{"id":354,"date":"2026-02-21T13:08:36","date_gmt":"2026-02-21T07:38:36","guid":{"rendered":"https:\/\/subhshantiwealth.com\/sswblog\/?p=354"},"modified":"2026-03-16T15:04:55","modified_gmt":"2026-03-16T09:34:55","slug":"falling-markets-may-call-for-asset-allocation-outlook-money","status":"publish","type":"post","link":"https:\/\/subhshantiwealth.com\/sswblog\/falling-markets-may-call-for-asset-allocation-outlook-money\/","title":{"rendered":"Falling Markets may call for Asset Allocation – Outlook Money"},"content":{"rendered":"\n
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Rising inflation in developed as well as developing economies, as an after-effect of Covid-19-related economic stimulus combined with the Russia-Ukraine conflict, is taking a massive toll on equity markets worldwide. As of mid-June 2022, the benchmark Nifty 50 index in India has seen a correction of over 15 per cent from its peak.<\/p>\n\n\n\n

In such a situation, you will often come across suggestions to average down: advice to buy more equity. But should you not? The answer to this question \u2013 your financial adviser conversing with you \u2013 will help decide your asset allocation.<\/p>\n\n\n\n

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WHAT IS ASSET ALLOCATION?<\/strong><\/h2>\n\n\n\n

Simply put, it can be understood as investments curated to your specific needs by following the wisdom of not putting all eggs in the same basket. The most common baskets for investments are equity, debt, real estate and gold. These are also called asset classes. Now asset allocation is the formula that will tell you the proportion in which you should distribute your wealth in these baskets.<\/p>\n\n\n\n

The allocation will be different for people with different risk appetites and financial goals. If, for instance, your financial goals are several years away and you are in your early 30s, meaning you have a high-risk appetite, your asset allocation can be heavier towards equity. On the other hand, if you are approaching your retirement, meaning that your capital must be preserved, your allocation is likely to be tilted towards debt instruments for the reason being that equity investments tend to be relatively volatile.<\/p>\n\n\n\n

Take the recent market correction as an example. Capital erosion of over 15 per cent in just a few months is something that someone close to her financial goals might not be willing to accept. Contrary to this, someone who doesn\u2019t need that money in the near future can remain invested for a longer period for the market to move back to favourable territory.<\/p>\n\n\n\n

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IMPORTANCE OF ASSET ALLOCATION<\/strong><\/h2>\n\n\n\n

You might wonder why you can\u2019t invest all your money in equity or gold for that matter. That\u2019s simply because different asset classes behave differently in any given situation. Look at how these asset classes performed when Covid-19 struck in March 2020. Equity markets witnessed a massive crash, while gold climbed new heights. The demand for real estate and, hence, its prices remained subdued throughout the pandemic phase. As soon as the pandemic started receding, gold prices gradually came down and has since remained at a significant distance from its all-time high.<\/p>\n\n\n\n

At present, while the equity markets are facing a tough time, interest rates are going up. This means debt investment will hedge the equity portfolio to a reasonable extent in the current bear market.<\/p>\n\n\n\n

All of this points to a single direction. It is crucial to make good use of the asset classes so that your entire wealth is not adversely affected by any one portfolio or economic event affecting one or two of these classes.<\/p>\n\n\n\n

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HOW TO DETERMINE ASSET ALLOCATION?<\/strong><\/h2>\n\n\n\n

A highlight above, in the early years of your career when you do not have significant and immediate responsibilities, you can afford to take risks with your investments. Hence, your asset allocation must be tilted towards equity. Conversely, when your goals are close, or when your risk-taking ability is low, your allocation must be tilted towards debt.<\/p>\n\n\n\n

Now, it is also possible for a youngster to have a financial goal that will need funding in the immediate future. Even there, the allocation for that specific goal should be heavier on debt or fixed income. On a broader portfolio level, the same person can have a higher allocation to equity.<\/p>\n\n\n\n

In other words, your asset allocation will depend on your own individual circumstances.<\/p>\n\n\n\n

In the market situation like the one at present, you can make good use of the lower prices by revisiting your asset allocation. It is likely that your equity allocation has gone down due to the fall in markets. If you are unaware about your risk appetite, it is time you reach out to your financial advisor to fix your asset allocation as per your needs and financial goals.<\/p>\n\n\n\n

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\u201cRemember that asset allocation will be different for people with different risk appetites, financial goals and the time left to meet those goals.\u201d<\/strong><\/h4>\n<\/blockquote>\n\n\n\n
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Published<\/h3><\/div>

June 2022<\/p><\/div><\/div>\n<\/div><\/div>\n\n\n\n

Disclaimer<\/strong><\/h2>\n\n\n\n

This article is intended solely for educational and informational purposes. It does not constitute investment advice, trading recommendations, or a solicitation to buy or sell any securities or financial instruments. The views expressed are based on publicly available data, regulatory studies, and industry observations, including reports published by the Securities and Exchange Board of India (SEBI). Readers are advised to assess their financial objectives, risk appetite, and suitability before making any investment or trading decisions. Derivatives trading, including Futures & Options (F&O), involves substantial risk and may not be suitable for all investors. Past performance is not indicative of future results. Investors should consult a SEBI-registered investment adviser or other qualified financial professional before acting on any information presented herein.<\/p>\n","protected":false},"excerpt":{"rendered":"

Rising inflation in developed as well as developing economies, as an after-effect of Covid-19-related economic stimulus combined with the Russia-Ukraine conflict, is taking a massive toll on equity markets worldwide. As of mid-June 2022, the benchmark Nifty 50 index in India has seen a correction of over 15 per cent from its peak. In such […]<\/p>\n","protected":false},"author":1,"featured_media":858,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_swt_meta_header_display":false,"_swt_meta_footer_display":false,"_swt_meta_site_title_display":false,"_swt_meta_sticky_header":false,"_swt_meta_transparent_header":false,"footnotes":""},"categories":[87],"tags":[162],"class_list":["post-354","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ssw-in-news","tag-ssw-in-news"],"uagb_featured_image_src":{"full":["https:\/\/subhshantiwealth.com\/sswblog\/wp-content\/uploads\/2026\/02\/WhatsApp-Image-2026-03-02-at-5.31.31-PM-3.webp",1600,900,false],"thumbnail":["https:\/\/subhshantiwealth.com\/sswblog\/wp-content\/uploads\/2026\/02\/WhatsApp-Image-2026-03-02-at-5.31.31-PM-3-150x150.webp",150,150,true],"medium":["https:\/\/subhshantiwealth.com\/sswblog\/wp-content\/uploads\/2026\/02\/WhatsApp-Image-2026-03-02-at-5.31.31-PM-3-300x169.webp",300,169,true],"medium_large":["https:\/\/subhshantiwealth.com\/sswblog\/wp-content\/uploads\/2026\/02\/WhatsApp-Image-2026-03-02-at-5.31.31-PM-3-768x432.webp",768,432,true],"large":["https:\/\/subhshantiwealth.com\/sswblog\/wp-content\/uploads\/2026\/02\/WhatsApp-Image-2026-03-02-at-5.31.31-PM-3-1024x576.webp",1024,576,true],"1536x1536":["https:\/\/subhshantiwealth.com\/sswblog\/wp-content\/uploads\/2026\/02\/WhatsApp-Image-2026-03-02-at-5.31.31-PM-3-1536x864.webp",1536,864,true],"2048x2048":["https:\/\/subhshantiwealth.com\/sswblog\/wp-content\/uploads\/2026\/02\/WhatsApp-Image-2026-03-02-at-5.31.31-PM-3.webp",1600,900,false]},"uagb_author_info":{"display_name":"admin","author_link":"https:\/\/subhshantiwealth.com\/sswblog\/author\/admin\/"},"uagb_comment_info":0,"uagb_excerpt":"Rising inflation in developed as well as developing economies, as an after-effect of Covid-19-related economic stimulus combined with the Russia-Ukraine conflict, is taking a massive toll on equity markets worldwide. As of mid-June 2022, the benchmark Nifty 50 index in India has seen a correction of over 15 per cent from its peak. In such…","_links":{"self":[{"href":"https:\/\/subhshantiwealth.com\/sswblog\/wp-json\/wp\/v2\/posts\/354","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/subhshantiwealth.com\/sswblog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/subhshantiwealth.com\/sswblog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/subhshantiwealth.com\/sswblog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/subhshantiwealth.com\/sswblog\/wp-json\/wp\/v2\/comments?post=354"}],"version-history":[{"count":12,"href":"https:\/\/subhshantiwealth.com\/sswblog\/wp-json\/wp\/v2\/posts\/354\/revisions"}],"predecessor-version":[{"id":1394,"href":"https:\/\/subhshantiwealth.com\/sswblog\/wp-json\/wp\/v2\/posts\/354\/revisions\/1394"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/subhshantiwealth.com\/sswblog\/wp-json\/wp\/v2\/media\/858"}],"wp:attachment":[{"href":"https:\/\/subhshantiwealth.com\/sswblog\/wp-json\/wp\/v2\/media?parent=354"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/subhshantiwealth.com\/sswblog\/wp-json\/wp\/v2\/categories?post=354"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/subhshantiwealth.com\/sswblog\/wp-json\/wp\/v2\/tags?post=354"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}