Worried about protecting your investment gains? In this episode, I share my proven GPI system and 7 key strategies to safeguard your portfolio from volatility and downturns. Whether you're a new or experienced investor, these tips will help you build a resilient, diversified portfolio.

If you want to learn more about my approach, get my step-by-step options explainer here: https://options.investlikeapro.co.uk/ 

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IMPORTANT: Your Capital is at Risk. Investments may not be covered by the FSCS. This is NOT investment advice - for information purposes only. Please seek advice from a regulated advisor before investing. The value of investments can fall as well as rise - don't rely on past performance.

If your portfolio has made gains, but you are worried if certain parts are

volatile or might crash like crypto or similar risky stocks, here's the method

I've been using professionally for more than two decades, and it's proven

and tested to protect your portfolio.

Welcome to the Invest Like a Pro podcast, teaching you diversified,

investing with a simple set and forget approach to stocks and options, build

inflation, beating wealth for your future and recurring income For today.

And now your host, former JP Mordant, investment manager, Manish Kataria.

This system is one I have perfected over the last 20 years of

professional investment management.

I call it my GPI system.

G is for growth.

Growth beats inflation.

You must have growth in your portfolio.

It beats inflation.

It builds growth for your future, your future financial security.

Protection, which is what this video is all about.

Think of it like insurance against uncertain times.

Every good portfolio, a properly balanced portfolio must have

an element of protection.

And finally, income.

Income is useful for those people who need.

Cash today and a perfectly balanced, diversified portfolio should have at least

two of these three essential ingredients.

So let's dive into protection.

We'll examine seven highly effective ways to add protection

or insurance to your portfolio.

Number one, gold.

I own gold as an insurance policy alongside.

Stocks and ETFs.

It's a key part of our GPI portfolio.

Now gold is a great safe haven and usually performs really

well during general volatility.

If we look back at periods when stocks go through volatility, you'll see

that gold actually does quite well.

Go back to the dot com bubble when that came off.

Okay.

Go back to the global financial crisis.

Go back to, uh, the COVID correction.

And if you go back to 2022, when, you know, bonds and stocks were under pressure

because interest rates were going up.

Every single time gold performed really well, which is why it's a great safe

haven and insurance policy to add to your portfolio alongside your stocks and ETFs.

And we also do options on gold, not just to

own gold and to benefit from this insurance policy.

We also earn income whilst owning gold through options.

And finally, gold is much better when it's held in ETFs rather than physical gold.

Not only do ETFs track the gold price, they also protect you from tax and

they avoid storage costs and they are far safer than owning physical

gold held in random vaults somewhere.

Number two.

Options for safety margin.

Now, options can be a less risky way to invest versus

buying stocks in the usual way.

This may sound surprising, but options actually let you invest with

a safety margin and earn income.

So let's see how that works.

So if you select a good quality stock or an ETF, or you own gold or silver

through ETFs, if it goes up by 5%, you make 5%, but straight after purchase,

if it goes down by 5%, guess what?

You lose 5%.

But with options, you have a margin of safety.

So if it drops by 5%, you are protected because you're not buying

the stock or the ETF or gold at the current price, you are buying it

at what's called the strike price.

Okay?

And that's the price below the current market valuation.

So that's your safety margin.

Okay?

And regardless you'll still make the income on the options, whatever

happens to the stock price.

So not only does it give you safety margin, it also gives you ongoing income.

Number three options can also be used as insurance.

So if you need a more direct hedge, you can purchase insurance via options.

We do this by buying put options and it works exactly like your

car or your home insurance.

Okay, so let's say you own something which has done really well.

A stock or an ETF or gold or silver, whatever you own.

Let's say it's done really well and you are at a level

where it's near all time highs.

You don't want to sell it 'cause you are a long term holder.

What you can do is you can pay a relatively small options premium.

Or call it an insurance premium to cover you against any losses

on that stock if they happen.

So it's a great way to benefit from any downside or any expected downside.

And the worst that can happen is that you'll just lose that option premium.

But you'll enjoy continued upside on the stocks.

But if the stock does come down, you'll make money through

your options insurance premium.

Number four, diversify globally.

I see a lot of investors who.

Just by the S&P 500 index, for example, and that's US equities.

Now, the problem with that is that the US is at a 75 year high

versus the rest of the world.

Now, some investors are concerned about a tech bubble in the US stock

market, and the US has actually

underperformed this year for the first time in a while it's underperformed

the rest of the world by some margin.

So my message is don't just buy the S&P 500 index.

You need to be globally diversified.

And actually there are some really interesting things going

on in the rest of the world.

There's lots of positive developments in Asia, in China and India and in Europe

there are some really interesting stories going on in there and both of those areas,

both of those regions have outperformed the US this year, 2025, and we'll probably

continue to outperform going forward.

So really, if you want to create a more diversified, balanced portfolio,

and if you want to protect your portfolio, don't just own the US, own

the world, which also includes the US.

Okay?

And remember, the US is just one country.

Dominated by one huge sector, which is technology.

It's being run by a president who can say or do anything to crash

the US stock market just like he did with his tariff announcement.

Number five, high dividend stocks.

High dividend stocks and REITs are fairly defensive.

They tend to hold up reasonably well, just like this one.

This is one of our UK high dividend ETFs, which gives you not just a

5.3% dividend yield every year, plus it gives you capital gains like you

see here over the last five years.

Okay, so remember in a downturn, dividends hold up much better than capital values.

So if you're looking for added protection own assets, own ETFs, own stocks that

give you higher dividend yield, plus some potential for capital gain, and

that will provide a much smoother, much more defensive exposure to stocks.

And yes, there are a whole load of people in Europe, in the US who have

been holding high dividend stocks for years and decades, and they're now

in the fortunate position of being able to live off their dividends and

continue to own their stocks for capital growth, but can live off the dividends

for their day-to-day income needs.

Okay, so it's a really smart strategy to be owning high dividend stocks

that are also quality companies, blue chip, solid, dependable companies,

which also happen to pay off very attractive levels of dividends.

Number six, you can just decide to do nothing.

For a long-term investor one very good option is to do nothing.

The legendary ex Fidelity fund manager, Peter Lynch, described it perfectly.

He said, more money is lost waiting for corrections than

in the corrections themselves.

Now, making predictions is easy, but timing is hard to get it right.

Remember, you have to sell at the right time and then buy back at the

right time, which is almost impossible.

You can see, you know, for the last, you know, a hundred odd years.

All of the crises we've lived through recessions and pandemics and wars,

and interest rates and recessions, et cetera, et cetera, et cetera.

Markets always bounce back regardless of what the event is.

Okay, so instead, sometimes it's far better just to buy

in, downturns not to sell.

Myself and my investors do exactly that.

We use pound cost averaging to drip feed money systematically into the market

to take advantage of the volatility.

Use volatility to your advantage.

Number seven.

You can put stop losses on your positions.

How do stop losses work?

Well, you buy a stock or an ETF, and if you're concerned about a potential decline

when you place the trade, you can leave an automated instruction that gets you out.

In case it gets worse.

So you can leave a stop-loss at say 10% lower.

And if it gets worse than 10%, well you are out at the 10% level.

Now, a stop-loss sounds sensible as a protective measure, right?

But actually in reality, it can make you sell at the lows when instead,

you should be buying at the lows.

Watch my video on stop-losses.

It really changed the way people think about stop losses.

You'll see it on the screen over here somewhere, and it shows a far better

alternative to stop-losses using options, which not only limit your downside

and give you downside protection.

They also provide income.