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The longer the time horizon, the larger the effects of compounding and the bigger the appetite for risk. In their early 20s, young investors are best served with taking larger exposure to equity. Even if there is a financial crisis with equity valuations suffering, there is still ample time for the portfolio to cover up for the underperformance.


An indicative portfolio would be as follows:


  • 30% Diversified Large Cap Schemes (15% Actively Managed + 15% Index Funds)

  • 25% Actively Managed Midcap schemes

  • 15% Actively Managed small cap schemes

  • 10% gold ETF

  • 10% diversified debt fund / fixed deposits

  • 10% short-term debt funds and liquid schemes /savings bank account / current account.

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