We believe that financial plan based asset allocation is the central to investment portfolio that balances risk-returns, and maximize the certainty of achieving financial needs, goals and aspirations; be it providing for children’s higher education, or attain financial freedom to pursue personal interests.
Why Financial Planning Matters?
A personalised financial plan helps translate life goals into clear, measurable and time-bound financial goals. The process helps in creating roadmap that aligns your investment decisions with financial goals, ensuring that your money works towards what truly matters to you.
Along with the cost, time horizon of the goals plays an important role in planning for investments required to fund that goal. For example, a goal that is 12 months away needs to be planned differently than retirement which could be 10+ years away.
Key benefits:
Clarity: helps clearly understand your current situation and future needs.
Structure: helps creating portfolio asset allocation that clearly aligns investments with objectives, balancing risk and returns.
Control: helps making informed decisions, avoid impulsive reactions or emotional swings driven by fear or greed.
Discipline: makes it easier to remain disciplined and stick to long-term investment strategy despite short-term market fluctuations and noise.
Comfort: sleep with peace of mind.
Why is Asset Allocation central to any investment portfolio?
Various studies show that Asset allocation is the biggest driver of overall long term investment returns. Know More
Investors often worry about which stocks or funds to buy. However, it is asset allocation that explain most of the variation in investment returns (up to 90%) – both across time, as well as across portfolios.
What is Strategic Asset Allocation (SAA)?
SAA involves creating a diversified portfolio of various asset classes (Indian equities, global equities, debt, income, gold etc.) based on investor’s specific needs such as time horizon of goals, risk tolerance, and need for returns – as informed by financial plan. Diversification protects downside risk, whereas asset selection drives returns. Core objective is to optimally balance risk-returns and maximize certainly of achieving financials goals
Simply speaking, Strategic Asset Allocation turns a Financial Plan into action.
Multi Asset vs Equities Only Portfolio
Why is a portfolio diversified across multiple asset classes better than an Equities only portfolio?
Different asset classes perform differently under varying macroeconomic conditions and market cycles. Asset class diversification ensures that poor performance in one asset class can be offset by better performance in another uncorrelated asset, thus reducing overall portfolio risk (volatility) without compromising overall returns.
Invest with Marcellus
Get in Touch