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There is a famous saying – never put all the eggs in one basket. The same saying applies when making financial planning. If you have 100 rupees then invest it in different instruments so that if there is any risk then there is less loss. Explains the math of diversification of this investment Ajit Singh’s report-
At this time good stocks are available at cheap price.
Waqar Naqvi, Managing Partner, Wright Standard Ventures LLP says that for a lay investor, it is the right time to invest only when investment instruments are available at an affordable price. Along with this, it should also be kept in mind that there should be a scheme of such a fund, through which investments can be made in many places. Be it gold, stock or date. These are areas which are at a low level right now. So now is the right time to invest in them.
Where the stock market has broken about 17 percent from the high level, while gold is also down by 5 thousand to 51 thousand from the all-time level of 56 thousand per ten grams. Now interest rates in debt are going up. Banks have increased the interest on Fixed Deposits (FDs). Companies have also taken the same route. The current trend of these three sectors is that they are expected to give more than double digit returns in the next one year.
Asset allocation is not an easy task
Investing in multiple asset classes is a challenging task. Investors are often puzzled by whether valuations for a particular asset class are cheap or expensive when making an investment decision. One of the challenges is when to enter and when to exit a particular asset class. Hence, it is not an easy task to invest in the right asset class whenever required and then rebalance it.