Investing in multiple assets for optimal portfolio performance
It may not be possible to predict which asset class would deliver at any point in time. That is precisely why asset allocation becomes crucial.
- Jul 9, 2026,
- Updated Jul 9, 2026 12:47 PM IST
Author: Sugandh Goenka of Staywealthy Investment Services Pvt Ltd
Taking a suitable decision on the right avenues for deploying money has been challenging for most investors. Asset classes have exhibited contrasting trends in their movements.
The domestic equity markets have still not settled into a steady mode even after two years of volatility following challenges on the external and domestic fronts as penal tariffs, wars, energy price escalations as well as supply disruptions, adverse currency movements, FPI outflows etc. hurting the benchmarks. However, valuations are comfortable now after the corrective phase and India’s long-term growth story is still intact even as corporate earnings and credit growth expand.
Gold’s massive rally over the past few years has halted as inflationary fears, rate hike action by the US Federal Reserve and a strengthening dollar could curb any upswing for now. The yellow metal is still important as a hedging instrument.
Bonds have generally held steady, even though the war period saw a spike in g-sec yields and subsequent retreat.
Combining asset classes with an allocation pattern suited to investor requirements can help diversify the portfolio, reduce risks and deliver optimal performance over the long term.
Making multi-asset investing requires taking a smart approach.
Asset classes diverge
Different asset classes fire at various points in time as their dynamics differ.
In the 18 calendar years from 2008 to 2025, equities (BSE Sensex TRI) have outperformed during seven of those years. Bonds (CRISIL Composite Bond Fund Index) have been the leaders in two years. Gold (MCX Prices) has topped the performance chart in as many as nine years.
It may not be possible to predict which asset class would deliver at any point in time. That is precisely why asset allocation becomes crucial. Asset allocation helps make the most of every asset class by remaining invested across market conditions.
Equities are the prime wealth creators in the portfolio. But they go through their own phases of growth, consolidation and correction based on macros, business and economic cycles. Debt gives stability to the portfolio with steady and consistent returns across time periods.
Despite its heady run in the past few years, gold is more of a hedge against inflation and currency movements. It also protects the portfolio during global uncertainty and geopolitical tensions.
Mixing them right
For selecting equities, a top-down approach by taking a macro view is necessary. This must be followed by a domestic view. Based on the prevailing market/business cycle and valuations, opportunities across sectors, themes and market caps are to be identified.
In the case of debt investments, opportunities are to be explored in duration (depending on the interest rate cycle) and accrual strategies across the credit spectrum.
Gold’s movements are governed by a host of factors including real interest rates, safe haven demand, US dollar movements, US fiscal balance, g-sec yields in the US, consumer inflation, growth outlook and so on.
Silver moves based on industrial demand, precious metal cycles, gold-silver ratio, economic cycle and such other factors.
For retail investors, taking the fund of funds route for multi asset active allocation is a well-suited route for long-term wealth creation. The fund manager would decide the right set of schemes suited to specific market conditions and cycles, smartly juggle allocations across asset classes based on internal models and rebalance the portfolio periodically.
Author: Sugandh Goenka of Staywealthy Investment Services Pvt Ltd
Taking a suitable decision on the right avenues for deploying money has been challenging for most investors. Asset classes have exhibited contrasting trends in their movements.
The domestic equity markets have still not settled into a steady mode even after two years of volatility following challenges on the external and domestic fronts as penal tariffs, wars, energy price escalations as well as supply disruptions, adverse currency movements, FPI outflows etc. hurting the benchmarks. However, valuations are comfortable now after the corrective phase and India’s long-term growth story is still intact even as corporate earnings and credit growth expand.
Gold’s massive rally over the past few years has halted as inflationary fears, rate hike action by the US Federal Reserve and a strengthening dollar could curb any upswing for now. The yellow metal is still important as a hedging instrument.
Bonds have generally held steady, even though the war period saw a spike in g-sec yields and subsequent retreat.
Combining asset classes with an allocation pattern suited to investor requirements can help diversify the portfolio, reduce risks and deliver optimal performance over the long term.
Making multi-asset investing requires taking a smart approach.
Asset classes diverge
Different asset classes fire at various points in time as their dynamics differ.
In the 18 calendar years from 2008 to 2025, equities (BSE Sensex TRI) have outperformed during seven of those years. Bonds (CRISIL Composite Bond Fund Index) have been the leaders in two years. Gold (MCX Prices) has topped the performance chart in as many as nine years.
It may not be possible to predict which asset class would deliver at any point in time. That is precisely why asset allocation becomes crucial. Asset allocation helps make the most of every asset class by remaining invested across market conditions.
Equities are the prime wealth creators in the portfolio. But they go through their own phases of growth, consolidation and correction based on macros, business and economic cycles. Debt gives stability to the portfolio with steady and consistent returns across time periods.
Despite its heady run in the past few years, gold is more of a hedge against inflation and currency movements. It also protects the portfolio during global uncertainty and geopolitical tensions.
Mixing them right
For selecting equities, a top-down approach by taking a macro view is necessary. This must be followed by a domestic view. Based on the prevailing market/business cycle and valuations, opportunities across sectors, themes and market caps are to be identified.
In the case of debt investments, opportunities are to be explored in duration (depending on the interest rate cycle) and accrual strategies across the credit spectrum.
Gold’s movements are governed by a host of factors including real interest rates, safe haven demand, US dollar movements, US fiscal balance, g-sec yields in the US, consumer inflation, growth outlook and so on.
Silver moves based on industrial demand, precious metal cycles, gold-silver ratio, economic cycle and such other factors.
For retail investors, taking the fund of funds route for multi asset active allocation is a well-suited route for long-term wealth creation. The fund manager would decide the right set of schemes suited to specific market conditions and cycles, smartly juggle allocations across asset classes based on internal models and rebalance the portfolio periodically.