Portfolio Diversification & Asset Allocation Tips

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The value of your investments can change at any time, depending on what is going on in the world. There are simple ways of making sure your money is safe:

Invest in multiple assets
Keep your income, expenses & financial goals in mind
Invest based on your risk appetite, liquidity requirement & time horizon

By diversifying, you are smart with your money and safeguard it during uncertain situations.

We have all heard the saying “don’t put all your eggs in one basket.” While this applies to many facets of life, the most important area we can apply this to is our money. By investing our money into multiple assets, we make sure that we safeguard it by diversifying it. Read on to find out how to diversify your assets to fit your lifestyle.

Here are some ways you can diversify your portfolio by investing into:

Fixed Deposits

Recurring Deposits

Securities

Precious metals

Real Estate

Stocks

Mutual Funds

While diversifying we must keep in mind:

Time Horizon
When do you want your investments to mature?
Liquidity
How easily do you want to access your money
Risk Appetite
How much are you willing to lose to make profits?
Income
Which assets can you comfortably invest into?
Financial Goals
How do you want your money to work for you?
Expenses
You must budget to make sure you save properly.

If you follow these steps and allocate your assets, you will see benefits including:

1. Stay ahead of inflation

Grow your money faster than rising prices to maintain purchasing power.

2. Reach life goals with confidence

From buying a home to retiring early, investing turns aspirations into reality.

3. Protect your wealth

Strategic investments to shield your money from market and economic shocks.

4. Stay calm during market dips

A well-diversified portfolio helps you ride out volatility without panic.

Conclusion

If you make your money work for you by investing in the right assets, you will be stress-free for many years to come. Deciding what mix works for you and sticking to it will change your life. Be disciplined and know what your goals are to start saving effectively.

Disclaimer: This article is intended solely for informational purposes. The views expressed in this article are personal. Axis Bank and/or the author shall not be liable for any direct or indirect loss or liability incurred by the reader arising from reliance on the content herein. Readers are advised to consult a qualified financial advisor before making any financial decisions. Axis Bank does not endorse or guarantee the accuracy of any third-party content or links included in this article.

Mutual Fund investments are subject to market risk. Please read all scheme-related documents carefully. Axis Bank Ltd. is acting as an AMFI registered MF Distributor (ARN code: ARN-0019). Any purchase of Mutual Funds by Axis Bank’s customer(s) is purely voluntary and not linked to availment of any other facility from the Bank. This content is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future returns. Readers are advised to consult a qualified financial advisor before making any investment decisions. Terms and Conditions apply.