Last Update:27 October 2024 09:31 IST

While planning one’s investment portfolio, inspiration can be taken from the Laxmi pooja thali, which contains various symbolic elements, each of which plays a vital role in the pooja ritual.

Like various elements of pooja thali, multi-asset fund also consists of various elements like equity, debt, gold along with cash which makes it a complete menu.

By Suresh Soni:

If there is one festival celebrated by the largest number of Indians, it is Diwali, the festival of lights. It is a time of celebration and joy where families reunite and share joy, meet long-lost relatives, and friends party together. We clean and decorate our homes and wear new traditional clothes. At the center of the festivities is Laxmi pooja, where we worship Goddess Lakshmi to bring wealth and prosperity. While worshiping Goddess Lakshmi, we understand the importance of Karma. To achieve wealth, we must also work hard and invest wisely.

While planning one’s investment portfolio, inspiration can be taken from the Laxmi pooja thali, which contains various symbolic elements, each of which plays a vital role in the pooja ritual. Just as each component of the Pooja thali has a different purpose in the completion of the ritual, the various asset classes in a multi-asset fund come together to create a well-rounded investment portfolio. Like various elements of pooja thali, multi-asset fund also consists of various elements like equity, debt, gold along with cash which makes it a complete menu.

Diyas (Lamps): Light of Equality

The first and most important component of the Pooja thali is the diya. Diya symbolizes the dissipation of darkness and brings hope and clarity. It is the guiding light that illuminates the entire ritual. Equity investments play a similar role in the context of a multi-asset fund. Stocks are often the growth engine of a portfolio and provide long-term capital appreciation.

Just as Diya lights up the room, stocks help illuminate the growth path by offering higher returns over the long term. Although they carry a certain level of risk due to market fluctuations, their wealth creation potential makes them indispensable in a balanced portfolio. Numerous studies have shown that equities in India always provide a positive investor experience over the long term and are the asset class with the highest long-term returns.

Flowers: The Scent of Debt Securities

Flowers are another vital component of Laxmi pooja thali that adds to its beauty and symbolizes purity. They add scent, color and vibrancy to the ritual, enhancing the overall sensory experience and helping to make it more spiritual. Debt instruments such as bonds, bonds and government bonds play a similar role in a multi-asset fund.

A loan in a multi-wealth fund offers stability and regular income, just as flowers add beauty and serenity to a prayer ritual. Although stocks may fluctuate, debt instruments act as a buffer, ensuring that the portfolio remains balanced and protected from excessive volatility. They add a layer of security that allows investors to manage market uncertainties with more confidence through a steady stream of income that helps meet cash flow needs.

Roli/Tilak: Gold, Protective Shield

Roli or tilak, the red powder used during rituals, is placed on the forehead to symbolize good luck and protection. This sacred sign protects devotees from negative energies. In a very wealthy fund, gold serves as this symbolic shield.

Gold is often seen as a hedge against inflation and market downturns. Just like tilak, which protects and blesses, gold provides protection to your portfolio by acting as a safe haven asset in times of economic turmoil. Its ability to preserve value makes it an important ingredient for investors looking to preserve their wealth.

Recently, it seems that gold has also provided quite good returns. One of the reasons for the healthy appreciation in gold prices is that the precious metal has a variety of uses, and as per capita income increases in India and China, the world’s largest gold consumers, the demand for the yellow metal is likely to increase. .

Coin/Money: Cash Equivalents

Finally, coins or money are placed on the pooja thali to symbolize wealth, prosperity and financial abundance. They aim to invoke blessings for financial growth and stability. In the investment world, cash equivalents such as TREPS (treasury bill repurchase agreements) and treasury bills are the equivalent of these currencies.

Cash equivalents provide a safety net within the portfolio, providing stability and flexibility during periods of market volatility.

Result: A Harmonious Balance

Just like a pooja thali is incomplete without all the elements, a well-rounded portfolio requires a mix of asset classes to achieve balance and long-term success. With a combination of equity, debt, gold and cash, multi-asset funds offer investors a diversified approach to wealth creation that helps maintain the vitality and health of your mutual fund portfolio.

(The author is chief executive officer, Baroda BNP Paribas AMC)

Disclaimer: Opinions and investment tips expressed by experts are their own and are for informational purposes only and should not be construed as investment advice. Investors should consult their financial advisor before making any investment decisions.