The Importance Of Asset Allocation 

Invest Wisely

Stock markets can be choppy, and volatility increases when times are uncertain (like now).

This can cause investors stress - but if you’ve allocated assets wisely, you can sail through. 

The Long & Short Of It

Stocks will bring returns in the long-term, but short-term swings are hard.

However, if you’ve spread your investments over different asset classes, you won’t have to worry too much.

Fixed Deposit / Recurring Deposit

You should have an easy-to-access emergency fund, invested in a liquid instrument like a fixed or recurring deposit or a liquid fund. 

Fixed Income / Debt Funds

A good thumb rule is to invest an amount that will see you through 2-3 years of no earning.

These are mainly for objectives that you intend to meet in the next 3-4 years.


Therefore, equity investments should be higher when you are younger and during high-earning years, tapering as you grow older.

Equities are primarily designed to grow your wealth for the long term.


As always, gold mutual funds and ETFs are a better way to invest, instead of purchasing physical gold.

Gold should ideally be kept to less than 10% of your overall corpus.

Why Pay Attention To Asset Allocation?

Occasional underperformance  / hiccups in one asset class (like equity) shouldn’t adversely affect your life and ability to meet your financial and savings goals. 

Balance Is Key

Instead of looking at it from a numbers perspective (like 60-40 or 30-70 over equity and FDs), consider balancing asset classes based on your savings, age and end goals. 

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.