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Know 4 thumbs rules of investing this festive season

Know 4 thumbs rules of investing this festive season

Know 4 thumbs rules of investing this festive season
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By CNBCTV18.com Contributor Oct 2, 2022 2:12:23 PM IST (Published)

Well-known Wealth Manager Ankit Yadav decodes where to invest money this festive season amid uncertainties in the global macroeconomic conditions.

With the upcoming festive season in India and uncertainties in the global macroeconomic conditions, the query arises in every investor's mind about where to park and invest money. This is the common question that, as a Wealth Manager, Ankit Yadav faces every day and has increased rapidly in recent times. So let's decode where to invest money in these circumstances from the well-known Wealth Manager Ankit.

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Money management recipe is very important for all of us, irrespective of our financial condition. So as a wealth manager I always follow the thumb rules to keep balance in my investing.
So below are the strategies.
The 50-50 Thumb Rule
Whenever in doubt or in times of uncertainty, it is always better to sit 50 percent with cash and invest remain in riskier assets like equities, mutual funds etc.
The 80-20 Thumb rule for Equities
I always suggest investors for equities to follow the 80-20 rule in which 80 percent should have been allocated to MFs with categories such as index, large-cap, and mid-cap. While remaining 20 percent needs to be allocated in direct stocks like blue-chip stocks, moats forming stocks and some midcaps. This method will help investors to diversify their portfolios.
50 percent safe cash Thumb Rule
The 50 percent which investors sit on cash also needs to diversify well. Investment is not only about equities, it's all about how well one manages money whether it's debt part or equities. So I always recommend investors instead of keeping cash in the bank account, utilize it in liquid funds – these funds are generally safe and will provide a decent return to investors.
10 percent Gold Rule
It's always wise to invest in gold at around 5-10 percent of your total portfolio. It will help investors to hedge their portfolios during times of turmoil or economic recession. In an economic downturn, the prices shift upside in gold while equities fall. This will provide a hedge to the portfolio to keep the return and risk-reward balance.
So in this festive season, if investors keep discipline and invest in a well-diversified way, then the current volatility will have very less impact on their portfolio and in future, they will compound their wealth as well. So invest in Liquid Fund, MFs, Index Fund, Gold etc. based on the above thumb rule to achieve your desired financial goals.
-The article is authored by Ankit Yadav, a wealth manager. The views expressed are personal.
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