Review portfolio at every major life event

By Atul Shinghal

How you invest and where you invest are two factors that define whether you will be able to achieve your financial goals within the stipulated timeline. Balancing risk and growth when selecting an investment style depends on several key factors.

Financial goals

Your financial goals are a key factor in determining your investment style. Short-term goals (1–3 years) may require a more conservative approach, while long-term goals (10+ years) can often accommodate more risk. For example, a home purchase in 5–7 years may call for a moderate approach, children’s education in the next 10–15 years might require a moderate-to-aggressive strategy, and retirement planning over 20+ years can start with an aggressive approach for younger investors, becoming more conservative as retirement approaches.

Also Read ‘In 2025, take the middle path through diverse investments’ What will drive stocks in 2025? Budget, earnings, and more Stick with diversified equity funds, avoid sectoral funds now: PPFAS Mutual Fund CIO Rajeev Thakkar 6 high growth sectors to watch for maximum investment returns in 2025

Understanding your risk appetite is equally crucial for selecting the right investment style. For instance, a conservative portfolio might allocate 15–20% to equities, 60–70% to fixed income, 5–7% to alternatives, and 0–5% to cash. On the other hand, an aggressive portfolio would allocate 60–70% to equities, 10–15% to fixed income, 5–10% to alternatives, and 0% to cash.

Also ReadDebt funds flock to state bonds Time horizon

The time horizon also plays a significant role. Longer horizons allow for more aggressive strategies, as there’s more time to recover from market downturns. As your time horizon shortens, it’s wise to shift towards a more conservative allocation to protect your gains.

Additionally, your current financial situation—income stability, existing assets and liabilities, and emergency fund considerations—should inform your investment style. Those with stable incomes and strong financial foundations may take on more risk, while those with less predictability should be cautious.

Remember, your investment style should evolve as your circumstances change. Conduct a thorough review of your portfolio at least annually, or when significant life events occur, such as marriage, the birth of a child, or a job change. To rebalance, you can gradually adjust your asset allocation by selling some investments and purchasing others to maintain your desired risk level.

 » Read More

Related Articles

Big relief! No more charges for updating nominee details in PPF accounts

Now, you won’t be charged for updating or modifying details of the nominee in your Public Provident Fund (PPF) account as “necessary changes” are being made to the Government Savings Promotion General Rules 2018. “In the Government Savings Promotion General Rules, 2018, in Schedule II, under ‘Fee to be charged for services,’ the words and

Trump tariffs drive investors to Gold! Here are 3 Gold ETFs to invest in right now

US President Donald Trump’s sweeping reciprocal tariffs have created a stir in the global markets, impacting almost all asset classes. Equities slumped, bonds surged, and gold hit new highs. Investors’ concerns grew, and their direct impact is visible on the prices of gold. Investors scramble towards safe-haven assets like gold in times of uncertainty, and

Can Trump tariff boost India’s textile industry? A look at 3 crucial factors

US President Donald Trump has announced a flat 26 per cent tariff on Indian goods with some exemptions and according to analysts, this comes as a double-edged sword for India’s textile sector. While the increased tariff is likely to impact exports with the US being a major market for Indian textiles, it also gives India’s

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

0FansLike
0FollowersFollow
0SubscribersSubscribe
- Advertisement -

Latest Articles

Big relief! No more charges for updating nominee details in PPF accounts

Now, you won’t be charged for updating or modifying details of the nominee in your Public Provident Fund (PPF) account as “necessary changes” are being made to the Government Savings Promotion General Rules 2018. “In the Government Savings Promotion General Rules, 2018, in Schedule II, under ‘Fee to be charged for services,’ the words and

Trump tariffs drive investors to Gold! Here are 3 Gold ETFs to invest in right now

US President Donald Trump’s sweeping reciprocal tariffs have created a stir in the global markets, impacting almost all asset classes. Equities slumped, bonds surged, and gold hit new highs. Investors’ concerns grew, and their direct impact is visible on the prices of gold. Investors scramble towards safe-haven assets like gold in times of uncertainty, and

Can Trump tariff boost India’s textile industry? A look at 3 crucial factors

US President Donald Trump has announced a flat 26 per cent tariff on Indian goods with some exemptions and according to analysts, this comes as a double-edged sword for India’s textile sector. While the increased tariff is likely to impact exports with the US being a major market for Indian textiles, it also gives India’s

Infosys files fresh case against Cognizant; accuses IT firm of abusing ‘power of monopoly’

Infosys has filed fresh charges in a US district court against US-based Cognizant Technology Solutions, a report by The Times of India said. The company has accused Cognizant for leveraging its power of monopoly to restrain the competition and maintain its dominance in the healthcare software market via its platform Cognizant TriZetto Software Group. Infosys

Impact of Trump tariff likely to be limited says Motilal Oswal

The domestic brokerage house Motilal Oswal believes that the US tariff impact will remain minimal on India. India’s exports in the six most vulnerable sectors amount to only 1.1% of India’s GDP. “Overall, we believe that the impact of reciprocal tariffs (assuming full product-level reciprocity) on India will be limited on a national basis,” said