Asset Allocation at different stages of Life

What assets can you build?

• Equity

• Real Estate

• Gold

• Fixed Return Instruments ( FD,PPF etc)

What is asset allocation?

• Distribution of the investment among the various asset classes is termed as asset allocation

• Asset allocation depends on risk profile of an investor

What is risk profile?

• The amount of risk that an investor can bear on his investment is called his/her own risk profile.

• Eg. On a 100 rs investment, if an investor can afford to lose only 20 rs , his risk profile is low whereas if he can afford to lose 50 rs, his risk profile is high.

Invest for Life

• Various stages of investment Bachelor Newly Married Parents with kids Approaching Retirement Post Retirement

Bachelor

• Age Limit – 21 to 27 yrs• Risk Profile – High• Assets – Equity, Real estate• Duration of Investment – Long term• Asset allocation can be higher for

equities.• Liquidity can be kept at lower levels.

Newly Married

• Age Limit – 28 to 32 yrs

• Risk profile needs to be reduced since there is a dependant added after marriage.

• Assets – Equity , Fixed Instruments, Real estate

• Asset allocation should gradually move towards fixed return instruments.

• Equity – 50% Fixed Instruments – 50 %

• Liquidity level needs to be increased.

Parents with Kids

• Age Limit – 35 to 50 yrs

• Risk Profile – Moderate to Low

• Assets – Balanced mutual funds, fixed return instruments

• Investment term – Medium

• Liquidity levels needs to kept at higher position for immediate needs

• Equity – 25 % Fixed return instruments – 75%

Nearing Retirement

• Age – 50 to 57 years

• Risk Profile – Low to Zero

• Assets – Fixed Return instruments

• Investment horizon – Short

• 90% of investment should be highly liquid

• Equity – 0-10% , Fixed instruments – 90 – 100%

Post Retirement

• Age – 60+ yrs

• Risk Profile – Low

• Investments – Annuities

Thanks