Well Balanced Portfolio

What it means by Well Balanced Portfolio and Why to build well balanced portfolio? Well, in simple language, well balanced portfolio means the portfolio which contains all the asset class in well balanced proportion. Say for Example, Equity, Debt, Gold, Real Estate, Liquid, Jewellery…etc..

Here is the example of well balanced portfolio.

- Equity 30%

- Debt 30%

- Gold 10%

- Real Estate 30%

However, the above is only one example of well balanced portfolio. In reality, you can build well balanced portfolio according to your needs, financial goals and risk appetite.

The main logic to build a well balanced portfolio is that, it will stabilize your wealth in any market conditions. Usually Equity, Debt & Gold have negative correlation. When Equity is down, Debt and gold will protect your portfolio and when the equity will be up, it will give you good capital gains and growth of your portfolio.

You should construct your portfolio according to your age, risk appetite and financial goals and balance it periodically. If you don’t like any asset class than you can simply omit it from your portfolio such as many people don’t like to invest in gold and real estate so they can simply omit it.

So build your own portfolio and become financially free