Some factors like geopolitical tension, rising crude prices, fear of tightening interest rates, inflation, uncertainty due to COVID 19, rise in bond yields are some of the factors causing the decline in equity.
Assets Allocation Strategy After Budget 2022: The budget is considered a booster for the capital market. But this time after the budget, there is ups and downs in the market. By the way, global sentiments are seen to be more responsible behind the weakness in the stock market. Some factors like geopolitical tension, rising crude prices, fear of tightening interest rates, inflation, uncertainty due to COVID 19, rise in bond yields are some of the factors causing the decline in equity. While there is a rise in certain commodities, the bond market is also seeing a boom. In such a situation, the question before the investors is how to prepare their asset allocation strategy going forward. How much money to invest in which asset?
Experts say that big announcements have been made for many sectors in the budget, due to which there will be growth in the companies related to them. Equity market also has a better long term outlook. But even at the present time, the factors which are there in the market, they cannot be ignored. In view of this, investors should invest their money in a balanced manner. So that all types of risks can be covered.
how much money to invest in gold and silver
Anuj Gupta, VP-Research, IIFL, says that at present, there should be an allocation of 25 to 30 percent of the overall investment in commodities for the next one year. According to him, the government has focused on the agri sector in the budget. Many roadmaps will come forward for how to boost the rural economy. In such a situation, if rural income increases, then buying in assets like gold and silver will increase. At present, 10 to 15 percent of the overall investment should be invested in asset classes like gold and silver.
The current price of gold in the domestic market is Rs 48200 per 10 grams, it can see a price of Rs 49000 in a very short term. At the same time, till the next budget, it can remain in the range of Rs 5000 to Rs 52000.
Don’t Ignore Crude
He says that whatever is happening in the market, the biggest contribution in it is the rising prices of crude. Crude has reached $ 94 per barrel in the international market. Due to the tension between Russia and Ukraine, there is a possibility of further rise in crude. If geopolitical tension increases, crude can go from $ 98 to $ 100 per barrel. In such a situation, in the short term, you can take advantage of 8 to 10 percent allocation in it. Apart from this, it is advisable to invest at least 5 percent in agri commodities.
What is the ratio of equity and debt
AK Nigam, director, BPN Fincap, says that even though the market is under pressure, the long-term outlook is better. However, it is advisable to keep the ratio balance of equity and debt for now. Allocation based on your age and risk profile.
If you are young and have the ability to take risk, then the ratio of equity and debt should be 80 and 20 percent. If you are a moderate investor and your age is between 40 years to 50 years, then this ratio should be between 60 and 40 per cent. Similarly, if you do not want to take market risk at all or age is more than 50 years, then keep this ratio between 20 and 80 percent. Short duration bonds are also a better option in the UK as interest rates are going to rise further. This will reduce the yield of long term bonds. He says that this is the time to do it in equity and debt. If equity market picks up, book profit and put in debt. Similarly, if there is a fall in equity, then shift some percentage of the debt towards equity.
(Disclaimer: Investment advice in different asset classes is given by experts. These are not the personal views of The Financial Express. Markets are subject to risk, so consult an expert before investing.)
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