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5 tips to create a balanced investment portfolio

By Finserv MARKETS - Oct 15,2019
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5 tips to create a balanced investment portfolio

You might have multiple financial goals, from purchasing your own house or vehicle to funding the cost of your next vacation, and from meeting the expenditure for your child’s foreign education or marriage to building a corpus for post-retirement years. The first step for these goals is savings, and the next; investment. With inflationary trends pushing up the cost of living expenses, you need a viable financial instrument, which not only provides good market-linked returns, but also involves marginal risks. With the option of various kinds of mutual funds to suit different financial goals—be is short-term, mid-term or long term—and every investor—the conservative one with low risk appetite along with the aggressive investor with high risk appetite—mutual funds can just be the right investment instrument for your unique financial requirements.

Understanding mutual funds

A mutual fund is an investment tool that pools money or funds from a group of people or investors with a mutual aim to earn a good return on their investments. Mutual funds are managed by asset management companies (AMCs) that hires fund managers to invest the money in various stocks, bonds and securities to earn good returns. Mutual funds are classified according to different criteria like structure, asset class, investment objective, speciality and risk.

On Finserv MARKETS, you can opt for the best mutual funds, which are commensurate with your goal, be it wealth creation, requirement of retirement corpus or any other financial need.

Here is a list of five tips to create a balanced investment portfolio, while investing in mutual funds.

1.Identify your financial goals

The first thing you need to do is to identify your financial goals. They can be short-term, medium-term or long-term. You have the option of investing in different mutual funds for your various goals. For instance, you can select ultra-short-term funds or liquid funds for your short-term goals along with Equity Linked Saving Schemes (ELSS) for mid-term, tax-saving goals and balanced, index or gold funds for your long-term goals. You must remember that a balanced investment portfolio is a mix of both long-term and short-term investment options. You can inform your fund manager about your financial goals so that the mutual fund investments are made accordingly.

2.Have tangible financial goals

According to market experts, financial goals should also be Specific, Measurable, Achievable, Realistic and Time-bound (SMART). Rather than having an intangible goal like ‘making a lot of money in a decade’, or ‘substantial wealth creation within a few years’, you should zero-in on the specifics, and invest accordingly in mutual funds.

3.Identify your risk appetite

You should also identify the risk that you are willing to take on your mutual fund investments. For instance, you can ask your fund manager to invest in equity funds or aggressive hybrid funds if you have a high risk appetite. Otherwise, you can invest in low to moderate risk funds, like debt or conservative hybrid funds.

4.Diversify your investment portfolio

Besides ensuring long-term growth of your investment, a diversified portfolio in mutual fund investments protects your money from market-related risks. By spreading your investments in various asset classes, companies and sectors you can spread the risks. Mutual funds also provide you the option of asset allocation, where your fund manager allocates your investment into various asset classes on the basis of your age, risk appetite, lifestyle and financial goals. This allows you to invest in aggressive asset classes at a younger age, and then shift to stable investments later.

5.Monitor and realign

You must monitor the returns on your investment in the best mutual funds, and assess whether they are in sync with your financial goals. You can ask your fund manager to realign the investments into other asset classes or sectors, if you are not happy with the returns.


To have a balanced investment portfolio, while investing in the best mutual funds, you must ask your fund manager to diversify the portfolio across various asset classes as per your financial goals and risk appetite.

Before investing in any mutual fund, you must always keep in mind that mutual fund investments are subject to market risks. You can consider the best mutual funds on Finserv MARKETS, which allows you to invest directly without brokers or commission agents. Along with low transaction costs, you can divide your funds into smaller parts across different companies to make the most out of your investment portfolio. At Finserv MARKETS, your funds will be in safe hands with professionals who have expertise in reading and analysing the investment market and helping you gain higher returns on your mutual fund purchases.

Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!


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