Experts suggest to keep this much in equity, gold, real estate



The asset allocation should be based on the overall financial goals of a person.


© Provided by The Financial Express
The asset allocation should be based on the overall financial goals of a person.

The performance of your investment portfolio over the long term depends on how efficiently you have allocated funds across different assets. Rather than sticking to one asset class, it’s always better to spread your money across different assets such as equities, debt, real estate, gold or even other alternative assets. As different assets react differently to the external factors, the likelihood of the value of all asset price going up or down at the same time is remote. If an event has a negative impact on the value of a specific asset, the less-impacted assets balance the portfolio returns.

As far as asset allocation is concerned, it depends on individuals’ risk appetite and the number of years to goals. Typically, equities suit when the goals are far away. Nearing goals, debt assets such as debt funds fit the bill. The most important rule is to maintain the asset allocation and not change it mid-way before reaching the goal.

If you are investing without an asset allocation plan in place, you may not be following the financial planning process in its

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