Mastering the Retirement Puzzle How risk and Asset Allocation Holds the Key

Retirement planning is much like solving a complex puzzle. Each piece - be it longevity, inflation, market volatility, sustainable income stream – must be carefully aligned to create a better and comfortable future. The key to finishing this puzzle lies in understanding risk and learning how to allocate your assets wisely.

Your Risk Appetite is a Function of

Suggested Equity – Debt split

Source: Internal. Views expressed above are indicative and should not be construed as investment advice or as a substitute for financial planning. Due to the personal nature of investments, investors are advised to seek professional advice before investing in any scheme. The above is not a recommendation or investment advice, investors are advised to invest as per their investment objective and risk appetite.

“Don’t put all your eggs in one basket”

It’s an age old saying and applies to investments as well.

Asset Allocation is one of the important steps in one's investment strategy. It means to diversify investment portfolio among different asset categories such as:

• Equity – Equity represents shares of ownership in a company. They have a potential for capital growth in the long run with high volatility.
• Debt – Debt represents fixed Income/bonds which means loan given to a borrower for a specified time period in return of regular interest payments. They have a potential for stable growth with low volatility.
• Cash - Cash is suitable for very short term needs such as parking money for emergency needs or for surplus fund where the investment is undecided.

Why Asset Allocation?

Winners Rotate

No single asset classes have consistently delivered higher return year after year and different asset classes perform differently under different market cycles. Winner of one year may become loser in the following year and vice-a-versa. The table below shows importance of diversifying within the asset classes while creating a portfolio. Schemes should be selected in a way that all schemes should not go up or fall together thereby reducing overall risk of portfolio.

The table below shows how various indices have performed year-on-year basis:

To simplify asset allocation for your retirement, you could consider investing in HDFC Retirement Savings Fund

HDFC Retirement Savings Fund is a mutual fund scheme designed to help investors build a retirement corpus and aim to achieve their dream of retiring in style or even retiring early. It offers three different investment plans tailored to various age groups and risk profiles:

Views expressed above are indicative and should not be construed as investment advice or as a substitute for financial planning. Due to the personal nature of investments, investors are advised to seek professional advice before investing.

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.