Curate your portfolio like the Great Indian Thali

WHEN TO REBALANCE SCHEDULED REBALANCING: Schedule a reminder for reviewing and adjusting your portfolio once or twice a year. DEVIATION-BASED REBALANCING: You can also watch for major shifts in your portfolio, like a 5–10 per cent change from your target allocation, to revisit your allocations. For instance, if equities were supposed to comprise 60 per cent but now make up 70 per cent of your portfolio, thanks to market growth, it might be a good time to hit reset. LIFE EVENTS: Big milestones like getting married, buying a house, having kids, or planning retirement can shake up your financial priorities.

- Radhika Gupta & Niranjan Avasthi

Think of asset allocation like your diet. Dal chawal is an all-weather staple across India; a low-key hero that never lets you down. As a child, whenever I fell sick, my mother would cook up a comforting plate of dal chawal to ensure I stayed nourished and recovered sooner. It has remained at the core of my diet to this day. Similarly, your financial diet will also have a core portfolio. This is the dal chawal of your investments; something that has stood the test of time. Your core portfolio should ideally be built of long-term diversified funds like multicap funds, or large-cap and mid-cap index funds, or broad-based index funds. These are generally simple, timeless ideas that fit for all seasons.

Then comes your satellite portfolio—the chutney and dessert that add excitement and zest to the meal. During the course of your life, you might occasionally embark on exciting adventures like going for a scuba dive or attempting a triathlon. The satellite is like this little adventure: a smaller, dynamic portion of your investments to complement the stability of your core. These comprise the bold, opportunistic assets—sector-specific mutual funds and international stocks—that have the potential to offer higher returns but also come with greater volatility. And while a chutney can pack a punch, it is meant to be consumed in moderation and cannot comprise the bulk of your meal. The aggregate of these investments should ideally make up less than 20 per cent of your portfolio.