Page 114 - Connect 2 Impact Souvenir Flip Book

Member Articles

2. Diversification through Asset Classes
The four major asset classes are Equity, Debt, Real
Estate and Precious metal. Experts suggest the right
proportion for diversification depending on the risk
bearing capacity of the investor, choose the one suitable
to you but do not put all the eggs in one basket. Fixed
Deposit is the traditional fixed income Investment.
Now we have better substitutes in the form of debt
CA Sneh Lohia mutual funds which are equally safe, more liquid and
tax friendly. Gold works as a hedge in difficult time and
long-term return is not bad too. Equity (stocks or Equity
Are you managing your finances well? mutual funds) gives maximum return in long terms.
Being a chartered accountant, we are supposed to Real estate as an asset class is also very popular with
be an expert in managing our savings and multiplying lots of options being not so liquid investments, it is to
them…are we doing it? We very well manage the be decided very carefully.
company finances we work for or the finances of our
clients, what about our own financial planning? think for 3. 12:20:80 Asset Allocation Strategy
a moment, is it not taking a back seat always? This strategy helps in dividing the portfolio of asset
classes in the right proportion among Equity, Debt and
However, managing our personal savings is as essential Gold. Amount equal to 12 months need should be kept
as taking care of our health. Below are some valuable in banks or liquid funds as emergency fund. Out of the
financial planning basics/techniques.
balance, 20 % of the portfolio should be kept in Gold.
1. Investing for Financial Goals 80 % of the portfolio can be kept in diversified equity
We need money at specific time in the life stages. portfolio.
Some of them are Retirement, buying a home, starting To sum up, asset class for the goal is decided on the basis
a business, Getting Married, children education, etc. of time available for the goal and the money required for
These can also be termed as the Financial goals. the investment goal. For example, Retirement Goal is
Identifying the financial goals of your life and investing a long-term goal. Equity is considered the best asset
accordingly can be a game changer. Starting early with class for this goal. Longer the term available, one can
focused goal can give advantage of compounding and invest in more risky asset classes for better returns. For
help in selecting right type of asset class suitable for the short term goals, Debt is the most suitable asset class.
investment goal. Setting goal and allocating investment Wish you all Happy Financial Planning!!!
ensures remaining invested for goal which is long term.
Pool investment can result in withdrawing money for
the short-term goal at the cost of long-term goal if both
are not quantified properly.

114 www.icaidubai.org

Annual International
Annual International
#SharingKnowledge #CreatingGoodwill 40 TH Conference 2022 40 TH Conference 2022 #SharingKnowledge#CreatingGoodwill
#SharingKnowledge#CreatingGoodwill
Souvenir
Souvenir