BQ Big Decisions: An All-Weather Investment Portfolio That Requires Very Little Tinkering
BloombergQuint’s Big Decisions podcast gets you the insights you need to make big money decisions with confidence.
When it comes to asset allocation and portfolio construction, theories abound. One suggests that an investor’s debt allocation should be equal to their age. Others rely heavily on equity.
And more often than not, an investor’s approach to portfolio building is governed by which asset class is the flavour of the season. Such an approach could lead to disappointment because it’s hard to keep track of all the factors that govern the success or failure of any one asset class.
Ashish Shanker, head of investments at Motilal Oswal Private Wealth Management, made an argument for an equal-weight allocation to five asset classes — cash or liquid investments, debt, gold, Indian equity and U.S. equity.
On this BQ Big Decisions podcast, Shanker talked about the results of a back-test on this model for the last 30 years, the reason for inclusion of U.S. equity, and the thinking behind the equal-weight allocation.