60:40 Investment Rule: 60:40 rules in the world of investment have been a well-known way for a long time. According to this rule, 60% of your total capital is put in the stock market i.e. equity and 40% share in bonds or fixed income instruments such as debate funds. The purpose of this is that on one hand you get good returns in a long period, and on the other side some safe and stable income should also remain. But the question is, will this formula work even in today’s changing times?
Is 60:40 rule of investment right
60:40 Rules may still have a good start of investment, but its formula may be different for everyone. Today, flexibility and understanding is the most important in the investment world. It is better than just adopting a rule closing an eye and investing only after understanding your need and risk.
Old strategy, new thinking
According to the expert, this model is still useful, but in today’s time it would not be right for every investor to adopt it in the same way as it was earlier. There are rapid changes in the market, sometimes global crisis, sometimes technology boom and sometimes changes in interest rates. In such a situation, the thinking and priorities of investors have also changed.
According to managing partner Prasanna Pathak in The Wealth Company, the return on the bond is now quite good and the international stock markets are also on cheap valuation. So the 60:40 model can still be a strong base today. However, he also admitted that this model will not work for everyone as soon as possible.
What do new -age investors want?
Equity head of Tata Asset Management Rahul Singh says that young investors are no longer afraid of taking risks. They are investing in small-cap and themetic funds (eg AI, Green Energy) in search of sharp returns. However, these funds can be quite ups and downs. Rahul’s advice is that such investors should invest in balanced funds such as flexi-cap or mid-load caps to maintain risk and returns.
Is 60:40 changes necessary?
Kaustubh Belapurkar, a research director of Morningstar India, says that the 60:40 rules are not a fixed formula, it is just an early guideline. The real task is to create a portfolio according to your investment target and the ability to take risks. He warns that many young investors are ready to take risks, but they do not have that much financial backup. In such a situation, if a sector falls, then there may be great loss. Therefore, diversification is always necessary in portfolio.
How should the strategy be for the future?
While making investment plans for the next 5-10 years, experts recommend to review your portfolio from time to time and change it if needed.
Rahul Singh says that now not just equity and date, but Sona (Gold) is also becoming an important investment option. Multi-asset funds, which invest in many types of asset classes simultaneously, can also be better options. Prasanna Pathak is of the opinion that sectors like technology, finance and infrastructure can perform well in the coming times, so they should be noted.
With this announcement of RBI, the shares of gold companies will be on the seventh sky, you will be with this rule