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Milind Chitnis, using his experience with over 500 families mainly in the mass-affluent segment discusses his asset allocation strategies. He has two kinds of clients. The first kind are the ones that are very clear about their investment goals and therefore their desired outcome automatically chooses the appropriate fund. The funds are discusses and referred to by the goal they cater to, for example, retirement, education, etc. The second kind are ones that are more unsure of what their concrete investment goals are and therefore have a more broad picture of ‘wealth creation’. For these clients, gaining a full view of all their assets is essential so that their risk profile can be analysed and their portfolio can be balanced between 60-40 and 70-30.
Clients often don't relate to "debt" and "equity" terminology in asset allocation and therefore are unable to agree with conviction on any suggested asset allocation. Milind uses the terms "available" and "not available" to help them understand the implications of the asset allocation recommendation, since what most clients really want to know is how much of liquidity is being sacrificed by the asset allocation. Once the amount that is immediately accessible is quantified, clients are comfortable with putting the rest aside into long term equity allocations.
Retail investors who do not have access to quality advice should opt for asset allocation funds, in his opinion. These funds are also very useful especially during market extremes as they help clients prevent drastic calls that can go horribly wrong. Opting for model based asset allocation funds helps immensely in bringing in discipline when it is needed most - during extreme market conditions.
Very nice 👍 e
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