Term of the day: Asset allocation
Most of you have an asset allocation, whether you know it or not
When you take a pool of your money and invest it across different assets like gold, fixed deposits, equity and even real estate, the process is called asset allocation with a view to diversify your risk.
Most of you have an asset allocation, whether you know it or not. Even if you are just putting money in fixed deposits and buying some gold every month, you have an asset allocation. This may not be a conscious division of funds, but your asset allocation determines how much return you will earn on an aggregate basis.
The objective of having a thought-out asset allocation across assets is to build a portfolio that closely matches your future return expectation, while keeping in mind the risk or volatility that you can bear. Your strategic long-term asset allocation ideally should be linked to your goals.
Keep your asset allocation dynamic, but don’t alter your fianancial goals to fit the allocation just for higher returns.
- Energy tech firm Climate Connect looks to raise $10 million
- Nekkanti raises $30 million pre-IPO funds from Motilal Oswal, others
- Dubai recipe for economic success looks stale as markets slump
- Gold price maintains uptrend on global cues, jewellers’ buying
- Donald Trump and the US dollar: Actions speak louder than words
Editor's Picks »
- What ABB India’s performance in June quarter says about capex growth
- Bajaj Finance does well in Q1 even as competition hots up
- Kotak Mahindra Bank: The perils of being priced to perfection
- Higher cane price crushes hopes of sugar mills
- Market optimism before 2019 general election: History may not repeat itself