Importance of Asset Allocation

Risk profile and financial goals are some of the major aspects that would help you to define your asset allocation.

The year 2022 has thrown up several surprises. The impact of all the developments in the year on the overall economy and hence personal finances of many people has been critical. Take, for instance, the stock market, which has been a tumultuous roller-coaster ride. In January 2022, the benchmark Nifty 50 was at an all-time high. By mid-June, the Nifty had witnessed sharp corrections of more than 10 per cent twice from its peak. The impact was severe, especially on those who needed to liquidate their investments for financial goals scheduled during the year. In fact, many investors were caught in a trap, confused about whether to hold on to their stocks and wait for the tide to turn or make a quick exit before the losses could pile up further.