Diversify investing amidst market uncertainty, using this formula to get the most out of your money.

Currently, there is uncertainty in the stock market, with similar pressures in the economies around the world. However, if you look at all the investment options, you will see that not all investment options have returns in one direction. In such a situation, some assets are showing loss and some are showing profit. Investment advisors […]
 


Diversify investing amidst market uncertainty, using this formula to get the most out of your money.

Currently, there is uncertainty in the stock market, with similar pressures in the economies around the world. However, if you look at all the investment options, you will see that not all investment options have returns in one direction. In such a situation, some assets are showing loss and some are showing profit. Investment advisors always recommend diversifying the portfolio due to the varying dynamics of investment options in different situations. They say that anytime your entire investment is only one Property Do not invest in According to him, investors should invest their money in gold from equities according to their risk appetite. However, the question arises whether investors (Stock Market) On what basis should I invest my money in all these assets? So that the risk can be kept to a minimum with maximum compensation. Axis BankOne of his blogs has answered this question. In which the bank has given information about assets, asset allocation and investment formula. Also read and understand how to invest your money the right way.

what is asset allocation

Asset allocation means how much of your investment is made in certain assets like Equity, Gold, Debt, Property. And how much cash balance you can use or invest in a specific asset as and when required. The ultimate goal of asset allocation is to minimize the risk of investing in your money and maximize returns.

What are the characteristics of different properties

According to Axis Bank, each asset has its own risks and returns. As such, equities can receive very high growth and dividend income and can be redeemed quickly. However, the risk is also very high. You can invest in it through stocks and MFs. On the other hand, gold and debt are safer investment options, although they do not yield as fast as equities and can impact the initial cash return on investment in debt. These assets can be invested in stocks, FDs, mutual funds, ETFs etc.

What is an investment formula?

As per Axis Bank, the asset allocation is based on your risk appetite and risk appetite means how long you can leave this investment so that you do not face any problem even during small fluctuations. Had to do In other words, what is your goal in terms of investment timing? You can do asset allocation based on the following formula.

1 to 3 years

If you think that this amount may be needed in one to three years for marriage, children’s education or any big expenditure, then it is better to keep 95 percent in debt and invest 5 percent in gold, stay away from equities . , Because sometimes it takes years to recover after a sharp drop in stocks, even if the rush to recovery may cover your entire loss in the long run. But you don’t have that much time.

3 to 5 years

If you think 3 years ago you didn’t need money. But then you have to withdraw money, keep 40% of your money in equity, 50% in debt and 10% in gold.

5 to 8 years

For a tenure of 5 to 8 years, it is better to increase your investment in equity and invest 55% in equity. Invest 30% in debt and 15% in gold

more than 8 years

If you can leave your money in the market for more than 8 years to grow, you should take more risk. In fact, even in the midst of sharp volatility, it is common for the market to experience very high returns in the long run. The Sensex has almost tripled in the last 10 years. Simultaneously, keep the gold holding at 15% stable for more than 8 years and invest the remaining amount in debt.