Balanced Funds Ensure You Don’t Have To Worry About Asset Allocation

The Concept Of Asset Allocation Asset allocation is basically a strategy where investors divide their funds between debt and equity, depending on their risk tolerance, investment objective and diversification needs. The final outcome of all asset allocation strategies is to achieve investment goals and that depends on the age and risk tolerance levels of investors. One can invest in equity, but the debt market is also liquid in India. People also invest in real estate and physical gold but these are very illiquid assets relatively. Asset Allocation Strategies The general perception is that the asset allocation needs to be based on the age of the investor. For example, someone who is 30 years old should invest 70 per cent or more in equity. But to my mind, that’s a very broad way of looking at it. One also has to factor in the valuation of an asset class. So, if someone is...