Lernovate Ecommerce WEEK 3 Task (Friday)

Submitted By - Sanket Dhole Date: 16/07/2021

Learnovate e-commerce

Suppose it may be try out a number of portfolio combinations.

look at the following combinations which will give you an idea
of how you can allocate investment based on your risks and
investment horizon

There are several ways you can go about choosing the assets
and securities to fulfill your asset allocation strategy
(Remember to analyze the quality and potential of each asset
you invest in):

Stock – Choose stocks that satisfy the level of risk you want to
carry in the equity portion of your portfolio; sector, market cap,
and stock type are factors to consider. Analyze the companies
using stock screeners to shortlist potential picks, then carry out
more in-depth analysis on each potential purchase to
determine its opportunities and risks going forward. This is the
most work-intensive means of adding securities to your
portfolio, and requires you to regularly monitor price changes
in your holdings and stay current on company and industry
news.
Bond – When choosing bonds, there are several factors to
consider including the coupon, maturity, the bond type, and
the credit rating, as well as the general interest-rate
environment.

Mutual Funds – Mutual funds are available for a wide range of

asset classes and allow you to hold stocks and bonds that
are professionally researched and picked by fund managers. Of
course, fund managers charge a fee for their services, which
will detract from your returns. Index funds present another
choice; they tend to have lower fees because they mirror an
established index and are thus passively managed.
Exchange-Traded Funds (ETFs) – If you prefer not to invest with
mutual funds, ETFs can be a viable alternative. ETFs are
essentially mutual funds that trade like stocks. They're similar
to mutual funds in that they represent a large basket of stocks,
usually grouped by sector, capitalization, country, and the like.
But they differ in that they're not actively managed, but instead
track a chosen index or another basket of stocks. Because
they're passively managed, ETFs offer cost savings over mutual
funds while providing diversification. ETFs also cover a wide
range of asset classes and can be useful for rounding out your
portfolio. Suppose your parents are to retire and you want to
build up a corpus for their retirement then how of corpus is
required at their retirement to get continues flow of cash of
their monthly expenses requirement at 7% rate of return and 5
% inflation rate? If your current household expense is Rs
40,000 and if you are 30 years away from your retirement, you
may need a retirement corpus of Rs 5.18 crore. The inflation is
assumed to be 6% during the accumulation phase and 5%
during post retirement phase. The example is based on a
conservative rate of return of 7% on the retirement corpus
during the post retirement phase. If your investment during the
accumulation phase generates an annual return of 10% you
will need to invest Rs 25,111 per month for 30 years to build a
corpus of Rs 5.18 crore.