Monday, February 19, 2007

What is your asset allocation

I am sure all of you have heard about asset allocation in standard textbooks and other investment books/periodicals but I am curious as to what your real asset allocation is ? i.e. how far is reality away from textbooks. So my loyal readers, if you can leave a comment to this post, indicating your percentage of investment in each of the following asset classes and whether you are happy with the returns. I will consolidate the results and publish what is reality based on what I see from you folks.

F&O Market investments
Stocks (Shares/IPO)
Bonds (RBI, ICICI, REC etc.,)
Fixed deposits (Banks , third parties)
Equity Mutual funds
Debt mutual funds
Post office (POMIS)
Real estate (Apartments, vacant land)

Please dont post the actual amounts just the % distribution.


Vishal said...
This comment has been removed by the author.
Vishal said...

F&O Market investments = 0%
Stocks (Shares/IPO) = 12.67%
Bonds (RBI, ICICI, REC etc.,) = 0%
Fixed deposits (Banks , third parties) = 18.99%
Equity Mutual funds = 9.04%
Debt mutual funds = 0%
Post office (POMIS) = 0%
Real estate (Apartments, vacant land) = 47.41%
*Gold = 1.25%
*Cash = 10.64%

I am 25 years old, earning quite well, no dependants and a high appetite for risk. Do advise how I should realign my assets. Thanks

Anonymous said...

F&O Market Investment=0%
Bonds (ICICI) = 10%
Fixed Deposit = 25%
Equity Mutual Funds = 5%
Real estate = 0%


Vivek Venugopalan said...

Folks - I wanted to do an exercise where I can take the gathered data and present how real world allocation looks like and where things can be done differently. With just three data points (including mine) I dont think it is a fair exercise at this juncture. So I am deferring this plan for now and I will attempt to do this when I have suffcient data. So for Vishal and Gopal - sorry to disappoint you. I think you understand that we need to more data than this to make any rational judgements.

Vishal - I am not planning to give any specific advice for any single person's folio since I am not a finance professional who can really do so and this distribution and data does not provide enough information to make such a decision.

So folks please post your data for any reasonable analysis as a comment.

Vishal said...

Your predicament is quite understandable Vivek. Here's to better response!!

Anonymous said...

For my age group (30 to 40)
Equity/Stock (direct) 30%
Equity/Balanced MF: 25%
Real estate: 30% (excluding house where I am staying)
Secure: 15% (FD,PPF,PF, excludes cash in saving account)

I ideally want to reduce Direct equity investment from 30% to 25% and put this 5% in Gold. But I dont have safe locker and dont want the liability of storing it in house. Now that Gold ETF is released, I will divert my 5% investment into this.

Post 40 I want to reduce total equity exposure (stock+MF) to 40%.
btw. I am loosing faith in my own judgement of picking good stock. So thinking of giving more scope to MFs.

Vivek Venugopalan said...

that is by far a very honest and humble statement that I really appreciate. Too many times I see a 40+ year gold guy who is sitting in the broker's trading floor sweating and praying that the price of his Z grade scrip will go up. Makes me feel bad in a certain way. Do watch out for the real estate portfolio. That is a high number considering how fradulent the market is today, your risk exposure is higher.

Deepak Shenoy said...

Here's mine Vivek:

50% stocks, equity based funds and F&O
25% debt MFs/FDs
25% liquid

no real estate,post office, bonds.

I have a huge liquid amount because of two things: I maintain a 12 month buffer of expenses, plus I will have a near term cash flow issue.

I would typically allocate upto 70% of my assets in risk (where assets = money left over after a 1 year expense buffer). For my age (32) with zero debt I am happy to take on more risks; and am usually very aggressive.

I don't use high leverage and therefore don't invest in real estate. Even my F&O investments have a back-end cash allocation of between 50-70% of the exposure regardless of margin requirements.

When I buy a house it will be a liability, not an asset - I'm ok with that, except now is not the right time to take on a high interest, high leverage liability.

Jose said...

I suppose I am too late here. Still I am posting our personal portfolio hoping that we would get a better perspective from Vivek on it.

I am 39 and my wife is 33.

Here is the allocation of our financial assets:

50% in debt (POMIS, PF and NSC)

50% in equities (66% is in Private equity and 40% in Public Companies of which 80% is under my own management 20% in ELSS funds)