DEBOLINA ROY
Investments are separated into four overarching categories by using the 65-10-10-15 principle: 65 percent stock, 10 percent gold, 10 percent silver and 15 percent bond (fixed income). This diverse mixture offers both an opportunity for growth and a hedge against volatility. As such, when there is a downturn in one asset class there is an offsetting improvement in another asset class.
Equity positions make up roughly 65 percent of an overall portfolio and will include large-cap stocks (to provide stability) and mid-cap stocks (to provide growth), with a smaller portion of the portfolio (e.g., 15 percent or less) reserved for potential thematic/sectoral investments.
One of the main aspect of 65-10-10-15 method of investment is putting money in gold and silver. 10 percent of initial investments are allocated to both gold and silver as an alternative investment to serve as a hedge against inflation and economic uncertainty. The metals can also serve to reduce losses in equity or debt positions during volatile market conditions.
Debt instruments/fixed income provides a predictable return (with stability) via an allocation of 15 percent. By including bonds or similar instruments, the overall volatility of a portfolio can be reduced. These types of investments may be used as a safety net’.
By following the 65-10-10-15 method of investment, you will not impulse buy based on headlines or trends that do not run very long. This disciplined approach minimizes the risk of buying at market peaks or selling during corrections.
The method focuses on generating consistent returns rather than large annual returns. It is ideal for people who want to invest in a long-term manner, with lesser risk, moderate growth and financial security.