When people invest their money they are more or less forced to do an asset allocation. This could have been historical, deliberate or accidental.
I see people with one house (in which they are living), some equity investments, some mutual funds, and some fixed deposits. The thing is the whole ‘asset allocation’ is just a chance. Last week I was seeing the asset allocation of a 65 year old and there was a 50% equity and 50% debt kind of a portfolio. He also had a pension from LIC (super annuation), and some consultancy income. At this stage he did not need his income from dividends or even his interest income.
When I saw his portfolio I realised that HUL was the biggest share in his portfolio and he had done NOTHING to his portfolio since the 1980s. No fresh purchases, no sales…just accumulated the shares. Fairly obviously he was sitting on a lot of duds that did nothing for him. His uncle had given him some rights form of HUL that he faithfully filled…surely it had appreciated over such a long period of time.
He had some FDs which his wife was regularly renewing….and it included some stupid NBFCs. One such NBFC is a favorite amongst the middle class, but to me it looked (s) shady. I will not name the 3 -4 FDs he had – I know 2 of the promoters.
So clearly here was a portfolio running into 8 digits, but created almost thoughtlessly…but more luckily. He had not YET LOST any money on FDs except about Rs. 30,000 in the 1980s…the company just shut down. He hae equities and an FD in that Mumbai based engineering company….
My portfolio clearly has an equity bias and will remain so. You should have a bias that makes you happy, and achieve your goals WITHOUT giving you sleepless nights. Elsewhere I have written that I am indifferent to your portfolio. Let me just reiterate that. There are people who try to draw me into an argument about how FDs are good – even great. Good for you.
I am with equities, and not sad for that.
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