Deciding on Asset Allocation for a Financial Goal - Highlights

Metadata

• Author: M. Pattabiraman
• Full Title: Deciding on Asset Allocation for a Financial Goal
• URL: https://freefincal.com/deciding-on-asset-allocation-for-a-financial-goal/

Highlights

• For goals less than 5 years away: no equity exposure. (View Highlight)
• Between 5-10 years: Not more than 40% for an important goal and about 60% for a less important goal. (View Highlight)
• Between 10-15 years: 40-60% (View Highlight)
• Above 15 years: 60%. (View Highlight)
• Above 15Y, I expect no more than 10-12% from equity. Anything above 14% is nuts. Between 10-15Y, 10% Below 10Y, 8%. For debt, just the post-tax return from FD for the duration you have in mind: 6-7%. (View Highlight)
• Equity exposure: 60%. Return expected 12% Debt exposure: 40%. Return expected 7%. So the portfolio return = (60% x 12%) + (40% x 7%) = 10% (after tax). (View Highlight)