World Financial Planning Day 2023: Five tips to become a crorepati
Today, October 4, is World Financial Planning Day. This is an initiative of the International Organization of Securities Commissions (IOSCO). World Financial Planning Day is observed to help raise awareness of the importance of financial planning. Besides being aware, it is very important for everyone to be financially independent.
On World Financial Planning Day 2023, here are some tips for investors, that they should follow for wealth creation.
Portfolio diversification is a fundamental investment concept based on the principle that various asset classes, perform differently in different conditions. It involves constructing a portfolio that includes a mix of different asset classes, such as cash, equity, debt, alternative investments, and commodities
By spreading investments across different instruments, investors can potentially minimise the impact of any single investment's poor performance on the overall portfolio at any point in time.
“In simple terms, an investor’s two main tasks are to identify the asset allocation that best fits his or her objectives, profile, investment horizon, and circumstances, and to then ensure that they manage the inevitable ups and downs of markets and avoid making mistakes in times of market stress," said Shiv Gupta, Founder, and CEO of Sanctum Wealth.
This personal finance rule says that individuals should divide their income into three categories. 50% should be allocated for spending on needs, 30% should be spent on wants, and 20% on savings.
A 60:40 portfolio means that investors should have 60% in equities and 40% in debts. Pankaj Mathpal, MD & CEO at Optima Money Managers said that “investors should first think about their risk tolerance and capacity."
He further added that equity
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