Asset class diversification is more crucial now than ever

Two decades ago, investing mostly meant parking money in fixed deposits, property, or maybe equities, leaving little room for diversification—spreading investments across various asset classes.

- Dipti Sharma

Two decades ago, investing mostly meant parking money in fixed deposits, property, or maybe equities, leaving little room for diversification—spreading investments across various asset classes. Today, the landscape has evolved significantly, with a broader array of asset classes and innovative avenues available to investors.

With Indian equities facing uncertain times—potential disruptions from US President-elect Donald Trump's policies, Union Budget 2025-26, and foreign investment outflows, among others—experts recommend asset class diversification to ride out the volatility.

Shantanu Bhargava, managing director and head of listed investment at Waterfield Advisors, believes the core principles of asset allocation remain constant. However, he said, "It has become even more critical now, as 2025 is expected to bring heightened volatility due to potentially disruptive impact of Trump's policies on the global economy and fund flows, China's slowdown, our economy's slowdown, and pockets of excessive valuations in our stock markets."