A Model Portfolio

Updated: Feb 17

This being the first post that is being published I would like to talk about what many experts call a Model Portfolio.

Let me explain what a model portfolio is all about. An investor who begins his/her journey at a fairly young age needs to put his/her savings to work in such a way that their wealth multiplies at least 2x in a time span of 10 years. This fact is achievable only if a person is invested in to multiple asset classes that too in a proportionate manner. Let me explain why.

I know a dozen examples where people known to me made the mistake of flocking all their bank balance to the equity market. Their sole focus became direct and in-direct (mutual fund) investments in equities. They made a common mistake of putting 'all their eggs in one basket' , a mistake which people make at start of their un-informed journey of investing. Sure, equities are the key driving force behind the multiplied growth of your wealth but they are not the sole growth driver. You will need seat belts, air-bags, and probably a helmet too to avoid dying in any 'crash'. The crashes in equity markets are like earthquakes, you will know only after it strikes.

The famous stock market crashes of 2001, 2008, 2019 have taught us one thing and one thing only i.e. diversity. A diversified portfolio looks something like this;

  1. Direct Equity Investment using a D-mat account

  2. Mutual funds- A combination of Debt-Equity-Regular Income Funds

  3. Bullion investment- via Rbi Gold bonds and physical silver investment

  4. Public Provident Fund- A must have for every investor.

  5. Direct Corporate Bond Investment with only top-notch bluechip companies

  6. Fixed deposits or a Recurring Deposit

  7. RIET Investment i.e. investment in Real Estate via the stock markets

These are some must have assets for all investors looking to attain a diverse portfolio. Some of the asset classes mentioned above are subject to further in-depth diversification. I make sure that all my clientele in invested in them proportionately.

I will not delve into greater depths right now but over a course of some other blogs I will be sharing my ideas about investments in each of these assets. I will share with you my experience and how can you plan this journey for yourself.

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