Mutual Fund Corner: Key things to know about asset allocation

In this latest episode of ‘Mutual Fund Corner’, Harshvardhan Roongta, Certified Financial Planner at Roongta Securities discussed about the principle of asset allocation.

On asset allocation, Roongta said, “Asset allocation is nothing but an exercise wherein an individual undertakes to determine how much of the investments will go into say equity, debt, precious metals and real estate. So it is just an exercise of splitting investments into different asset classes.”

On need for asset allocation he said, “Each underlying asset has different characteristics and they behave in a different manner as per given market condition. For example, when equity markets are very volatile, you will find gold to be a safe haven. So, that is why an investor will first get into that zone wherein they will say that I am going to be splitting my money into different asset classes. So, that I have a good balance across different market conditions.”