Investing in Gilt Funds as compared to FD
Over the last few years, I have internalised the importance of Asset Allocation in planning the personal finances, especially for long term goals such as retirement. Deciding Asset Allocation There are many formulas for asset allocation that you will find floating around, but what I have realised is that your ideal asset allocation has much more to do with your your behavioural mindset than anything else. For example, it is often said that if you are young you should have most of your investible surplus invested in equities. But, if you do that without fully understanding the associated risks and the patience needed to achieve optimal returns, you may end up doing even worse than fixed deposits. That's because we, as humans, are primarily driven by fear and greed when it comes to investments. This leads us to buy equities when they are expensive (since there is a lot of hype) and sell them when they are cheap (since there is a lot of gloom), the exact opposite of what we need to b...