When the economy is an expressway: secure your ride with airbags, seat belts

livemint.com:

₹4,949 crore, whereas the small and mid-cap categories combined received a total inflow of ₹51,442 crore ( ₹17,339 crore for mid-cap and ₹34,301 crore for small cap). In the hybrid category, the aggressive hybrid category saw an outflow of ₹1,337 crore, while the dynamic (balanced advantage) and multi-asset allocation categories received ₹6,446 crore and ₹19,249 crore, respectively. These flows are reflecting positive sentiments for riskier category and negative to neutral sentiments for conservative categories.

While the Indian economy is just like an expressway, it’s not the road, but reckless driving that can make it riskier. Fatal accidents mostly happen on the expressway and not on congested streets. When everyone is driving at 120kmph, it is very difficult for someone to drive at 80kmph.

Similarly, when your investment portfolio is delivering returns above expectations to meet your goal, there’s no need to add further riskier assets. Or else if the riskier asset’s weight is above your strategic asset allocation because of the recent rally in equity and more precisely in small- and mid-caps, investing fresh money into conservative assets is a wise decision. In a nutshell, adding fresh money in hybrid products like balanced advantage fund, balanced hybrid fund, and especially multi-asset allocation fund with considerable allocation to debt and gold is a wise idea.