Disclaimer: I am not an expert or even a seasoned investor in the stock market – I am just an interested layman trying to apply some common sense to the market to sustain the value of my assets. Hence, none of this is intended to be investment advice and I do not take responsibility for any consequences that may arise by investing based on this post. Feel free to use or ignore any thoughts proposed here at your own discretion. Thanks.
There are several investment avenues available to the US NRI investor. The choice of which items to invest in, and in what proportion, is driven by a combination of the risk-reward nature of each security, the individual’s understanding of the security, and the risk profile of the individual. For instance, based on my understanding of investment options, the following securities are the only ones I am considering at the current time: debt, real estate, equity, gold and international currencies. Of these, debt, real estate and equity are the growth/sustenance portion, while gold and currency are used to hedge against inflation and currency devaluation risks.
There are other avenues such as commodities, art, franchises, etc. which we will not discuss here at this time.
In general, the safer (less riskier) the security, the lower the potential of returns, and the higher the predictability of returns. Hence, an ideal portfolio will ideally consist of a mix of low risk, low reward securities and higher risk, higher potential return securities. For example, a sample mix in today’s scenario could be 20-50% in debt, 20-50% in equity, 2-5% in gold, 20-50% in land in India and 2-5% in international currencies. What actual percentage you choose would be based on your appetite for risk, and the risk associated with each security.
Disclaimer: I am not an expert or even a seasoned investor in the stock market – I am just an interested layman trying to apply some common sense to the market to sustain the value of my assets. Hence, none of this is intended to be investment advice and I do not take responsibility for any consequences that may arise by investing based on this post. Feel free to use or ignore any thoughts proposed here at your own discretion. Thanks.
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