What this unit covers
Learn to think in percentage allocation across asset types, rather than picking investments one at a time with no overall plan.
By the end you will be able to
- Explain what asset allocation means and why it is set before picking investments.
- Compare two portfolios with the same assets in different percentages.
- Distinguish owning varied assets from having a planned percentage allocation.
How it starts: Same Investments, Different Outcomes
- Two investors each put 1 lakh rupees into equity, debt and gold.
- One puts 70 percent in equity, the other puts 30 percent in equity.
- A year later, their totals are not the same.
Words you will meet
- Asset allocation
- Deciding what percentage of your money sits in each asset type before picking specific investments.
- Asset type
- A broad category of investment, such as equity, debt, gold or cash.
In this module: Building Your Portfolio
- Asset Allocation (this unit)
- Diversification Done Right
- Position Sizing
- Rebalancing & Staying With the Plan
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