ALL >> Business >> View Article
Smart Strategies Offered By Mutual Funds
Total Articles: 6
It's not without reason that variety is said to be the spice of life. Take food for example. To maintain a healthy diet, you need to consume a variety of food that provides you carbohydrates, proteins, fats, minerals, etc.
Well, the same applies to investing too! Your investment portfolio should have a mix of assets (equity, debt, property, etc.) simply because each of them has its own particular characteristics and hence, a specific role in your portfolio.
Now, let’s go back to food. Some people may need a bit more protein while others may need an extra tinge of vitamins for their particular body requirements. Similarly, you need to have the right proportion of different assets in your portfolio to suit your financial goals and risk appetite. In financial jargon, this is called asset allocation. For example, a retired person may need a regular and steady income flow, and would therefore need to be invested predominantly in debt with a minor exposure to equity. But a person in their twenties may have a predominantly equity portfolio, in line with their risk profile and investment horizon.
Asset allocation cannot be a one-time exercise. To understand this better, consider the following example. On 1st January, you work out your asset allocation as 60% in equity and 40% in debt. Now, with time, your needs and risk profile will change. Also, your equity and debt investments will not offer the same returns. This means you will need to review your asset allocation periodically (it’s preferable to do this once in six months).
So, how do you rework your investment portfolio to rebalance your asset allocation? Simple, you can either move some money from one asset to another or make fresh investments in the asset that you want to increase in your investment portfolio.
Though this exercise may sound difficult, mutual funds offer some systematic solutions that could make your life easier.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This article should not be considered as 'investment advice'. We request the Reader to make informed investment decisions and consult their financial advisors to determine the financial implications with respect to investing in Mutual Funds.
Business Articles1. Which Steps Are To Be Followed To Ensure Efficient Wastewater Recycling System
Author: Steve Cherng
2. Valhalla Mining Offers: What We Offer And Who We Are
3. Should I Invest In Bitcoin In 2017? Here’s What You Need To Know
4. Our Cryptocurrency Exchange And Bitcoin Mining Services Are The Best
5. How Does Cryptocurrency Ming And Bitcoin Mining Work?
6. Valhalla Mining - Service Overview, Technology, For Sellers, For Buyers The Benefits Of Cryptocurren
7. Can You Make Profit With Bitcoin And Cryptocurrency Mining? Is Bitcoin Mining And Cryptocurrency Min
8. A Beginners Guide To Cryptocurrency Mining: What Should You Know?
9. Popular Established Sites That Appreciate Bitcoins And Cryptocurrency Mining.
10. Disadvantages Of Cryptocurrency Mining
11. 4 Reasons Why Merchandising Plays An Important Role In Retail Sales
Author: Lily Alvin
12. Have You Ever Read About Digital Currency Mining?
13. Buying And Investing In Cryptocurrency
14. Elucidation Of Bitcoin Cloud Mining
15. Get Better Returns Than Stock Market And Real Estate Through Bitcoin Mining