Prajna Capital - An Investment Guide

Any emerging investor, would have studied all the avenues of investments and understands cash based investments like FDs have a fixed term and a fixed return but at times the returns do not match inflation. Debt investments like income funds yield a moderate rate of return but again though there is a high level of capital protection the investment may still lose out to inflation. Equities and equity mutual funds give a superior return over time but can be highly volatile. Gold works well with high inflation but gold allocation is limited. Real estate has been an excellent investment avenue but requires higher investments and liquidity could be a problem. How to control risk and yet generate a positive return over inflation? The first step would be to determine the ideal asset allocation; this could be derived by deciding what time horizon is and how much volatility. Further concern about what would be the right strategy for investing quarterly surplus and his cash in bank. As...