Exploring Diverse Investment Avenues for Optimal Returns
Diversifying across equities, mutual funds, FDs, and Sovereign Gold Bonds (SGBs) is indeed a prudent approach to investment. However, optimizing your portfolio for better returns and risk management requires careful consideration and potentially exploring alternative investment avenues.
Currently, the majority of your portfolio (75%) is tied to the stock market, offering potentially high returns but also exposing you to significant market fluctuations. While the remaining 25% is allocated to FDs and SGBs, providing stability but with comparatively lower returns. To enhance your portfolio’s diversification and potentially improve returns, it’s worth considering alternative investments that can complement your existing holdings.
One promising alternative is fractional real estate investment. Allocating around 25% of your portfolio to this asset class can offer attractive returns of 10-14% while providing diversification benefits. Real estate investments often have minimal correlation with the stock market, meaning they may perform well even when equities are under pressure. However, it’s essential to conduct thorough due diligence on real estate opportunities and consider factors such as location, property type, and potential rental income.
Another option to explore is Securitized Debt Instruments (SDIs). These instruments pool together various debt assets, such as mortgages or credit card receivables, and offer investors a share in the cash flows generated by these assets. SDIs typically provide steady returns with lower volatility compared to equities, making them suitable for diversifying a portfolio. Allocating a portion of your portfolio to SDIs can help reduce overall risk while maintaining income generation.
Additionally, consider allocating around 10% of your portfolio to unlisted equity investments. These investments involve purchasing shares in privately held companies that are not traded on public stock exchanges. While unlisted equities can offer potentially higher returns compared to their listed counterparts, they also come with increased risk and liquidity constraints. Conduct thorough research and consider seeking guidance from experienced professionals before investing in unlisted equity.
Consulting with a financial advisor can provide valuable insights and personalized recommendations based on your risk tolerance, investment goals, and financial situation. An advisor can help you construct a well-balanced portfolio that aligns with your objectives and helps you navigate the complexities of alternative investments. By diversifying your portfolio across various asset classes, including alternative investments, you can potentially enhance returns while mitigating risk over the long term.
