Limit your equity allocation
Of the total amount you invest in mutual funds, only a certain portion should go into equities. A higher equity exposure means you have the potential to earn higher returns, but it also means your portfolio will be more volatile. Since you are a new investor, you should not overestimate your risk appetite. Remember that the pain caused by loss is felt three times as acutely as the pleasure felt upon making a similar amount of gain. You will only know your true risk appetite in the midst of a bear market. Until then, you should be conservative and take only a moderate amount of equity exposure. So, if you are investing Rs. 100, it would be advisable to invest not more than Rs. 50-60 initially inequities.
One rule of thumb that is applied for deciding equity allocation is 100 less age. So, if you are 30 years old, the rule of thumb says that you may allocate 70 per cent to equities. However, we would suggest that it is better to err on the side of caution and allocate less initially. Later, as you become more accustomed to the volatility of equities, you can hike your exposure to this asset class.
Allocation to fixed income and gold
Once you have decided on your equity allocation, it is easy to decide your overall asset allocation. If, for instance, you have decided on a 60 per cent allocation to equities, then gold can make up another 10-15 per cent of your portfolio. This means that debt or fixed income will make up the balance of 25-30 per cent of your portfolio.
هذه القصة مأخوذة من طبعة June 2021 من Investors India.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك ? تسجيل الدخول
هذه القصة مأخوذة من طبعة June 2021 من Investors India.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك? تسجيل الدخول
Thematic Fund Or Sectoral Fund, Which Fund Suits You?
A thematic fund is a type of mutual fund that focuses on investing in companies based on specific themes or trends.
Be Kind To Your Kidneys
The kidney is a vital organ in our body which is four inches long and two and a half inches in width.
Have You Included A Passive Fund In Your Portfolio Yet?
The assets under management (AUM) of passive funds recently crossed the Rs. 10 lakh mark. While a significant portion of this money comes from institutional investors, such as the Employees Provident Fund Organisation (EPFO), these funds are also gaining popularity among retail investors.
Mutual Fund
1. SEBI allows mutual funds to buy and sell credit default swaps (CDS)
Insurance News
1. The finance minister has launched a new NPS scheme named NPS Vatsalya
ASK THE EXPERT
Dear Sir, I attended your webinar on post-retirement financial planning. As advised by your good self, I invested in NPS after retirement.
Market Mystery: Some Important Investing Lessons from Fund Managers Themselves
Mr. Mahesh Patil is the Chief Investment Officer (CIO) of Aditya Birla Sun Life AMC Limited. As the CIO Mahesh oversees INR 3 lakh crore of assets under management.
How to make a cautious entry into equity funds during a bull market
The number of mutual fund folios has been rising, with flows via the systematic investment plan (SIP) route reaching new highs.
All that you need to know to kickstart your retirement planning process
We all enjoy planning for the future. It’s a good idea to plan ahead of time for anything, from the day’s activities to a vacation.
5 Steps To Achieve Your Financial Goals
From a beach house, a Jaguar, to traveling the world – there are many things in life that we want to accomplish.