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Missed out on equity rally? Don’t worry; it’s not the end of the world: Vasanth Kamath, Founder and CEO, Smallcase

This Diwali, learn to be regular with your investments. And though equities outperform all other asset classes over time, don’t forget to allocate your money to other assets as well, says Vasanth Kamath

November 04, 2021 / 12:22 PM IST

This Diwali, learn to be regular with your investments. And though equities outperform all other asset classes over time, don’t forget to allocate your money to other assets as well, says Vasanth Kamath

Most of us find it tough to set aside money for investing, given that we prioritize spending and splurging over the latest phone, dresses, and gadgets over consistently building a comfortable corpus for our future selves. Vasant Kamath, founder of Small case and an ace investor himself, having been in the markets for around 8 years now, is here to dish out some of his experience to all the young investors and millennials out there! Read on!

Investment is foremost

Kamath says that as soon as your salary comes, think of putting aside some money as an investment. “Invest upfront to a certain extent & using the rest to plan my spends & purchases makes it much simpler, optimal and financially prudent versus taking the other approach, where allocations for investments come last.”

Also, read | Why topping up your SIP every year multiples your wealth faster over time

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Don’t forget asset allocation

Another thing that works well for a regular investor is to have a plan and a solid framework in place before investing and then, carefully undertake the process of asset allocation, so that you are spared the agony of having to continuously monitor your portfolio per the market and as a result, repeatedly tweak your portfolio in accordance. You do not want to anxiously watch the adverse eccentricities of the market play out on your investments every day, do you? That is only possible if you have sufficient market exposure to various asset classes like equity for wealth generation, debt for capital protection, and more!

Also, read | How Balanced Advantage Funds take the botheration of asset allocation away from you

Per Kamath, “While the concept of asset allocation and diversification was more recent learning, it significantly removed any anxiety & FOMO (Fear of Missing Out) I had around managed my portfolio. Everyone has a different investment trajectory and goals to fulfill, and hence, it isn't right to compare your portfolios with theirs. “

Kamath’s mantra of escaping the frenzy and FOMO that has grappled the millennials and the current generation when it comes to crypto is to allocate 5-10 percent of his portfolio to the “more exotic, higher risk asset classes like IPOs, cryptocurrency” and more. While 30 percent of his portfolio is directed towards fixed income, the rest is dedicated to equity.

Also read | Millennials and cryptocurrencies: A story of missed profits, hard lessons, and losses

His words? “I make it a point to allot some money to unconventional asset classes as well so that I do not miss out on any opportunities. But for the most part of it, it's important to stick to a plan and an asset allocation strategy, so that you are all set to make the most of your investments!”
Ira Puranik

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