dear experts,
Please shadow us on portfolio diversification. If an 30 yrs healthy person has to diversify the investments for a long term goal of above 10 yrs., how to proceed (insurance and emergency fund part is taken care off).
I am wondering if only Equity funds (Large and Mid Cap) along with PPF (considering Debt fund) will cover the whole investment part in ratio of 70:30 to begin. Rebalancing can be done as per age/risk appetite. My 1st thought – Is it really required to have Balance fund and Liquid fund in the portfolio just to diversify though we know that since the duration is more than 8-10 yrs, equity will beat all other funds. My 2nd thought – What if the equity market is down for considerable amount of time 1-2-3 yrs….how much it would impact the overall investment/return. Is that still we can acheive the goal or rebalancing is required to move the equity funds into Balanced/liquid funds?
Also, how many funds one should take under 1 cap (equity/balanced/liquid)…2,3 or 4.
What are your take on this? kindly put down.
regards
debojyoti