Thinking where to invest? This is how you can diversify your portfolio
Investing money is not an easy task especially when you are a beginner. Business tycoon Warren Buffett had once said, "Wide diversification is only required when investors do not understand what they are doing."
Unlike earlier times, now a days the investors are flooded with various financial instruments where they can easily park their money. But, the question is "Where to invest?"
This totally depends on your financial goals and how much "risk" you are ready to take.
Here, we try to give you a glimpse of how you can allocate assets and where should you invest:
For instance, your age is in the range of 21-30 years and you are at early stage of your career. Considering that, you can presently, take "Medium" risk.
As investments should be for long-term and as you are a beginner, it would be advisable to take investment horizon for above 10 years.
This what how you should allocate your assets:
Based on your above specifications, you should invest 25% into debt and 75% in equity.
Divinding it into further, in debt instuments: 12% into be your Long Term fixed income, 8% into debt funds and just 5% should be your liquid cash or bank fixed deposits.
Under equity investment, 22% should go into small and mid cap companies and rest 53% should be invested into Large cap companies.
So, think wisely before investing your money and diversify your portfolio to generate returns from each instruments and balancing the risk factor.
Disclaimer: This story is for informational purposes only and should not be taken as an investment advice.