1. ASSET CLASSES
AND
MARKET SEGMENTS
Presentors:-
Arushi Gupta
Divya Malik
Prabhjot Singh
Robin Gupta
Sachin Sharma

2. Asset Classes
The process of allocating money between equity stocks
and fixed income securities such as, bonds, and fixed
deposits
It’s a portfolio building
It’s a process of optimisation of the return and risk of the
investor
Diversifying the money among different types of
investment categories

3. Different Asset Classes
Equity
(Stocks)
Fixed Income
Real Estate
(Bonds)
Asset
Classes
Cash and
Commodities Cash
Equivalents

4. “A GOOD INVESTOR DOES NOT PUT
ALL HIS EGGS IN ONE BASKET”

5. Asset Allocation
An investment strategy that attempts to balance risk
versus reward by adjusting the percentage of each in an
investment portfolio according to the investors risk
tolerance, goals and investment time frame

6. Why Resort to Asset Allocation?
To diversify the risk
Since one does not know before hand what economic
situation would be tomorrow

7. How To Do?
Divide the investment between high and low risk and
minimise the risk
Based on long term and short term goals
Before making investment make sure level of return,
risk, liquidity, transaction cost

8. Three important factors for allocation of assets:-
Risk tolerance
Investment objectives
Time horizon

9. State in Life
A younger person, having a safe livelihood and few
dependents, can take more risk while choosing his
portfolio
If he does not need money for 25 years and is
comfortable with the ups and downs of the stock
market, he may consider an asset allocation on higher
side in stocks. Definitely not 100%

10. Principle
Lower the age, higher the risk; and higher the age,
lower the risk the investor can take

11. Financial Objective Method
Status age < 30 years 31-45 46-55 56-60
Single Carefree Building Adding to Planning for
wealth wealth carefree
retirement
Married, Top priority Building Planning Planning for
no kids is property wealth retirement carefree
retirement
Married, Top priority Planning Planning for Planning for
2 kids is property child’s child’s higher child’s future
education education

12. Time Horizon
If it is a long time goal, pursue higher return by more
risky portfolio
Longer the investment period, lower the risk
Shorter the investment period, higher the risk

13. Diversification in Bull and Bear
Market

14. Potential to Reduce Risk or Increase
Return

15. Current Status
Emerging debt markets
Continued sluggish growth in US economy will lead to
volatility across asset classes, closely related to Dollar
weakness and strength
Gold funds won hands down with domestic investors in
them pocketing 32 per cent return in 2011
Asset such as equities may stage a revival