1/10
We all wish to be #FI
Investing sensibly is the only way to achieve this.
Hence #AssetAllocation becomes important , as we need to, BOTH PROTECT & GROW OUR CAPITAL to meet our goals in life.
A basic thread in simple language for beginners.
If useful , pls do share 😇🙏
We all wish to be #FI
Investing sensibly is the only way to achieve this.
Hence #AssetAllocation becomes important , as we need to, BOTH PROTECT & GROW OUR CAPITAL to meet our goals in life.
A basic thread in simple language for beginners.
If useful , pls do share 😇🙏
2/10
Asset Allocation is an Investment Portfolio technique .
It aims to mitigate the risk by distributing our investable surplus across different asset classes like Equity, Debt, Gold, Real Estate, MF, Cash or Alternates after Risk Profiling of the investor.
An example 👇
Asset Allocation is an Investment Portfolio technique .
It aims to mitigate the risk by distributing our investable surplus across different asset classes like Equity, Debt, Gold, Real Estate, MF, Cash or Alternates after Risk Profiling of the investor.
An example 👇
3/10
ITS NECESSITY
Every Asset class has its risks & it's impossible to predict which would fetch the best possible returns.
Imagine if one had invested only in Equities in 2007/ 2019 or in Real Estate at its peak in 2011 with a hefty loan with no shock absorber in place ! 🤷
ITS NECESSITY
Every Asset class has its risks & it's impossible to predict which would fetch the best possible returns.
Imagine if one had invested only in Equities in 2007/ 2019 or in Real Estate at its peak in 2011 with a hefty loan with no shock absorber in place ! 🤷
4/10
A simple way to avoid this risk is to invest in a basket of assets whose returns aren't correlated to one another.
At the same time ensure YOU DON'T OVER DIVERSIFY into every possible asset that exists ! 🤷
Stay away from fancy Bundled Products & KEEP IT SIMPLE .
A simple way to avoid this risk is to invest in a basket of assets whose returns aren't correlated to one another.
At the same time ensure YOU DON'T OVER DIVERSIFY into every possible asset that exists ! 🤷
Stay away from fancy Bundled Products & KEEP IT SIMPLE .
5/10
HOW TO GO ABOUT IT
* Examine your Finances
* Understand your Risk Profile.
* Map out your Financial Goals - Short,Medium & L.T
* Keep return expectations realistic.
* Arrive at a Rate of Return to meet goals.
* Decide on Asset Allocation.
*Take Professional help if needed!
HOW TO GO ABOUT IT
* Examine your Finances
* Understand your Risk Profile.
* Map out your Financial Goals - Short,Medium & L.T
* Keep return expectations realistic.
* Arrive at a Rate of Return to meet goals.
* Decide on Asset Allocation.
*Take Professional help if needed!
6/10
FEW POINTS TO REMEMBER
* Everything is subjective from individual to individual.
* Hence Cloning won't work here.
* Planning Correctly is the key.
* Rebalancing the Portfolio would have to be done occasionally ( not regularly) when the ratio gets skewed / changing needs .
FEW POINTS TO REMEMBER
* Everything is subjective from individual to individual.
* Hence Cloning won't work here.
* Planning Correctly is the key.
* Rebalancing the Portfolio would have to be done occasionally ( not regularly) when the ratio gets skewed / changing needs .
7/10
Generally ,
An investor's ability to absorb risk is inversely proportional to his age .
So if age is on your side then one can invest aggressively in Equities ( provided one has knowledge) .
Else better to stick to Index funds with good exposure.
Generally ,
An investor's ability to absorb risk is inversely proportional to his age .
So if age is on your side then one can invest aggressively in Equities ( provided one has knowledge) .
Else better to stick to Index funds with good exposure.
8/10
REALISTICALLY speaking ,
Individually, all assets will not give you the best possible returns but cumulatively they shall ensure
Capital Protection as well as a decent CAGR over time.
And that is more than enough for creating & maintaining a healthy Retirement Corpus.
REALISTICALLY speaking ,
Individually, all assets will not give you the best possible returns but cumulatively they shall ensure
Capital Protection as well as a decent CAGR over time.
And that is more than enough for creating & maintaining a healthy Retirement Corpus.
9/10
As @dmuthuk rightly states,
Let's focus on what we CAN CONTROL aka :
* Saving Consistently
* Disciplined Investing
* Healthy Asset Allocation
* Behaviour during Drawdown & Euphoria.
And LET GO of what we cannot control.
Let's not over complicate things !
As @dmuthuk rightly states,
Let's focus on what we CAN CONTROL aka :
* Saving Consistently
* Disciplined Investing
* Healthy Asset Allocation
* Behaviour during Drawdown & Euphoria.
And LET GO of what we cannot control.
Let's not over complicate things !
10/10
FI can be achieved with common sense , patience & discipline.
Stick to a process .
It takes 2 decades realistically speaking to achive FI when starting from scratch.
*THE END*
Tagged you for reach 😇
@dmuthuk
@position_trader
@Vivek_Investor
@FI_InvestIndia
FI can be achieved with common sense , patience & discipline.
Stick to a process .
It takes 2 decades realistically speaking to achive FI when starting from scratch.
*THE END*
Tagged you for reach 😇
@dmuthuk
@position_trader
@Vivek_Investor
@FI_InvestIndia
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