Asset allocation explained: Why equities, debt and gold should all have a place in your portfolio? Expert explains — SkimNews
SkimNews Take
Reducing equity to 20-25% at retirement trades one risk (market drawdowns) for others — inflation eroding purchasing power across a 25-30 year retirement horizon, and bond reinvestment risk as rates shift.
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- Aditya Agarwal, CFA and CIO at Avisa Wealth Creators, called asset allocation one of the most important drivers of long-term investment outcomes, saying it often has a greater impact than individual security or fund selection.
- Agarwal recommended specific age-based splits: 80% equity, 10% debt and 10% gold for a 25-year-old; 60% equity, 30% debt and 10% gold for a 45-year-old; and 20-25% equity, 60-70% debt and 5-10% gold for a 65-year-old retiree.
- The article assigns each asset class a distinct role: equities drive long-term wealth creation and beat inflation, debt offers stability and cushions portfolios during volatility, and gold hedges against inflation, currency weakness and geopolitical risk.
- Agarwal advised that portfolios should be reviewed annually and rebalanced periodically to stay aligned with long-term financial goals rather than short-term market movements.
- The piece frames the strategy as less about predicting market moves and more about preparing for a constructive financial future by balancing growth, stability and protection, and urges investors to consult a certified financial advisor.
Why it matters: Indian retail investors who have watched the Nifty50 underperform over the past year get a concrete rulebook: 80% equity exposure early on for compounding, gliding down to 20-25% by age 65, with the remainder in debt and gold — meaning the rebalancing cadence Agarwal calls for directly addresses the single-asset concentration risk that punished equity-only portfolios recently.
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