced to benefit from the recovery that followed.
The difference wasn’t asset selection. It was strategy.
In early 2020, many HNI portfolios were heavily invested in mid-cap equities and unlisted debt products. On paper, it looked diversified. But when COVID hit, the cracks appeared:
- Lack of Liquid assets
- Overexposure to one growth theme
- No hedging systems
All these led to evere mark-to-market losses—some irreversible.
Now contrast that with portfolios designed with volatility buffers:
- Sector rotation strategies
- Laddered maturities in debt instruments
- Partial global exposure
These portfolios didn’t just survive—they rebalanced and thrived in the recovery.
The difference wasn’t about picking the “right” assets. It was about having the right strategy.
At Growmont, we help clients build resilient portfolios through active, research-backed PMS strategies tailored to each investor’s journey.
Let’s talk about how strategy can safeguard and grow your wealth—even in uncertain times.
The Failure of One-Size-Fits-All Financial Solutions
Cookie-cutter portfolios are built for average investors in average times. But volatility is rarely average—and neither are the investors we work with.
HNIs and institutions have complex goals: legacy planning, cross-border tax concerns, long-duration liabilities, philanthropic trusts, operating businesses. None of these are served well by off-the-shelf allocation models.
At Growmont, we treat financial solutions as an evolving discipline, not a sales pitch. That means every portfolio is a function of who you are, what you want to achieve, and what you need to safeguard against.
Conclusion: Volatility Is Not the Problem—Unpreparedness Is
Markets will rise and fall. That much is inevitable. What separates resilient investors from reactive ones is a portfolio that has been engineered for uncertainty—not just for return targets.
Custom portfolio construction, powered by deep research and a consultative approach, is not a luxury. It’s a necessity for anyone serious about building and preserving wealth in today’s world.
At Growmont, our financial solutions are built for foresight, not just hindsight. If you’re re-evaluating your exposure in today’s volatile climate, we invite you to explore what a truly tailored portfolio looks like.
Markets will rise and fall. That much is unavoidable.
What separates resilient investors from reactive ones isn’t luck or timing—it’s a portfolio engineered for uncertainty, not just the returns.
In today’s complex financial landscape, custom portfolio construction—backed by indepth research and built through a consultative approach—is no longer a luxury. It’s a necessity for anyone serious about building and preserving wealth.
At Growmont, we design financial solutions with foresight—not just hindsight.
If you’re re-evaluating your exposure in today’s volatile climate, we invite you to explore what a truly tailored portfolio looks like.
Let’s build resilience, together.