Betting on investment strategies always wins
7. This strategy above can produce a minimum rate of return of 12.25 per cent p.a. over blocks of every 3-5 years. The beauty of this strategy is that almost 70 to 75 per cent of your money is liquid or near liquid at any time. This gives you great flexibility to take advantage of prospective opportunities.
Did we forget something? Risk management is what you are perhaps thinking. In my view risk management today is presented and used by most advisors as a marketing concept more than a financial concept. Most people do not understand risk and how it is to be managed. If you as a consumer is saying balanced risk you are saying this from an immediate perspective as you are scared and feel that at least half my money is very safe. But if you decide to invest in an diversified mutual fund for the next 10 years it is almost certain that you will make money and far more money than what you would make in a FD or PPF or similar. So where is the risk then? As a consumer, if you plan to build long-term wealth you do not need to decide and worry on risk levels it is the advisor who must control risk in the deployment of your funds over time. Even that is part of good advice and a good strategy.
—Author is Director, Transcend Consulting, email@example.com
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