Moneycontrol
Last Updated : Sep 24, 2018 11:57 AM IST | Source: Moneycontrol.com

Five factors to consider before changing your portfolio allocation amid market volatility

When the total wealth increases, it calls for a change in asset allocation

Moneycontrol News @moneycontrolcom
Markets witness volatility and there are factors such as political or economic which may impact your investments both positively and negatively. As a result, your investment decision may go wrong because of these factors. Here are five important reasons you would have to change your asset allocation:
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Markets witness volatility and there are factors such as political or economic which may impact your investments both positively and negatively. As a result, your investment decision may go wrong because of these factors. Here are five important reasons you would have to change your asset allocation:

Change in personal profile | When a dependent becomes self-dependent or when a person retires, his/her portfolio needs to be redesigned or asset allocation revisited. This could give the person a regular income with less volatility.
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Change in personal profile | When a dependent becomes self-dependent or when a person retires, his/her portfolio needs to be redesigned or asset allocation revisited. This could give the person a regular income with less volatility.

Levels of risk tolerance | Every individual is exposed to market risks while investing money in stocks or mutual funds. However, this should not be factored as the only criteria before investing money because asset allocation also depends on one’s risk tolerance capacity.
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Levels of risk tolerance | Every individual is exposed to market risks while investing money in stocks or mutual funds. However, this should not be factored as the only criteria before investing money because asset allocation also depends on one’s risk tolerance capacity.

Power of Compounding | Young investors have an advantage in investing since the longer you stay in the market, the less risky your investment becomes and the more corpus you can generate over a period of time. This happens because of the compounding effect and the rupee cost averaging benefit you get over a long term.
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Power of Compounding | Young investors have an advantage in investing since the longer you stay in the market, the less risky your investment becomes and the more corpus you can generate over a period of time. This happens because of the compounding effect and the rupee cost averaging benefit you get over a long term.

Non-performing investments | Never sell your funds just because they are not performing in the short term. If you feel your investment is not giving you the returns despite the risk, you may want to relook your options. However, bear in mind that risk and returns are also a function of time. The market is a very volatile entity, and corrections happen over time.
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Non-performing investments | Never sell your funds just because they are not performing in the short term. If you feel your investment is not giving you the returns despite the risk, you may want to relook your options. However, bear in mind that risk and returns are also a function of time. The market is a very volatile entity, and corrections happen over time.

Nearing financial goals | In order to secure your long-term gains from equities or equity mutual funds, it becomes crucial to change your allocation between equity and debt so as to minimize the risk and secure your gains till the time you achieve your financial goal successfully. In most cases, equity investments average out in the long run and give you good returns.
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Nearing financial goals | In order to secure your long-term gains from equities or equity mutual funds, it becomes crucial to change your allocation between equity and debt so as to minimize the risk and secure your gains till the time you achieve your financial goal successfully. In most cases, equity investments average out in the long run and give you good returns.

First Published on Sep 24, 2018 11:57 am
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