Equity vs. Debt Allocation
The Age Rule: A common thumb rule is to keep a percentage of debt in your portfolio equal to your age. Younger investors can take more risks because they have fewer liabilities [00:47].
Life Stages: As you reach ages 40-45, liabilities like children’s education and approaching retirement increase, necessitating a higher shift toward debt for stability [01:05].
Market Volatility: Regardless of age, keeping some debt helps manage market fluctuations [01:30].
Selecting Mutual Funds
Avoid Chasing Past Performance: Investors often mistakenly pick “top-performing funds.” However, rankings change every financial year, and a top fund today might drop in rank tomorrow [02:05].
Goal-Based Selection: categorize your investments by time horizon:
Portfolio Diversification (The "Thali" Analogy)
Stable Funds (The Main Meal): Large-cap and index funds are like “dal and chapati”—essential daily staples for stability [04:40].
High-Risk Funds (The Dessert): Sectoral or thematic funds (like IT or Pharma) are like “sweets”—they should only make up a small portion (about 5%) of your portfolio [05:32].
Investment Strategy (SIPs)
Monthly Savings: Aim to invest 25% to 30% of your income [03:28].
Inflation Planning: When planning for the future (like retirement), look at current household expenses and adjust for inflation based on historical trends (e.g., gold prices or household costs from 10 years ago) [07:04].
Avoiding Concentration: Don’t put all your money into one bucket, such as just small-cap funds, just because they showed high returns recently [08:06].
Liquidity and Redemptions
For more details, you can watch the video here
