Self Mentor

-5. Know Your Asset Allocation

Different asset classes perform well at different times and hence if you have different asset classes in your portfolio it will ensure that investments are well-cushioned all the time. 

For example, the return from gold remained low for a long time before going up since last year. Meanwhile, equities were delivering amazing returns before they crashed during the pandemic; however, during that time gold continued delivering great returns. Now, as an investor, if you have different asset classes in your portfolio, if one asset is not performing well during a phase, the other well-performing asset at that time would cover the loss. 

But how much you want to allocate for each asset class will depend on your risk appetite and not how much return it is generating at the moment.