Where to Invest ????

When it comes to investing one has to choose an asset class that suits the individual’s risk
and return temperament. An asset class is a category of investment with particular risk and
return characteristics. The following are some of the popular assets class.

Thank you for reading this post, don't forget to subscribe!

1.Fixed income instruments
2.Equity
3.Real estate
4.Commodities (precious metals)

Investments optimally should have a strong mix of all asset classes. It is smart to diversify
your investment among the various asset classes. The technique of allocating money across
assets classes is termed as ‘Asset Allocation.
These 5 thumb rules help you to make a better balance investor.

1. Save: 30% of Net Income
 Ideally, your monthly savings should be at least 30% of your net salary/income. Take
home salary is computed as net salary after statutory deductions like Provident Fund and
TDS etc. For example, if your take home salary after tax/PF is Rs 60,000/- then you must
save at least Rs.18,000/- every month for investing in your medium to long-term goals.

2. How much should be the Equity investment: (100 Minus Your Age)
 For investing in Equity is (100 minus your age)%. For example, if your age is 30 years,
then you may invest up to 100 – 30 = 70% of your savings into Equity .Similarly, if your
current age is 60 years, you should not invest more than 40% (100 – 60) of your savings in
Equity or Equity Oriented Schemes. As your age continues to grow, you should reduce your
exposure to Equity. 

3.How much should be invested in gold: 10% of your Financial Portfolio
 Ideal allocation to gold is around 10% of your financial portfolio. The financial portfolio
includes Bank Balance, Fixed Deposits, Post Office Schemes, Mutual Funds, Bonds, Shares,
and Stocks etc. Accordingly, if your financial portfolio (without adding the value of your
house) is Rs.1 crore, then your maximum exposure to gold including Gold Mutual Fund or
Gold ETF should be Rs.10 lakhs. 

4. Debt and Fixed deposit Instruments.
 As already mentioned, 100 minus your age should be invested in Equity and the balance
should be invested in Debt Schemes like PPF, Debt Mutual Funds, FMP, Bonds, Bank
Deposits etc. For example, if your current age is 50 years then you should invest 50% in
Equity, (100 – 50), 10% in Gold and balance 40% in various Debt instruments.

5. Insurance Coverage
 Life Insurance coverage amount is at least 7 times of your annual income. If your annual
salary package is Rs.15 lakhs, you must have “Sum Assured” of at least Rs.1 crore in one of
more Life Insurance Plans including Term Plan, ULIPs, and Traditional Plans.