BQ Big Decisions: Why Portfolio Building Is Like Making The Perfect Biryani

BloombergQuint’s Big Decisions podcast gets you the insights you need to make big money decisions with confidence.

The ongoing lockdown has forced many of us to become better acquainted with our kitchens. And after a few minor mishaps, it’s quite likely that you now know exactly what you’re doing.

Now consider this - building a healthy investment portfolio, whether it be in debt or equity, is just like making your favourite food, like biryani for example.

What’s the first thing you must do when you’re planning to make a biryani? You make sure you have all the ingredients in the right proportions, because it won’t taste like biryani if you put too little rice and too much masala.

According to Mrin Agarwal, financial planner and educator, it’s a good idea to approach each goal-based investment in a similar manner: your investment portfolio should have a core allocation and a ‘satellite’ allocation. A lot of investors tend to chase returns, and in the process they forget that there is generally a greater risk associated with doing so. Investments with higher risk would generally go into the satellite allocation of your portfolio, and its size would depend on your risk profile, said Agarwal.

In light of the recent turmoil in the debt mutual fund investment space, BloombergQuint spoke to Agarwal about the ideal way to plan one’s investments and how it’s quite similar to making the perfect biryani.