Systematic Asset Allocation in investments.

Stick To Your Asset Allocation/benefit of the Asset Allocation

?Very often, we tend to get swayed by our emotions and sometimes make irrational decisions about money and investing. Our portfolio becomes the victim if we oscillate between the extremes – fear and greed.

?Case 1:?At the time of investor, you are an investor with a long-time horizon, of more than five years.?When the interest rate cycle hits your fixed income scheme, you suddenly realise you don’t have the stomach to digest interest rate volatility.?Suddenly, your bank’s meagre yet ‘guaranteed’ returns are more attractive.?You sell your FIS units in a hurry.?Possibly, you will never come back to investing in FIS for your life.?Buying at highs and selling at lows – whose fault it is?

?Case 2:?Equity markets are booming, and it appears that everyone is making money, especially your jealous colleague who is very happy trading away life’s savings.?You don’t even notice the statement of the CEO of the largest discount broking firm in the country that 99% of the account holders make lesser returns than an FD interest.?You are now a very high-risk taker and want to invest in only such schemes that have delivered 40%+ CAGR in the last 12 months.?You don’t even realise that CAGR calculation exaggerates high short-term returns (and negative short terms returns too).?The good story doesn’t last long as the equity market cycle reverses and traders start unwinding their bets.?Your jealous friend stops bragging, and the CEO’s words come true.?You now stare at your mobile app which shows the schemes that once had +40% CAGR are running south with -40% CAGR.?It’s inevitable that you redeem the units and shift the remaining money to ‘safe’ FD.?Your risk tolerance now has plummeted to ‘very conservative’

?For lifelong investors and MFDs who have gone through such economic cycles (or even worse), this is nothing new.?These are the same cases of human emotion oscillating between fear and greed.

?Asset allocation is a powerful tool in your hands to control your money emotions. Many successful mutual fund investors use it to manage their portfolios. The principles of asset allocation help you in timely rebalancing and avoid you falling into the trap of buying at highs and out of panic selling at lows or not scaling up your allocation because of fear. A successful investment process tells that you should invest more at lows. If you are out of cash to make a new investment, an asset-allocated mutual fund portfolio can help you in buying at lows. Financial Market is cyclical and provides you with many opportunities to buy at lows if you follow the principles of asset allocation. There are many types of mutual fund schemes that have built-in asset allocation options and investing in such schemes saves you a lot of taxes and transaction costs.

?The stock market volatility, however, provided a golden opportunity to many willing mutual fund investors to buy at lows using systematic transfer plans (STPs). Many investors also increased their monthly SIP numbers to take advantage of the volatility.?A significant number of investors who had asset-allocated portfolios increased their portfolio weight to equity schemes.?

Why Prokens Opesmetrics?

As a large mutual fund distributor, Team Prokens has a long list of compliances to be met. The most important ones are Risk Profiling and applying Schemes’ Suitability Tests.?Over the last 16 years, we have helped many families to achieve their investment objectives and helped them build a handsome mutual fund corpus as well. Now, we need to keep up the growth of the corpus and protect it from the downside at the same time.?Asset allocation helps all types of investors to align their mutual fund portfolio with their emotional intelligence quotient.?Such investors scale up even during adverse market conditions, take advantage of time diversification and the inherent volatility, and emerge successful in meeting their financial goals. Sit with us to get a measure of your risk profile, find suitable products from a vast array of offerings, and zero in on your preferred asset allocation.?We need your serious involvement in this process because we want you to be a very successful investor.

After all, our name says it loud and clear.?We are Prokens ‘Opesmetrics’ – a firm that believes in ‘Open’ measurement of important investing metrics.?

If you want us to discuss with you, then message to us. we will be happy to answer you.