This Holi, curate a colourful portfolio to achieve your financial goals on time

Investors can use the festive season of Holi to remind themselves of the importance of being diverse (or colourful) in their portfolio allocation. While you make plans to achieve your financial goals, it is important to curate a well-rounded portfolio with multiple elements in it.

A strong and robust portfolio entails different assets – ranging from equity to debt, and real estate to precious metals such as gold and silver.

1. Equity: The allocation to equity could be in proportion to your age. For a young investor, equity allocation could be as high as 70%. As you age, you should cut down your exposure to equity.

2. Debt: To hedge your investment against unanticipated risks, it is vital to invest a small portion in debt instruments such as corporate bonds and sovereign bonds. You could also get exposure to debt via mutual funds e.g., money market funds and overnight funds. Typically, investors are supposed to invest anywere between 20-30 percent of their portfolio in debt.

3. Gold and precious metals: Besides debt, one could also consider investing in the safe haven assets such as gold and silver. Whenever markets get spooky, precious metals see an increase in their prices.

4. Real Estate: If you have some capital to spare, you could also invest in real estate. Alternatively, you could also invest in the real estate investment trusts (REITs).

5. Fixed deposits: This is typically part of the debt portion of your overall portfolio, some investors like to invest in these conventionally popular investment instruments.

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