Reach your financial goals faster, with the right mix of investments
Do not put all your eggs in one basket, so goes the saying. It is the same with your investments. Asset allocation is the process of dividing your investments among different asset classes such as stocks, bonds, real estate and cash in a way that maximises your wealth by reducing the overall risk.
You should consider an asset allocation strategy based on:
Time horizon - how long you expect you'll need your assets to last
Risk tolerance - how willing you are to endure the market's ups and downs in exchange for more growth potential over the long term
Financial situation - including your lifestyle and assets
Asset allocation through Mutual Funds:
There are several advantages of arriving at an optimum asset allocation for your portfolio by investing in mutual funds compared to directly investing in stocks or fixed return instruments. Here's how:
Mutual fund investing is affordable. That's because the minimum amount to be invested in a mutual fund is low and you get access to a diversified portfolio even with a very small amount of money
Likewise, investors who need flexibility to exit their investments (in case if open-ended schemes) as and when they feel like, find mutual funds convenient for the easy exit option they offer
There is a deal of great transparency in the way investments are done and managed by the fund managers as the industry is well regulated and falls under the purview of the market regulator, SEBI
- Expert management:
Your mutual fund investments are handled by experienced professionals who are well versed with the changing dynamics of the markets and economy
- Easy diversification:
Mutual funds score the most in terms of instant and easy diversification they offer by spreading your money across different investments like equity, fixed income, gold and real estate
With an optimum asset allocation strategy, mutual funds give you the ability to make the most of your investments while spreading out your overall risk.
An investor awareness initiative.
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
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