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The next logical step post deciding the appropriate asset allocation is to implement the recommendation through most tax efficient, transparent, well-managed and at the same time sufficiently liquid investment products.

Investment Allocation Strategy & Insurance

Advise investment options to deploy savings in chosen alternatives. Asset allocation determines the overall asset classes for investment. The next critical step is to choose from a wide variety of investment options available amongst each asset class and make investments as per the plan. The key to strategize your investment allocation is to choose suitable investment vehicles that are tax efficient, well managed, and transparent and help you implement the asset allocation plan without compromising your liquidity.

Periodic Monitoring and Rebalancing

Returns on different asset classes in your investments portfolio usually vary over time and alter their proportions. Rebalancing is the discipline of reverting your asset allocation to your original allocation.

For example, let us consider Tarun invested Rs. 7,000 in equities and Rs. 3,000 in debt a year ago. Now, the debt funds he holds are valued at Rs. 4,500 and his equity funds are valued at Rs. 5,500. While his original asset allocation was 70:30 (equity:debt), Tarun is now holding 55% in equities and 45% in debt. In order to set his asset allocation back to his original and desired target, Tarun needs to sell a part of his debt investments and buy more in equities. This buying and selling of your portfolio investments in order to reset your asset allocation back to its original state is called rebalancing.

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