Will opening two demat accounts help mitigate risk? If yes, then beyond what amount should the second demat account be opened? Or do you think one demat account is sufficient?
-Jitendra
We don’t see the rationale for having a second demat account to mitigate risk. The only reason why you should have a second demat account is if you're an active trader of shares, and you have a portfolio of long-term investments. You can have two demat accounts to keep these two portfolios separate, and de-risk yourself partially. But if you're a long-term investor who chooses stocks carefully and buys thoughtfully, one demat account would suffice.
This article was originally published on October 31, 2012.
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