With equity markets hovering near-record levels and gold and silver correcting from recent highs, investors are wondering how to deploy fresh money. If you have ₹1 lakh to invest today, what is the ideal mix?
Market experts say the answer lies in disciplined asset allocation — balancing growth potential with downside protection.
Asset allocation remains the most critical factor in long-term wealth creation. The right mix depends on age, risk appetite, income stability and investment horizon. However, in the current environment of elevated global uncertainty and intermittent market volatility, most advisors favour a balanced yet equity-focused approach.
Despite short-term volatility, experts maintain that equities remain the most effective asset class for long-term wealth creation.
Prateek Nigudkar of Shriram AMC suggests a higher allocation to equities for long-term investors, supplemented by gold and debt for diversification and stability. Within equities, large caps should form the core portfolio, with limited tactical exposure to mid and small caps. He emphasises periodic review and alignment with individual risk tolerance.
Vaqar Javed Khan of Angel One recommends allocating 60 percent (₹60,000) to equities. Of this, 70–75 percent should be deployed into large-cap stocks or large-cap index funds and exchange-traded funds (ETFs) for stability and lower volatility.
Harshal Dasani of PMS, takes a slightly more aggressive stance. He suggests allocating 70 percent to equities, diversified across market capitalisations:
20 percent in large caps for balance sheet strength and earnings visibility
20 percent in mid caps to capture capex, manufacturing and domestic demand themes
30 percent in small caps for investors with a three-to-five-year horizon
However, he cautions that small-cap investing requires discipline and staggered deployment given higher volatility.
Traditionally, advisors recommend allocating 10–15 percent of a portfolio to precious metals. However, given rising geopolitical risks, currency volatility and sustained central bank buying, some experts now suggest raising this exposure.
Khan proposes allocating:
25 percent (₹25,000) to gold via gold ETFs or sovereign gold bonds
15 percent (₹15,000) to silver via silver ETFs
According to him, this 60-25-15 allocation balances growth from equities with protection from precious metals. Gold acts as a hedge against rupee weakness and inflation, while silver offers tactical upside due to its industrial demand from solar, electric vehicles and electronics sectors.
He also advises deploying funds gradually over two to three months instead of investing in one lump sum.
Dasani suggests a combined 30 percent allocation to precious metals — split equally between gold and silver. While gold provides stability during equity drawdowns, silver, with its dual role as both a precious and industrial metal, offers higher return potential during economic expansion cycles.
There is no one-size-fits-all formula. However, most experts converge around three broad principles:
Keep equities as the core holding
Use gold as a hedge and stabiliser
Add silver selectively for tactical growth
For investors with moderate risk appetite, a 60–70 percent allocation to equities and 25–30 percent to precious metals appears to be the broadly recommended framework at present.
Disciplined allocation and staggered investing — rather than timing the market — remain the keys to building long-term wealth.
(By arrangement with livemint.com)
