In simple terms, the phrase ‘don’t put all your eggs in one basket’ gives a good sense of asset allocation. It is about investing in different asset classes like domestic equity, debt funds, real estate, gold, cash and international equities. Each asset class has different risk and return characteristics and asset allocation is about deciding the right mix and weight of each asset class in a portfolio.
The need for asset allocation becomes profound during sharp drawdowns which we witnessed during 2008-09 crash, March 2020 pandemic induced fall and the recent correction due to Russia-Ukraine war.
Investors can minimise the impact of such shocks by having a diversified portfolio. Research has shown that the primary decision of how much to invest in equity, debt and other asset classes is the main driver of the performance of a portfolio, over the long term.
Join us for an engaging chat with Kirtan Shah, Founder, Credence Wealth Advisors, to learn how asset allocation can help your clients achieve their goals. The webinar is scheduled for Tuesday, March 15, 2022, at 4 pm.
Register here.
