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Investment in Equity plus Fixed Income Equity is one of the most fun asset classes in terms of investment. But it is criticized due to unstable nature. It is also risky in the short term. So should you avoid investing in equity? off course not.

Investments in two different types of instruments: There are instability in equity, there are ways to manage it. First, instead of investing directly in them, invest in equity-related products. Such as mutual funds Investment is disciplined, regular and outlook is of long term. Secondly, divide the equity into equities and other asset classes. The relationship between the second asset classes should be equal to the equation. If a particular event has a bad effect on an asset class, then its effect on the other will be good or it will remain stable. Equity and fixed income are good examples of this. Compensate to each other's shortcomings: Equity fluctuates. Therefore, you cannot predict its returns in the short term. But in the long term, it gives more returns than the second asset. Therefore, it should be given an important place in the investment portfolio. Instruments with fixed income give fixed returns in the medium term. However, due to the interest-rate of inflation, returns may be a little less. Equity and Fixed Income Instruments are different at all. They compensate for each other's shortcomings.


Understand this thing with some examples. In recent years, the worst time of equity market was from January 2008 to March 2009. Meanwhile, the Sensex dropped 60.9%. But during the same period, the fixed income (Crisil Composite Bond Fund Index) entities received a 7.8% return. During the 5 November 2010 to 20 December 2011, the Sensex dropped 27.8%, but during the period, the Crisil Composite Bond Fund Index was up 7.7%. During the period January 29, 2015 to February 11, 2016, the Sensex dropped 22.7%, during which the CRISIL Composite Index gave a return of 7.3%. Investor's risk profile will determine the ratio of investment: These examples show the importance of equity and fixed income in investment portfolio. Here the question arises in which proportion of money should be kept in both asset classes in order to get more returns. This depends on the investor's risk taking ability. Investors can invest in hybrid mutual fund schemes with the help of financial advisor. The hybrid fund is invested in both equity and fixed income instruments. Disclaimer:-The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.

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Investment in equity plus fixed income output  

Equity is one of the most fun asset classes in terms of investment. But it is criticized due to unstable nature. It is also risky in the sho...

Investment in equity plus fixed income output  

Equity is one of the most fun asset classes in terms of investment. But it is criticized due to unstable nature. It is also risky in the sho...

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