Invest for what your moneyneeds to accomplish.
Your investments should fit your goals, time horizon, financial position, liquidity needs, risk and what you already own.
Investment picture
Current portfolio
Portfolio value
₹28.4L
55%
30%
15%
What matters
Allocation should reflect the job your money needs to perform.
01 · Investment requirement
Start with what the money needs to do.
The right investment depends on the purpose of the money. A retirement investment and a short-term liquidity reserve do not necessarily have the same job.
Time horizon
When will the money be needed?
Required outcome
What financial outcome does the investment need to support?
Risk
What level of financial risk fits your circumstances?
Liquidity
How much flexibility does the money need to retain?
02 · Risk
Risk is about more than how you feel about markets.
Investment decisions need to consider both your willingness to take risk and your financial ability to absorb it.
Risk capacity
Financial abilityHow much financial loss or volatility can your overall circumstances reasonably absorb?
Risk tolerance
Personal willingnessHow comfortable are you with uncertainty and fluctuations in investment outcomes?
Investment context
Full pictureGoals, horizon, liquidity, existing investments and financial circumstances all matter.
03 · Asset allocation
Decide what role each part of the portfolio should play.
Asset allocation connects your investment requirement with the different types of assets that may be used to fulfil it.
Growth
Assets intended to provide long-term growth potential, with corresponding uncertainty and volatility.
Stability
Assets that may play a role in reducing portfolio volatility or supporting stability.
Liquidity
Resources that need to remain accessible when money may be required in the near term.
Illustrative example
One portfolio can have different jobs.
Allocation is not simply about choosing a percentage for each asset class. It is about matching capital to the requirements of the financial plan.
Growth
50%
Stability
30%
Liquidity
20%
04 · Investment selection
Products come after the requirement.
A product is a vehicle. First understand what role the investment needs to fulfil. Then evaluate products against that role and the overall portfolio.
Understand the decision process→Define the role
What does this investment need to accomplish?
Define the requirements
Risk, liquidity, horizon and portfolio fit.
Evaluate suitable products
Compare available investment vehicles against the requirement.
Check the whole portfolio
Make sure the new investment fits what you already own.
05 · Validation
Before acting, check what the decision changes.
An investment can look attractive on its own and still be unsuitable for the overall financial plan. The final question is how the resulting portfolio fits the plan.
Goal impact
Does the investment support the intended goal?
Risk impact
Does the resulting risk remain appropriate?
Liquidity impact
Does enough accessible capital remain available?
Portfolio impact
Does the investment fit with the rest of the portfolio?
How investment planning works
From purpose to portfolio.
The process moves from the financial requirement to the portfolio rather than starting with a product.
Understand the requirement
Goal, horizon, required outcome, liquidity and financial context.
Understand risk
Consider both financial capacity and willingness to take risk.
Build the allocation
Determine how capital can be distributed across different roles.
Select investments
Evaluate suitable investment vehicles against the defined requirement.
Validate the portfolio
Check the resulting effect on goals, risk, liquidity and the overall plan.
Start investing with context
Don't start with a product. Start with the purpose.
Understand what your money needs to accomplish, then build the investment approach around it.