Thread by @Kiran24Rajput

"Asset Allocation 2.0"
Detail 🧵
Definition: 'Asset allocation is the process of investing across diversified 'Asset Classes'.
#investing #wealthcreation
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2/
Don't care whats your age is - 'if you have missed creating wealth at early age, no regret.'

I started understating Asset Allocation, Wealth Creation & Investing in late 30s.. .

In-fact started planning & investment journey much later, I mean few years back only...

3/
Before you get into 'Planning & Investment' - few basics you have to accomplish:
❶ Pre close all investments linked with Insurance
❷ Buy enough of medical insurance outside office
❸ Buy a Term Insurance, min 1 Crore

Lets Begin 🕺💃👇

4/
Types of 'Asset Classes'
⓵ Real Estate - Site, Flat, Farm Land & Comm
⓶ Gold & Silver - Physical
⓷ Equity - MFs, Stocks
⓸ Debt - Gilt, Short Term, Income, Maturity & Liquid
⓹ PF/VPF/ NPS
⓺ Cash - FDs & Liquid Funds
⓻ Start-ups
⓼ Cryptocurrency & Derivatives..
👇

5/ RE - the most non standardized & illiquid asset class.
Returns 6-8% if you are lucky.. .
Hassles👇
1.Mafia
2.Cheating
3.Bribing
4.Headaches - paying taxes, maintenance, encroachment, searching tenants & resale.

I wish to go with a Flat to stay & 2-3 acres of farmland...

6/ Gold & Silver
Decent percentage in Gold & Silver is must, most investors prefer paper gold & silver - MF, Sovereign Bonds etc.

I wish to go with Physical Gold & Silver - it serve my 2 purposes:
❶ Investment in precious metals
❷ Keep my Wife & Daughter Happy!!

7/ Equity.. .
We all are aware of a crude rule: when it comes to percentage of Equity Allocation= (100 - Age).
For me it suggests more than 50% to be invested in Equities.
Equity Investment Progression👇
MFs
⏬
Direct Stocks

Few Hybrid & Flexicap MFs & a Model Equity Portfolio👇

8/ Debt
Types of Debt Funds:
Liquid
Money Market
Dynamic Bond
Corporate Bond
Gilt
Credit Risk
Low, Medium & Long Duration
Ultra Short
Overnight etc.

Since I have sizable PF/VPF - I have not invested in any debt instruments.
More on Debt Investment👇
groww.in/p/debt-funds/

9/ PF, VPF & NPS
A must asset class, what should be the percentage allocation, I will little later.

PF & VPF - we all are aware of it.

NPS - National Pension Scheme is a social security initiative by the Central Government. Please read details here👇
cleartax.in/s/nps-national…

10/ Cash
One more must asset class - required for 'Emergency Fund'
Where I should keep Cash? Definitely not below the bed unless its a black money.
Keep it in FDs, RDs, Saving a/c and Liquid Funds. Ensure you have access to it in 'No Time'

11/ Start-ups
There r around 7K plus start-ups in India, $ 2 B Invested and whooping $ 25 B Follow ons.
Now u decide, u want to start a "Start-up" or invest in "Start-up"🙂
Its a must try for those who hav already achieved Financial Freedom
Details here👇
angel.co/india

12/ Cryptocurrency & Derivatives
Crypto - is the most talked about investment among the millennials. I dont mind allocating 2-5% if Indian Govt make it Legit Investment.

Derivatives - is a quick money maker or loser, I never made money here.

13/ Model 'Asset Allocation Class'👇

14/ What are the factors decide 'Asset Allocation'?
1. Age
2. Time Horizon
3. Financial Goals
4. Commitments & Dependents
5. Risk profile - Conservative, Income, Balanced, Growth & Aggressive

15/ I found this interesting 'Asset Allocation' by ET Money:

16/ 4 out of last 8 years, Equity has given the "Best Returns"👇

17/ Why diversified required? Look at Gold & Equity - their returns are always contrast👇

18/ Few Asset Class Performance since 2006👇

19/ If you are not sure on "Diversified Asset Class" investment, you can as well start with Balanced Funds - based on market condition they change the Equity - Debt allocation percentage.
Here is one example👇

20/ When is your Asset Allocation is effective?
1. Improve Risk Reward Equation
2. Works best with assets having Weak Performance Co-relation
*End*

Please RT to reach-out individuals who are in the process of wealth creation.
🤝