Build Wealth That Survives Cycles With Ruthless Asset Allocation Discipline

Hold equity, debt and gold in balance and rebalance when valuations stretch.

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The stock market tells a story of thrill and despair in equal measure. From the euphoric climb of the Sensex before the global financial crisis to the panic of March 2020 and the relief of recovery thereafter, cycles have always shaped investor fortunes. Over the last twenty-five years, the index has climbed from under 5,000 to over 80,000. The journey has been far from smooth. Every spell of strong gains saw sharp drawdowns that tested conviction. What set apart those who stayed from those who quit early wasn't luck, but diversified allocation.

Why Asset Allocation Matters

Decades of research confirm that asset allocation outweighs stock picking or market timing in shaping long-term outcomes. The seminal study by Brinston, Singer and Beebower (1991) found that over 91 percent of a portfolio's performance can be explained by allocation decisions rather than the choice of individual securities. For Indian investors, this insight is particularly relevant. The tendency to go all-in on equities when markets rise and retreat into cash or fixed deposits during downturns has often led to buying high and selling low.