How to think about Asset Allocation in India – Part 1

Getting usual Asset allocation advice is like listening to in-flight safety demonstrations. The airline crew has to go through the motions, and you don’t even have to pretend to listen. 

That’s because the way we think and talk about Asset Allocation is broken. Asset Allocation is NOT about settling for lower return in exchange for lower volatility. 

In Part 1 of this two-part post, we examine the evidence how an actual and implementable asset allocation strategy outperforms an equity-only strategy. In Part 2 we’ll look at a few allocation scenarios and take a stab at what we think works best for most investors.

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Forget Stocks for a bit. Get your Asset Allocation right

This article was first published on You’ve heard of the three C’s by now. Courage. Cash. Conviction. You’re probably sick of them already. For the uninitiated, the three C’s are meant to galvanize the timid investor trying hard to avert her gaze from a screen dripping red. Don’t you know, they say, if your horizon is longterm, you can’t go wrong with equities? Equities outperform everything else out there. But great victory demands great sacrifice. So build Conviction, be Courageous, and deploy that Cash! Three C’s. But where’s the cash? You wonder to yourself. Weren’t the same C’s called

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How Indian investors can invest in foreign equities

Why Indian investors should (also) look overseas Pop quiz: What is notable about these names? ICBC China Construction Bank Agricultural Bank of China Bank of China Ping An Insurance Group No points for saying they are all Chinese companies. Here is another set of names as a clue: JP Morgan Chase Berkshire Hathaway Bank of America Wells Fargo Apple These are more recognisable American companies. What could they have in common with the first set of companies? More than might be intuitive: The 10 companies mentioned above are the top 10 largest publicly-traded companies in the world. In fact, three

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The difference between Financial Planning, Asset Allocation and Security Selection

I get a few emails every week asking for stock recommendations. So I ask a few questions to form the context of the person’s experience with various investment vehicles, track record, their ability and willingness to take risk. In many cases, at this point, I realize the person asking for advice on stocks has little idea of their current financial situation beyond how much they make each month. This short post will clarify and differentiate between three interlinked but distinct elements of the wealth-building process: Financial Planning and Investment Management (Asset Allocation and Security Selection). Financial Planning: “The Where” and

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