#TarakkiTalks

Personal Finance

Dynamic Asset Allocation Funds – strive for growth, limit loss

 Buy Low, Sell High Though, we all know that for generating reasonable returns, any investor should ‘Buy Low and Sell High’, yet, for an individual investor this is easier said than done.  It is not only difficult to track the market on a continual basis, while diversifying the risk, but it is also difficult to have the heart to buy beaten down stocks when market has fallen substantially and sentiments are running low. Besides, with increase in losses, the gain needed to break-even also increases. Moreover, for an investor, the pain of selling a stock at a loss far exceeds the pleasure of selling the stock at an equal amount of gain. Hence, the importance of containing the downside to the portfolio cannot be emphasized enough. That is where the expertise and knowledge of a fund manager comes into play – in selection of appropriate asset class at any given time while lessening the psychological pain of investors. Dynamic Asset Allocation Strategy Balancing exuberance with caution, a dynamic asset allocation strategy uses the market volatility as an opportunity for switching between asset classes to benefit from growth of equity market while reducing the volatility of returns. With the example of ICICI…

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