Thali or Junk Platter: What Does Your Portfolio Look Like?


Before we dive into charts, returns, and ratios — let’s talk food. 🍽️

Because your investment portfolio is a lot like your plate.

A well-balanced Indian thali — with proteins, carbs, fiber, and taste — is thoughtful, wholesome, and nourishing.
Now compare that to a plate overloaded with burgers, fries, nuggets, and pizza — more variety, but less balance.

👉 That’s the difference between diversification and diworsification.

Now let’s apply this to your mutual fund portfolio…

“If everything in your portfolio is green — are you happy or worried? ”If you smiled at “happy”, we need to talk.

Because that’s where most investors go wrong — and don’t even realize it until it’s too late.

Let’s dive deep.

The Illusion of Diversification: Are You Just Cloning Your Portfolio?

Most investors believe the age-old advice:
💬 “Don’t put all your eggs in one basket.”

So what do they do?

They buy:

  • 5 Large-cap funds

  • 2 ELSS schemes

  • 3 Nifty 50-based ETFs/ Index funds (Also wondering whether Passive index funds are better OR active funds?If you haven’t read it yet, go check out my blog “Is Your Index Fund Really Serving You?” )

  • 4 Small Cap / Mid cap funds

  • 6 Multicap/Flexicap funds

  • And maybe a few more Sectoral or Thematic funds…

…and then sleep peacefully thinking they’ve diversified — sometimes with 20 to 50 funds in the portfolio! 😅 But every time I see such a bloated list, one famous dialogue comes to mind:

“Babu Moshai… zindagi badi honi chahiye, lambi nahi.” 🎬
(Life should be meaningful, not just long.)

Same goes for your portfolio.
It should be well-constructed, not just long and complicated.

But in reality?

They’ve just cloned their portfolio 10-15 times over.
Same index. Same stocks. Same benchmark.
Same risk.

This is not diversification. This is diworsefication.

Why More Isn’t Always Better

Let’s break a myth:
Quantity ≠ Quality.

A portfolio with 15-20 “diversified” schemes often ends up being more concentrated than one with just 5 carefully selected ones.

✅ A study showed:
Top 15 performing mutual funds delivered an annualized return of 15.4% over 10 years.
But a portfolio of just 5 least-correlated schemes delivered a better return of 16.7% — with lower volatility.

Let that sink in.

Blind diversification = false sense of security.
Smart diversification = true structural balance.

What Smart Diversification Actually Means

Diversification isn’t about owning everything.
It’s about owning the right mix of different things.

Here’s what real diversification looks like:

✅ Assets that move differently:

  • 📉 When equity falls…

  • 📈 Debt or gold should rise.

This negative correlation is what protects your capital.
Your portfolio should have shock absorbers, not just different paint jobs.

✅ Smart Overlap Analysis:

Ever checked how many schemes in your portfolio are holding the exact same top 10 stocks?
That’s not variety. That’s duplication.

✅ Diversification Across Asset Classes:

  • Equity + Equity + Equity ≠ Diversification

  • Equity + Debt + Gold = Real Risk Shield

Is Your Portfolio a Time Bomb?

Ask yourself:

🔍 Are your investments truly diversified, or just copies of each other?

🔍 Do your funds behave differently in different market cycles?

🔍 Will one asset support you when another fails?

If your answer is unclear… your portfolio might be a ticking time bomb.

Because when all your assets turn red together, that’s not risk management — that’s just wishful thinking.

So, What’s the Fix? 

If you’re nodding along, here’s what you can do today:

  1. Review for Overlap

    • Use tools or expert guidance to check where your schemes share common holdings.

  2. Focus on Correlation, Not Just Categories

    • A Large-cap and a flexi-cap fund might still behave similarly. Choose those with lower correlation.

  3. Diversify Across Asset Classes

    • Include debt, gold, REITs, or even international exposure where suitable.

  4. Simplify Your Portfolio

    • Fewer, well-selected funds can outperform a cluttered collection.

  5. Get a Second Opinion

    • Sometimes, what looks good on paper doesn’t work in practice. That’s where an expert comes in.

    6. Final Thoughts

    Don’t let diversification turn into diworsefication.

    Your portfolio isn’t a buffet.
    It’s a carefully curated strategy for your financial life.

    So ask yourself again: Are your assets truly diversified… or just scattered?

    (Disclaimer: Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully before investing. Past performance is not indicative of future results. The examples and data presented here are for educational purposes only and should not be construed as investment advice. Kindly consult a SEBI-registered financial advisor or CFP before making any investment decisions.)

    — Sonali Karia, CFP®
    Founder, IART Financial Planning Services

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