Investment Ideas

June 14, 2021

The relentless rise in equity markets-globally and locally would have surprised many. This is even as we are still finding solutions from the raging pandemic. As financial planners our job has been to protect and grow our client’s wealth.

While external events are never in one’s control, the following steps would be a good way to build one’s financial portfolio:

1. Equity allocations (through direct equity and equity mutual funds) could be maximum between 35 to 50% of financial wealth. Conservative clients like Retirees could have the allocation not more than 25% in equity. This will help one to participate in the upside (if any) and also reduce the downside. Exit all non-core direct equity and equity mutual fund portfolio now. While investing fresh money in equity assets, do note the above allocations in mind.

2. Allocate wealth to Gold of at least 5% of your financial wealth (some can increase this to 10% too if further corrections happen in Gold prices). Resident Indians can do through Sovereign Gold Bonds (SGBs) and NRI’s through Gold Mutual Funds. Gold will not make you wealthy but protect the downside during severe financial market volatility, whenever the same happens.

3. REITs (Real Estate Investment Trusts) are good assets to diversify one’s portfolio into rent earning commercial Real estate. Invest between domestic REITs through stock exchange route (who have a demat account) and International REIT through Mutual Fund route. Invest 5% of your financial wealth here with 1% allocation to each REIT. Invest over the next few months weekly. REITs will not create tremendous wealth but would be far less volatile than equity assets.

4. Importance of Fixed Income cannot be overstated especially during the current times. This will give stability to the entire wealth and also some liquidity to participate quickly in case of large volatility in equity markets (whenever the same happens). Resident Investors can take exposure through debt and arbitrage mutual funds whereas NRI investors could invest in NRE and FCNR deposits (1-2 years’ time frame only). 15% of this portion could be liquid options for emergency or to exploit opportunities. FCNR deposits for NRI’s make sense so as to have diversified currency exposure. Minimum 50% (can go upto 65%) of one’s financial wealth should be in fixed income options. Do note that fixed income portion will never grow your wealth but only give stability and peace of mind. Do not chase high returns for this portion of the portfolio.

5. Strictly avoid (and if not possible limit exposure) to Cryptocurrencies, day trading, commodities/forex trading and derivatives. These are good hobbies for entertainment for a large part of the population.

The intention of a well-designed financial portfolio is to help one to reach their financial goals and not always to get the highest returns. As long as we manage the risks better- returns will take care of themselves. So, a focus on asset allocation (not put all the money in one basket- spread in equity, fixed income, gold and real estate), diversification (not to have a style bias within an asset class) and lower costs would surely help.

So, go and revisit your overall allocation strategy. Now is the time to do it!! If confused, then take the services of a fee only financial planner who can give an unbiased opinion of your financial condition.

Wishing you all a safe and exciting investment experience.


Equity allocation of my personal (including my family) financial portfolio has been scaled down below 50% recently.


1. Allocation to listed REIT can be done by investors whose financial portfolio is greater than Rs 1 crore.
2. Market linked investments like Mutual Funds and Equity share investments are subject to market risks. Kindly read the scheme information documents carefully before investing.
3. Past performance of any asset class is not an indicator of future performance.
4. It is very important to consult a Professional Planner/Investment Adviser while implementing any of the above ideas.
5. The above are mere suggestions and not Investment Advice as individual cases might differ.





By Naveen Julian Rego
Naveen Julian Rego is a certified financial planner.
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Comment on this article

  • Ambrose Pereira, Bajpe

    Thu, Jun 17 2021

    Forgot to add to my earlier comment a few other things...... Best time to start investing is when you are 30 something. At that age you have just started working and do not have a lot of money so you invest a little amount (say about 5% to 10% every month) and watch it grow. …. Markets go up and go down but if you invest that little amount and watch it grow (markets go up and go down) you get the much needed experience (what you do right and what you do wrong) on investing. Salary/Incomes rise as you reach 40 to 45 and until you retire so you can gradually add to your investments and start accumulating wealth for a worry free retirement. Never go for "get rich quick" investment schemes. Look for ethical managements and established profit making sound businesses that will last your life time (like TCS and Infosys). And keep reading and reading and reading; key is to read every bit of material on investing. As you read and read you get an idea about ethical and not so ethical writers and advisors out in the market and the commissions you pay on your investment accounts. There are a lot of fake, fly-by-night writers and online advisors so after reading try and evaluate the information. If you start at 30 by the age of 40 you have a fair idea in investing (like sectors, business cycles etc) and shall develop a gut feeling about where and when to invest...... We started at 30 and lost a fair amount of money early on but we have more than recovered over time now and are comfortably retired..... And remember to fill your tax savings investments first ( and create a safe life insurance (low premium/high pay-out) from the best life insurance company if you are a single earner. Tax on sale of equity (long-term capital gains) are comparatively very less in India ( so cash out on it.........

  • Ben D'Souza Prabhu, Mangalore, Bombay Bandra now in Canada

    Wed, Jun 16 2021

    Thank you dear friend, Mr Naveen Julian Rego for such a good analysis of your very fair suggestions and advices. God Bless you for your endeavours !

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