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Showing posts with the label asset allocation

Portfolio Insurance - Why is it necessary ?

 Portfolio Insurance - Why is it necessary ?  There is no such thing as a Risk-free investment today. Rather than avoiding the fact that there is risk in investing in general, one should know how to handle risk properly. Investment risk can be minimized through asset allocation and Diversification.  Decentralization is when you are in a position to invest (Say One Lakh rupees), without simply investing in the Bank Deposits or in the Equity Market as a whole, but in a combination of asset allocation like Deposits, Stocks, Gold and Bonds. This way even if the Stock market goes down, your either investment instruments will provide the corresponding returns and give investment protection. At the same time while other investments are not able to reach the required returns that exceed inflation rate, Stock Market boom will increase your investment multiplier. Usually when the interest rates are low in Banks, then the rates are slightly higher in Bonds. As the Stock Market declines as a Major