Assets Allocation Basis Risk Profile

When it comes to investment you should not be just going to invest your money anywhere just basis the returns. The investment should be made after analyzing the risk appetite of an investor. So, first let’s understand the concept of risk profile.

What is risk profile?

Every individual has a different aspect about investment they made. It is based on how much risk they want to take in their investment method. Risk profile is a scientific approach followed by the financial planner. It will help to evaluate and analyze the ability of an individual to take risk while investing. Risk profile is one of the important things when it comes to investments. Basis the risk profile a financial planner will be able to find the right set of investment mix. Risk profile usually undertaken to mitigate the potential risks involved in an investment. It also helps in judging, whether they are in sync with the investor’s requirements.

Risk Appetite

In general, everyone doesn’t want to risk their money invested to the same extent. People comes from different backgrounds, with different set of experiences basis that everyone looks forward for a different level of risk. Rupeemakers as a financial planner do analyze the risk profile of every customer basis a scientific approach. Then it gets analyzed by a team of financial experts and then only we come to investment recommendations. Every investor gets a different set of investment portfolio basis their risk appetite. This approach helps in understanding the risk appetite of a customer.

What is Assets Allocation?

Assets allocation is investing in different set of available options like Equity and Debt. Asset allocation is entirely based on the risk profile of an individual. When it comes to investment various options are available like asset with higher returns and high risk and vice versa. Where high risk means chances of losing the capital invested are high. Risk and returns both are co-related. If an individual is looking forward for higher returns he needs to expose his investment to higher risk as well.

Rupeemakers makes this decision quite easy for you. We follow a systematic analysis approach to find the exact risk profile of an individual. Post that we provide the investment recommendations to an investor.

Example of Assets Allocation

Let’s understand this with the help of an example. If a risk profile of a customer suggests that he follow a conservative approach in his investment. It means that he can only expose 20% capital towards risk side. Hence, Rupeemakers being a financial planner assists you with recommendations where your portfolio will be exposed to only 20% risk. The rest 80% will be in secured investments where the returns will be lower and steady.

The decision regarding assets allocation will be done basis the risk profile only.