Constructing your first investment portfolio is an achievement in itself. After all, it is your first step towards wealth accumulation. Building a portfolio involves distributing your investment amongst asset classes like equity, debt, and cash. It is known as asset allocation.
Although equity is the best tax-efficient and inflation countering vehicle, putting all your money in equity isn’t a prudent move. You need to diversify the sums that are to be allocated in each asset class as per your investment goals. It is always wiser to be a long-term investor in order to accumulate greater corpus.
Your investment horizon would ideally be around 10-15 years. Once you have constructed a portfolio, you need to rebalance it periodically to keep the portfolio’s risk within expected limits due to market fluctuations. You can do it once in every six months or a year.
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