IT Stocks In Your Mutual Fund? Expert Suggests Exposure Limit After Brutal Selloff

In light of the recent significant selloff in the IT sector, financial experts are advising retail investors to limit their exposure to technology stocks within mutual funds. According to industry analyst Desai, a prudent cap of 5% to 7% of the total investment portfolio is advisable. This approach favors diversification and risk management, suggesting that investors should prefer mutual funds—either actively managed or passive index funds—over direct stock investments. The IT sector has faced considerable volatility recently, prompting this cautious stance. By maintaining a limited exposure, investors can mitigate potential losses while still benefiting from the sector's recovery prospects. This recommendation serves as a timely reminder for retail investors to reassess their portfolios in the wake of market fluctuations.