Find your Right Asset Allocation

Asset allocation is a strategy wherein it makes sure that you are always invested in the best performing asset class. Having a proper asset allocation plan after considering your risk profile is the key to financial planning.

Why consider asset allocation? Read the scenarios below

Scenario # 1: Rs. One lakh invested at 8% over 25 years grows to Rs.6.84 lakhs.

Scenario # 2: Rs.One lakh divided equally among five investments.( One loses principal and other four earns 0%,5% , 10% and 15% average annual returns).This diversified portfolio will grow to Rs.9.62 lakhs in 25 years.

Below is a general representation for asset allocation.

Age 25-40 (Accumulator)
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  • 5-10% as liquid assets/ cash/ savings account
  • 10-30% in debt instruments like PPF, EPF, RD in a bank, govt.bonds, gold, NSC
  • 70-80% in equity and equity mutual funds
Age 40-55 (Mid life transitional)
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  • 30-40% in debt instruments like PPF, EPF, RD in a bank, govt.bonds, gold, NSC
  • 40-50% in equity and equity mutual funds
Age 55-60% (Harvestor)
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  • 10-30% in liquid assets/ cash/ savings account
  • 20-70% in debt instruments like debt mutual funds PPF, EPF, RD in a bank, govt.bonds, gold, NSC
  • 15-25% in equity and equity mutual funds
Age 60 and above (Post retirement)
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  • 20-40% as liquid assets/ cash/ savings account
  • 30-70% in debt instruments like fixed deposit in a bank, govt.bonds, gold, debt mutual funds, NSC
  • 5-10% in equity

In case you wish to know more on how we can help you find a suitable asset allocation based on your goals, please contact us. We would be happy to assist you and take you through your investments based on your requirements.

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