Generational Investment Preferences: A Lifecycle Cohort Perspective

 

Abstract

If we try to generalize investment choices of different Lifecycle Cohort, we can create below list which may broadly signifies popular investment choices of that generation but obviously every individual has different portfolio allocations which may have substantial deviation from common investment choices. I am writing this just to understand how an investment journey and tools evolved over the period of time; by mapping these preferences across time, we gain insight into the evolution of investment tools, philosophies, and behavioral patterns, offering a valuable lens for advisors, educators, and policy makers to understand the dynamic nature of financial decision-making.

Important Note: - When we are talking about any specific Lifecycle Cohort's wealth choices, I mean to explain their investment choices which they take across multiple stage of age and generally they start investing after 30 years of age.  

Generational Investment Preferences: A Lifecycle Cohort Perspective

Silent Generation (Born Before 1946)

Contextual Influence: Shaped by the Great Depression and post-war crisis, this cohort internalized a cautious approach to money.
Investment Behavior:

• Capital Preservation: Preference for bonds and annuities to ensure steady income.
• Dividend Reliability: Blue-chip stocks with consistent payouts were favored.
• Tangible Assets: Gold and real estate were seen as safe, enduring stores of value.
• Tools & Access: Investments were largely mediated through banks and physical certificates, with limited market transparency.

Baby Boomers (1946–1964)

Contextual Influence: Raised during post-war economic expansion, Boomers benefited from rising incomes and institutional pension systems.
Investment Behavior:

• Diversification via Funds: Mutual funds and index funds became popular for retirement planning.
• Long-Term Holding: Buy-and-hold strategies reflected trust in corporate growth.
• Income Instruments: Bonds and annuities remained staples for retirement income.
• Property as Wealth: Real estate is both a lifestyle and investment choice.
• Tools & Access: Emergence of financial advisors, retirement calculators, and SIPs marked a shift toward structured planning.

Generation X (1965–1980)

Contextual Influence: Beneficiaries of globalization and the tech boom, Gen X saw the rise of dual-income households and middle-class stability.
Investment Behavior:

• Balanced Portfolios: Stocks, Mutual fund, Index funds and ETFs formed the backbone of moderate-risk strategies.
• Retirement Vehicles: Heavy reliance on employer-sponsored pension plans.
• Selective Growth Bets: Tech and innovation sectors attracted discretionary capital.
• Real Estate & REITs: Property remained a hedge and income source.
• Tools & Access: Online trading platforms, financial media, and early robo-advisors empowered DIY investing to an extent.

Millennials (1981–1996)

Contextual Influence: Entered adulthood during the 2008 crisis and the rise of the gig economy, fostering a more entrepreneurial and tech-savvy mindset.
Investment Behavior:

• Aggressive Growth: High allocation to tech stocks and startup ecosystems.
• Digital Platforms: Use of robo-advisors, mobile apps, and algorithmic tools for portfolio management.
• Alternative Assets: Significant interest in cryptocurrencies and innovative financial tools.
• Tools & Access: Mobile-first investing and using simple investment tools as there is larger influence of DIY products.

Gen Z (1997–2012)

Contextual Influence: They have just started earning, growing up in a hyper-connected, post-pandemic world, Gen Z is shaped by digital immersion and some extent of climate consciousness. It will be too early generalizing their investment framework.
Investment Behavior:

• Speculative Assets: Crypto, NFTs, and thematic stocks reflect a high-risk appetite.
• Social Validation: Investment decisions are influenced by TikTok, YouTube and other social media platforms; this generation have created quite detailed investment education videos on these platforms.
• Tools & Access: Gamified apps, AI-powered platforms, and creator-led financial education dominate their landscape. 

Comparative Snapshot

Generation	Risk Appetite	Preferred Assets	Access Style	Philosophical Anchor
Silent Gen	Low	Bonds, Gold	Bank-led	Security & Stability
Boomers	Moderate	Mutual Funds, Real Estate	Advisor-led	Growth with Caution
Gen X	Balanced	Stocks, REITs	Advisor-led	Pragmatic Planning
Millennials	High	Tech, Crypto	Digital-first	Innovation & Autonomy
Gen Z	Very High	ESG, Crypto	Social-first	Impact & Identity

Conclusion

The journey of investment across generations is not merely a reflection of financial instruments; it is a mirror to societal evolution, technological disruption, and psychological adaptation. From the Silent Generation’s pursuit of safety to Gen Z’s embrace of speculative and purpose-driven assets, each cohort carries a distinct narrative shaped by its time. For wealth managers and educators, understanding these patterns is essential not only for portfolio design but for fostering financial literacy that resonates across age groups. As tools continue to evolve from paper certificates to AI-driven platforms, the core challenge remains; aligning investment choices with life goals, values, and the realities of an ever-changing world.

Tax-Efficient Cross-Border Investing: OECD Guidance and India’s GIFT City Advantage

 Abstract: This article explores how international investors—particularly NRIs—can navigate the complexities of cross-border taxation through OECD-guided frameworks and India’s Double Taxation Avoidance Agreements (DTAAs). It outlines key tax credit methods used globally, explains India’s approach under Rule 128, and highlights the strategic role of GIFT City in enabling tax-efficient investments. The piece also touches on OECD’s BEPS initiative and transparency goals, offering practical insights for optimizing global returns while remaining compliant.

While investing abroad or in a country other than the investor’s country of residence (not necessarily citizen of the country) creates complexity of tax treatments. These taxes add complexity beyond managing product structure, liquidity, volatility, and currency dynamics. To help better execution of investments across different countries, The Organization for Economic Co-operation and Development (OECD) has provided a platform and guidance to invest tax effectively across many countries who they signed Dual Tax Avoidance Agreement. The OECD has been instrumental in shaping the global tax landscape, especially through its work on tax treaties and investment tax guidance. Most of these tax treaties (not all) follow Article 23A and 23B of the OECD Model, which outline Exemption with progression that exempt foreign income but include it for rate calculation and to provide Ordinary credit (Credit limited to domestic tax on foreign income).

The OECD also help countries to managed BEPS (Base Erosion and Profit Shifting). Base erosion occurs when companies shift profits away from high-tax jurisdictions to low or no-tax jurisdictions and that erode the tax base while profit-shifting is a method adopted by companies when profits are artificially move, often through transfer pricing or intellectual property licensing to jurisdictions where little or no economic activity occurs. To align taxation with actual economic activity, the OECD and G20 initiated the BEPS project.

In a simple term for individual investors- If Country X signs DTAA (Dual Tax Avoidance Agreement) with country Y; then resident of Country X can invest in country Y and pay taxes on these investments in accordance with country Y and will get tax credit (or in simple term tax benefit) in home country X by any of the tax credit methods explained below.

Tax Credit Methods: Most Countries use below mentioned tax-credit methods or the variation of these for taxes on investment abroad.

Method	Description	Tentative list of Countries Using it
Exemption Method	Income earned abroad (after the tax paid abroad) is exempt from domestic tax.	Netherlands, France, Germany (for certain types of income)
Credit Method	Foreign taxes paid are recognized and credited against domestic tax liability.	USA, UK, India, Canada, Australia
Deduction Method	Foreign tax is treated as a deductible expense, then domestic tax is calculated on remaining amount	Used occasionally in  some countries with limited treaty networks
Underlying Tax Credit	Generally corporate tax paid on total profits and then dividends are again taxed; this method recognize earnings are double taxed and provide exemptions accordingly to resolve this issue.	USA, UK, Japan, Singapore, Australia, Ireland, Malaysia, Spain
Hybrid Method	Combines exemption and credit methods depending on income/ asset type or treaty.	Belgium, Switzerland, Luxembourg
Tax Sparing Credit	Credit for taxes “spared” by the host country under some scenarios are still eligible for tax credit in domestic country.	Japan, Singapore

India’s Approach

India adopts the credit method for foreign tax relief, as outlined in Rule 128. It allows taxpayers to claim credit for taxes paid in foreign jurisdictions, provided documentation is submitted. India has signed DTAA with multiple countries and we can access these list and understand tax treatment through income tax portal (Link https://incometaxindia.gov.in/Pages/international-taxation/dtaa.aspx).

 

GIFT City (Gujarat International Finance Tec-City):

India has introduced an investment module via GIFT City. It is India’s answer to global financial hubs like Singapore and Dubai, and it plays a strategic role in enabling tax-efficient international investment, especially within the framework of OECD-aligned DTAAs. GIFT City functions as a regulatory testbed, advancing India’s global financial aspirations. It helps in efficient capital flows, reduced tax leakage and alignment with OECD’s BEPS and transparency goals. Gift City provide:

1. Offshore Status Within India

• GIFT City is designated as an International Financial Services Centre (IFSC).
• Transactions conducted here are treated as offshore, even though geographically within India.
• This allows non-residents and global investors to invest in India without triggering domestic tax complications.

2. Tax Incentives for Investors and Institutions - No tax on Capital gains from derivatives and certain securities and also provide tax-free interest on specific bonds and deposits; there is also charges of STT, GST etc.

3. Global Access with Currency Flexibility

• Investors can operate in foreign currencies like USD, avoiding INR conversion losses.
• Enables direct investment in global assets like equities, ETFs, bond via GIFT City platforms.
• Facilitates cross-border fund structures like AIFs and PMS with global reach.

4. Treaty-Aligned Compliance and Transparency

• GIFT City follows OECD-aligned disclosure norms, including IFRS-based reporting.
• Structures are compatible with India’s DTAA network, allowing investors to claim foreign tax credits efficiently.
• Reduces friction in cross-border tax planning, especially for NRIs and FPIs.

 Conclusion: Navigating international investments requires more than financial acumen, it demands a clear understanding of cross-border tax frameworks and treaty benefits. For NRIs and global investors, India’s DTAA network and the strategic infrastructure of GIFT City offer a compelling pathway to optimize returns while maintaining compliance. By leveraging tax credit mechanisms and treaty-aligned platforms, investors can reduce friction, enhance transparency, and invest with confidence across borders.

Money Scripts (Klontz-Money Script Inventory)

Today I would like to explain about the interesting paper published in the year 2011 in Journal of Financial Therapy, Volume 2, Issue 1, authored by Brad Klontz, Sonya L. Britt, Jennifer Mentzer, and Ted Klontz. 

This paper has considered original list of 72 commonly heard money scripts, the factor analysis revealed four distinct money belief subscales: (a) Money status, (b) Money worship, (c) Money avoidance, and (d) Money vigilance; these are known as the Klontz-Money Script Inventory (Klontz-MSI). Klontz et al. have based these research on the extension of previously published paper of Yamauchi and Templer’s (1982) and Money Attitude Scale and Furnham’s (1984).

In the simple term, these above-mentioned Money Scripts actually explain approach of investors towards Wealth and categorize them in 4 broad categories.

(a) Money Status

This belief links a person’s self-worth to their net worth. People with this script often feel that having more money makes them more valuable or respected.

Impact: People who tie self-worth to wealth may overspend to maintain appearances. This can lead to debt, poor savings habits, and risky investments. They might also avoid financial help out of pride, worsening their financial health.

(b) Money Worship

Money worshipers believe that more wealth will solve all their problems and bring happiness. They often think that having more money will lead to better relationships, less stress, and more freedom.

Impact: Believing money solves everything can drive compulsive earning and spending. These individuals may chase wealth at the cost of relationships or health, and still feel unsatisfied. They’re prone to financial stress and poor long-term planning.

(c) Money Avoidance

This script reflects a negative view of money. People with this belief may think money is bad or that rich people are greedy. They might feel guilty about having money or avoid dealing with financial matters altogether.

Impact: Viewing money as bad or shameful often leads to neglecting financial responsibilities. These individuals may under-earn, avoid budgeting, or fail to invest. Their finances can suffer due to lack of engagement or avoidance of financial literacy.

(d) Money Vigilance

Money vigilance is about being cautious and alert with finances. People with this belief value saving, budgeting, and financial security. They may be secretive about money and feel uncomfortable spending it, even when it’s necessary. While this script can lead to financial stability, it may also cause some uncomforted feeling to enjoy the wealth.

Impact: While this belief promotes saving and caution, it can also lead to excessive frugality or anxiety around spending. People may miss out on opportunities or struggle to enjoy their money. However, they’re usually better at budgeting and long-term planning.

Conclusion: Each of these beliefs is shaped by early experiences and can influence financial behavior in powerful ways. These frameworks, like the money script theory, challenge the idea that we as an investor are always rational. 

Understanding our own money script can help us make better financial decisions and improve our overall financial well-being. In short, these beliefs act like invisible scripts that guide financial behavior. Recognizing our dominant script can help us break unhealthy patterns and build a more balanced relationship with money.

These factors strengthen my earlier article explaining importance of choosing right wealth advisor is a critical factor to consider for balancing our dominant money script and helping us to grow better with less biased approach.

Understanding Retirement Planning: Key Phases, Risks, Withdrawals, and Investments

Planning for retirement is an important step to ensure you have enough money to live comfortably when you stop working. Retirement planning involves two main stages: saving money while you work (accumulation phase) and using those savings after you retire (decumulation phase). It also involves understanding important ideas like the funding ratio, matching your investments to your future needs, dealing with risks, choosing how to withdraw your money, and picking the right investments.

Saving for Retirement: The Accumulation Phase

The accumulation phase is the time when you are working and putting money aside for your retirement. You save money through plans like NPS, pensions, or  with multiple investment tools. During this time, your money is often invested in things like stocks that can grow over time. The goal is to build a good amount of savings to support you when you retire.

Using Your Savings: The Decumulation Phase

This phase starts when you retire and begin to use the money you saved to pay for your living expenses. Since retirement can last many years, it’s important to plan how much money you take out each year so that you don’t run out too soon. At this stage, your investments often shift towards safer options that provide steady income and protect your savings.

What Is Funding Ratio?

The funding ratio tells you how well your savings cover your future retirement needs. It is the value of your savings compared to the amount of money you expect to spend in retirement. A ratio of 1 means you have just enough saved, while less than 1 means you might need to save more or adjust your plans.

Matching Investments to Future Needs

It’s important that your investments behave in a way that matches your future expenses. For example, if your costs go up with inflation, you want investments that also grow with inflation (Asset having high Correlation with Inflation). This reduces surprises and helps make sure your money lasts.

Risks You May Face in Retirement

There are several risks to consider when planning for retirement money:

• Living Too Long (Longevity Risk): You might live longer than expected and run out of money.

• Running Out of Money (Probability of Ruin): There’s a chance your savings could be used up if withdrawals are too large or investments don’t perform well.

• Inflation Risk: Rising prices can reduce the purchasing power of your money.

• Market Risk: Investments like stocks can go down in value, especially early in retirement.

• Sequence of Returns Risk: The order in which your investments earn or lose money matters; bad early years can hurt your savings more.

• Health Costs: Medical emergencies or long-term care expenses can be very costly.

Ways to Withdraw Money in Retirement

How you take money out affects how long your savings last. Some common methods are:

• Fixed Amount: Withdraw a set dollar amount each year. Simple but risky if the market falls.

• Fixed Percentage: Withdraw a set percent of your total savings each year. Amount varies with portfolio value.

• The 4% Rule (Popular rule globally, might not fit well in Indian Scenario): Withdraw 4% of your savings in the first year, then adjust that amount each year for inflation. This is a guide to help money last about 30 years.

• Required Minimum Distributions (RMDs): Certain retirement accounts require you to withdraw at least a minimum amount each year by law.

• Minimum and Maximum Amount Cap: Fixing a a general withdrawal rate but putting and Minimum & Maximum Cap rate to counter volatility in the portfolio.

• Bucket Strategy: Divide your savings into different “buckets” for short, medium, and long-term needs. This helps manage risk and income better.

Investment Options for Retirement

Choosing the right investments helps balance growth, income, and safety. Some options to consider:

• Stocks: Good for growth and beating inflation.

• Bonds: Provide steady income and are less risky. Inflation-protected bonds guard against rising prices.

• Annuities: Insurance products that guarantee income for life, helping protect against living too long.

• Target-Date Funds: Automatically adjust to become safer as you get closer to and into retirement.

• Real Estate: Can provide rental income and diversify your investments.

• Cash: Keeps money safe and available but doesn’t grow much.

Combining these options with your withdrawal plan and risk comfort can help you have enough money throughout retirement. Regularly reviewing and adjusting your plan is also important.

In Summary

Retirement planning means saving carefully during your working years and spending wisely when you retire. Understanding the funding ratio and how your investments relate to future costs helps keep your finances on track. Being aware of risks like living longer than expected or market changes lets you prepare better. How you withdraw money and the investments you pick will greatly affect your financial security. A well-thought-out plan can help you enjoy your retirement without money worries.

Choosing the Right Wealth Manager: A Strategic Approach

 

Choosing the Right Wealth Manager: A Strategic Approach

Wealth management may seem straightforward during stable or bullish market conditions, but true expertise is revealed when markets turn volatile. In such times, the ability of a wealth manager to protect and grow your portfolio becomes critical. Selecting the right professional requires thoughtful evaluation—not just of returns, but of skill, service, and judgment.

Decision Outcomes in Wealth Manager Selection

When deciding whether to hire or reject a wealth manager, we encounter four possible outcomes. These can be categorized as follows:

Decision Actual Skill Level Outcome Type of Error Select the manager Has the right skills ✅ Correct decision None Reject the manager Lacks the right skills ✅ Correct decision None Select the manager Lacks the right skills ❌ Incorrect decision Type 1 Error Reject the manager Has the right skills ❌ Incorrect decision Type 2 Error

Why Errors Matter

• Type 1 Error (False Positive): Choosing someone who lacks the necessary skills can lead to poor portfolio performance, especially in turbulent markets.
• Type 2 Error (False Negative): Rejecting a skilled manager means missing out on potential gains and quality service.

Minimizing both errors is essential. This requires a structured evaluation process that goes beyond surface-level performance.

Skill vs. Market Conditions

In bullish markets, most portfolios show positive returns, making it hard to distinguish between luck and skill. However, during volatile or bearish phases, a skilled manager stands out by:

• Preserving capital
• Rebalancing effectively
• Communicating clearly during uncertainty
• Making informed decisions based on macro and micro trends

What to Evaluate Beyond Returns

While performance is important, a holistic assessment should include:

• Service Standards: Is the manager proactive and client-centric?
• Responsiveness: Are queries and concerns addressed promptly?
• Knowledge Depth: Does the manager understand complex financial instruments and macroeconomic trends?
• Communication: Are portfolio decisions explained clearly and regularly?
• Transparency: Are fees, risks, and strategies disclosed openly?

Final Thoughts

Choosing a wealth manager is not just about returns—it's about trust, skill, and long-term alignment. By applying a structured decision-making framework and evaluating both technical and interpersonal qualities, investors can reduce the risk of costly errors and build a more resilient financial future.

 

Shall we worry for market corrections?

Today the market has seen  2.7% fall and last one month market return is -1.5%.

Though this correction is not significant, most of our colleagues are worried. It's not this small market changes they are worried about rather they are considering the possibility of deep market correction which is due since long time. Last 4 years, the Indian Equity market has been uni-directional and delivered a good return, but every market rally has to correct at some point. Equity markets always grow between up and downs. 

None of us can predict the market with certainty but what we can do is to keep our portfolio aligned by taking notes from the current economic outlook. 

Its time to tilt our portfolio towards the large cap and hybrid funds. These portfolio actions will keep our portfolio better equipped to manage any unfavorable conditions. 

Investment is boring

Investment success does not demand chasing market thrills, but it is built on timeless principles like disciplined asset allocation and unwavering fundamentals. While market swings grab headlines, they matter little for the core of your portfolio, influencing only a tiny tactical slice. My interactions with our clients are always center on crafting a portfolio tailored to their goals and comfort with risk, ensuring steady wealth growth over time.

Why Long-Term Strategies Trump Market Noise

Markets are unpredictable, shaped by fleeting events from geopolitical tensions to policy shifts. Yet history shows that fixating on short-term scenarios erodes returns through emotional trades and high costs. Instead, success lies in a robust asset allocation framework, it means spreading investments across categories to weather volatility. This approach, backed by decades of data, prioritizes consistency over speculation.

 Think of it as constructing a resilient home: strong foundations (basics like diversification) endure storms, while flashy add-ons (tactical bets) are optional. By keeping 70-80% of your portfolio in strategic, long-term holdings, you harness compounding's power. Tactical moves, limited to 20-30%, can exploit opportunities but never dominate.

Core Pillar: Diversification Across Assets

Diversification remains the bedrock of risk management. A well-rounded portfolio blends equities for growth, debt for structural support, and alternatives for hedging or reducing correlations; adding all these assets helps in reducing drawdowns without sacrificing upside.

Equities drive expansion through corporate profits and economic cycles, historically delivering 10-12% annualized returns in India over 20+ years. Debt instruments, meanwhile, preserve capital with predictable yields, often 6-8% from bonds or deposits. This mix smooths the ride: during bull runs, stocks shine; in corrections, fixed income stabilizes.

Optimizing Equity Exposure

Dedicate 40-70% to equities, scaled to your age and horizon; a younger investors lean aggressive while investors nearing retirement will take conservative stance. Within equities, blend large-cap funds for stability (Top 100 Companies in terms of Market-Cap), mid-caps for growth (101st to 250th Company), and allocation to small-caps for alpha potential. 

Stabilizing with Hybrids and Fixed Income

Counter equity risks with 20-40% in hybrids and fixed-income options. Balanced Advantage Funds (BAFs of MF schemes) dynamically shift between stocks, Aggressive hybrid funds, which allocate 65-80% to equities and 20-35% to debt, offer balanced growth potential with reduced volatility compared to pure equity funds and debt, targeting 8-11% returns with moderated volatility. Fixed deposits or government bonds offer guaranteed 6-7% yields, ideal for near-term needs.

These act as shock absorbers: in 2020's crash, debt-heavy portfolios lost just 5-10% versus equities' 30% plunge. For retirees, corporate bond funds or debt mutuals provide liquidity without lock-ins, blending safety and modest growth.

Strategic Roles for Gold

Limit gold to 5-10% of portfolio—they diversify beyond financial assets. Gold shines during uncertainty, returning 9-10% long-term and curbing inflation erosion (though exceptional return in recent times).

Venturing into Alternatives

For high-net-worth clients, allocate 5-15% to alternatives like Alternative Investment Funds (AIFs) or Portfolio Management Services (PMS). Category III AIFs tap hedge strategies or private credit, aiming for 12-15% returns with low correlation to markets. PMS suits customized equity picks, often beating benchmarks by 2-4%.

Mastering Risk and Rebalancing

Risk tolerance is personal: conservative profiles favor 60% debt/equities; aggressive ones prefer to have 70% stocks. Annual portfolio reviews align portfolio with life changes and requirements. 

Rebalance yearly: sell winners, buy undervalued stocks (or funds or bond) to restore targets. This enforces "buy low, sell high," adding 1-2% annual value. In downturns, it equips you to stay invested, avoiding panic sales that lock in losses.

The Rewarding Patience of Boring Investing

Wealth creation feels mundane; no viral trades or guru tips. Yet this "boring" discipline has minted millionaires: a Rs. 1 lakh per month investment at 12% compounds to Rs. 9 crore in 20 years. 

In India's evolving landscape, rising per capita income, formalization of economy and we sticking to basics unlocks prosperity. 

Hybrid Category Mutual Funds

 What are the different kinds of Hybrid funds in MF? How they are different? What is applicable tax towards these?

Hybrid funds are the schemes which has equity, fixed-income and sometime other asset class in the portfolio. Mix of these asset class can be different, so accordingly they are categorized in different schemes and applicable for different taxation.

Let me explain benefits of Hybrid funds.

1- Biggest benefits of investing in Hybrid fund is regular rebalancing of portfolio. When equity market goes up, equity portion of portfolio grows and it become higher percentage of portfolio. Then fund manager sells equity shares and buy fixed-income papers. Means profit booking.

Similarly if equity market corrects (goes down), then fund manager has to sell fixed income papers and buy equity to make it again at least 65 % of portfolio (as per regulatory requirements). Means cost averaging.

2- It has lower volatility than pure equity portfolios.

3- these funds required almost no market timing for entry and exit.

We can broadly classify Hybrid funds in 4 categories.

Aggressive Hybrid funds- As name suggest, these are aggressive funds which has more than 65% Equity in portfolio (Equity taxation- as it has more than 65% portfolio in dimestic equity) and remaining in Fixed Income portfolio (and mostly in high quality-medium duration portfolio). We also known these schemes as plain vanilla balance funds. As they have least 2/3rds of portfolio in equity, they are the most volatile among Hybrid funds.

Because of above higher equity portion, most of these aggressive funds deliver similar returns to any large cap category funds with lesser volatility.

Dynamic Asset Allocation- This is the category of scheme which keep changing their net-equity position of portfolio as per market valuation. Idea is to increase equity percentage in portfolio when market looks under valued and similarly decrease equity weight when market look expensive.

Most of the funds in this category uses either PE ratio of PB ration to determine valuation of equity market and their net-equity portfolio keep changing from as low as 10% to as High as 90 %.

Remaining portion of the portfolio has arbitrage and fixed-income papers (in efficient combination to qualify Equity taxation).

Conservative Hybrid funds- These funds have very high amount of fixed-income papers and a small percentage (most case 20 to 25%) is equity. These funds are liable for debt taxation.

Equity Saving fund – These funds broadly follow principle of one third to each asset class (Equity, arbitrage and fixed-income). This composition might change slightly depending upon market outlook of fund manager. This fund also qualify for equity taxation. 

Allocate your funds in these categories as per your requirements. 

 

Do You Really Need a Financial Advisor? Here’s the Truth

Self-medication and web-based diagnosis is something we all avoid.

Similarly when it comes to investment, we must take help of experts. This will optimize our investment results and will reduce volatility. Investment has multiple options, it has multiple possible combinations and the most important it is never been as simple as it looks.

You need advisor for below reasons.

• He (or She) will understand your risk profile.

• He will be able to segregate your goals in different timelines.

• He will create be-spoke asset combination suitable to you.

• He will be the one evaluating your assets from tax-angle too.

• He will execute all your transactions.

• He will monitor your transactions on your behalf.

• He will re-balance your portfolios in frequent intervals.

• He will provide consolidated report of your complete assets at regular intervals.

• He will be the one who will help you for any changes or updatie required in your investment (Eg Nominee & Contact update, bank change, address change etc).

• He is the one who will understand complexity of economic situation and will provide ideal solutions in those troubled period.

• Last but important- in case of your death, he will help your family to transfer these assets and will advise on the tax angle of the same.

In short, we all need a personal advisor to our portfolio.

Global Investment- Requirements and benefits

Diversification is something which we talk about everyday. Yet we miss taking advantage of it in many aspect.

Geographical diversification means having some part of our asset must be allocated into various geographical market. This reduces our risk of depending completely with home economy and also provide cushion of global investment & currency diversification.

Every economy has some unique characteristics and so it has its own inherent market cycle. So when we allocate to any other country (popularly US, Europe, South Korea and Japan etc.), we actually reduces standard deviation of portfolio. This help us to reduce volatility.

That's why expert suggest a small portion of your portfolio should allocated in global market.