Often—and over a period of time—we put in money to make investments in a piecemeal manner. In mutual fund terms, we buy one mutual fund scheme today, another one say after 2 months, then again another a few months down the line and so forth.
By the time we make our fourth or fifth investment, we tend to forget why and when we had made our first investment. This typically happens when you don’t do asset allocation and buy funds in isolation of one another.
Asset allocation...
When Mangaluru-based financial planner Poornima Katpadi on-boards new clients (or investors) for providing financial planning services, one of the most glaring things she notices in her clients’ portfolios is the absence of asset allocation. “Most of the new investors have far too many equity funds in their portfolios. There is very little or zero exposure to debt funds. They are over-exposed to equities,” said Katpadi.
