Choosing the right investment strategy can sometimes feel a bit overwhelming. It’s like walking into a restaurant with a menu of unfamiliar 1,000 dishes to choose from, or planning a trip where you have to choose every activity yourself.
Every investor is different - some want high returns while some seek stability. But with hundreds of mutual funds and asset classes, understanding the right portfolio mix can be exhausting. That’s where Model Portfolios come in.
What is a Model Portfolio?
It is a pre-selected investment mix composed of a varying proportion of equity, debt, and gold funds based on your risk appetite & time frame.
In the restaurant context, it would be like a Thali - a balanced pre decided meal as opposed to picking every ingredient yourself (à la carte). A model portfolio works in a similar way where you can sit back & relax while your investments are aligned with your plan.
Common Types of Model Portfolios
- Conservative - Heavy on debt, with some exposure to Equity & Gold
- Balanced - A mix of equity, debt & gold
- Aggressive - A high exposure to equity with some debt & gold for protection
Why consider a Model portfolio?
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Built in diversification: If market volatility hurts stock prices but boosts gold, the gains from gold will help cushion your portfolio from losses.
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Regular Rebalancing: Say equity rallies for a year and the portfolio drifts from 60% equity to 80%. Future allocations will increase debt & keep risk in check.
How to pick the right basket?
It is dependent on the time horizon and risk appetite.
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Short Term Goal (A trip next year): Avoid heavy equity, even if you’re aggressive as short-term markets can be choppy.
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Long Term Goals (Child’s wedding that’s 10 years away): Even conservative investors may need some equity to beat inflation & to grow wealth.
As your next steps:
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Understand what is your risk appetite (simple questionnaires exist if you’re unsure)
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Note down your investment horizon
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Start investing in a basket. If you’re unsure where to start, log on to Upstox & find the “Ready made basket” suited for you.
Have you tried model portfolios before? Share your experience or drop your questions below—we’d love to hear your take!