Risk
Each category of mutual fund has a different risk vs return profile. For example, equity mutual fund provides a higher return than debt mutual fund but the risk is also high. Risk is in terms of volatile returns.
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An honest risk-assessment
Think about how much risk you are willing to tolerate:
- If you are looking for quicker returns, you may prefer a more volatile portfolio of individual stocks, ETFs, or high-risk mutual funds.
- However, if you want to build your portfolio for retirement or savings,...
Smart retirement planning boils down to a few simple truths.
- Time is on your side. The earlier you start saving money, the more time you give compounding to work for you.
- Take risks when you're young. Although stocks are three times more volatile than government bonds, it earns nearly twice the average annual return.
Number of stocks in a portfolio
If you want optimum returns on your portfolio, you need to have a maximum of 3-4 stocks (with the ratio 40:30:30) but it will have a higher risk.
If you want good returns with little risk then you need to have 6-8 stocks.
But if you want to take a minimum risk and be satisfied with ...
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