Your ideal portfolio mix changes as you age. In your 20s, go aggressive with equity. Approaching retirement? Shift to safety. This guide shows the perfect blend of equity, debt, gold & international funds for every life stage.
| Age Group | Equity % | Expected CAGR | Max Drawdown | Recovery Time | Best For |
|---|---|---|---|---|---|
| 20–30 | 80% | 13–16% | -35 to -45% | 1.5–2.5 yrs | Long-term growth |
| 30–40 | 65% | 11–14% | -25 to -35% | 1–2 yrs | Growth + stability |
| 40–50 | 50% | 9–12% | -18 to -25% | 8–14 months | Moderate growth |
| 50–60 | 35% | 7–10% | -10 to -18% | 4–8 months | Capital safety |
| 60+ | 25% | 6–8% | -6 to -12% | 2–4 months | Income + preservation |
Once a year (Jan or Apr), check if any asset class has drifted more than 5% from target. Sell the overweight, buy the underweight. Simple and effective.
Rebalance whenever any asset drifts beyond a 10% band from target. If equity target is 65% and it hits 75% after a bull run, trim it back. Set alerts to track.
Instead of selling winners, direct new SIP investments to underweight assets. This avoids capital gains tax and still brings your portfolio back to target over time.
A classic starting point: subtract your age from 100 to get your equity %. Age 30 → 70% equity. It's a rough guide — adjust for your risk tolerance and financial goals.
Gold has delivered 10%+ CAGR over 20 years in INR terms. It's your portfolio's insurance policy — it rises when equity falls. 5-15% allocation is ideal at any age.
5-10% in US/global funds provides rupee depreciation protection. When INR weakens (3-5% annually vs USD), your international holdings automatically gain in value.
Debt funds deliver 7-9% with near-zero volatility. In a 2020-type crash, your debt allocation is what lets you sleep at night while equity recovers.
Markets trigger emotions. Rebalancing is the antidote — it mechanically forces you to buy low and sell high. Do it annually regardless of market conditions.
You might feel bold enough for 90% equity, but if you need the money in 5 years, your capacity doesn't support it. Always align allocation with your nearest financial goal.
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