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Why is Asset Allocation important?

The year 2020 is nearly coming to a close. As volatile as this year has been, markets are currently sitting at all-time highs and yet, giving little indication of where they are headed from here.

Consequently, the importance of asset allocation will now be more crucial than ever to prepare investors for all future market scenarios.

“The difference between success and failure is not which stock you buy or which piece of real estate you buy, it is asset allocation.” – Tony Robbins

The problem

Investors today are faced with an unprecedented challenge:

How can one effectively manage a diverse set of investments and track asset allocation in real-time?

After all, each asset class is governed by its own set of rules and investors are expected to follow distinct guidelines for computing capital gain implications. Investors must also consistently rebalance their portfolios for adapting to frequent changes in market conditions.

What is asset allocation?

Simply put, asset allocation is an investment strategy that aims to balance risk by selecting an optimal mix of investments across different asset classes.

By understanding the tradeoff between risk & return for each investment, you can allocate your assets in a manner that helps you achieve returns while keeping your overall portfolio risk low.

At the heart of asset allocation is a portfolio diversification strategy. A well-diversified portfolio carefully selects securities that are not highly correlated in terms of performance and are characterized by different risk profiles.

How can MProfit help?

MProfit is arguably the only complete solution available to Indian investors for aggregating & tracking investments across Stocks, Mutual Funds, F&O, Bonds, Fixed Deposits, Insurance and all other asset classes.

With the ability to auto-import files from 700+ brokers, banks & registrars, MProfit eliminates manual record-keeping that is often time consuming and error-prone. If you use MProfit, you will never again need to rely on cumbersome spreadsheets & tools that you previously used for investment tracking.

Gain detailed insights into your portfolio performance with MProfit reports for Capital Gains, XIRR, Historical Valuations, Unrealised Gains & more.

MProfit also provides you an interactive dashboard to track your asset allocation & portfolio weightages in real-time.

By providing complete visibility into your portfolio, MProfit empowers you to make sound investment decisions. With MProfit, investors are able to diversify better and achieve higher returns in the long-term.

15 December, 2020