Hi Abel,
Before I start, let me tell you two things. One, I'm not a finance expert. Two, I dont invest in stocks, but mutual funds. I'm a hardcore marketing guy and always work on instincts and common sense.
Now, your question is indeed good, but very generic and common. Every investor in this world strives to maintain a balanced portfolio. However I can assure you that no body has been consistently able to beat the market on a regular basis, not even the best fund managers.
The key behind balancing your portfolio is diversifying, and doing it correctly. From your current port folio I understand that majority of your holdings are in Technology, specifically IT. Well nothing wrong because these are the companies who have done exceptionally well and boosted the market numbers. Having said that, not all companies have done exceptionally well. So about a couple of decades ago, if you may have thought that some other XYZ bangalore based company was more profitable and gave a skip to Infosys, you would have repented your decision today. So the first diversification that you can do is horizontal one. You may invest in variety of companies from one particular sector that you think has more promise. In that way you balance your folio, negate high risk and at the same time dont lose much on the gains. Make sure that you hold not more than 10-15% of stocks of these companies. Work on the opinion of industry experts as well as your instincts while selecting your stocks.
Next way is vertical diversification. There may be a number of sectors that are booming. Lets say now real estate is as hot as IT. Probably more than that. So you may also look at replacing the existing stock with some other having an equal growth opportunity. At the same time, dont forget the long term advantage that you may get out of this. There were sectors that showed an initial promise and fizzled out in time. So be careful while investing in a new unexplored sector. However, this is what I'm talking keeping short term growth in mind. If you are a long term player, you may also look at companies who do not look so promising on the stock market on a daily basis, but have shown steady growth with time. For instance consumer electronics and automobile. But be careful about selecting the companies you invest in.
Always keep 10% aside to invest in other instruments say debt, bonds and divident based mutual funds.
hmmm... I guess the post is getting longer. Have I answered your question? May be in a generic way. I will come back with some thing better. Go through this link, you may find it good.
http://www.investopedia.com/articles/03/072303.asp
One advise: Keep patience, a lot of it.
