Asset Allocation: The single most important financial decision of your life

Harry Markowitz came up with the Modern Portfolio Theory, where he looked at risks and returns of various asset classes. He introduced the concept of diversification, which allows investors to reduce risk without sacrificing significant returns by investing across different asset classes.

However, for a topic that has been discussed for over 70 years, I have not seen compelling data in India that confirms the theory across different asset classes (equity, fixed income, gold etc). Further, if this data exists, it should help point toward an “ideal” asset allocation for a certain holding period (say five years). So, we delved into this topic to give investors a data-driven guide for how to think about asset allocation and construct their own portfolios in the context of the Indian market

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