How To Guide

How to Build the Perfect Investment Portfolio

August 25, 2020

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The perfect portfolio of investments is something every investor dreams of, but it isn’t as out of your reach as you may think it is. A model portfolio can in fact be built, you simply need to study and understand how to build an ideal investment portfolio for yourself. We at Cube Wealth have, of course, simplified this process with our new perfect portfolio product. You can simply download the Cube Wealth App

Not big on reading? You can also watch this short episode of The Cube Wealth Show – How To Make The Perfect Portfolio

What Makes The Perfect Investment Portfolio?

Most investors jump into their investment journey with very little information. We know a little about mutual funds, we understand that they are good for us in the long run but we don’t really understand “How?”.  That’s why in this blog we will help you understand what a perfect portfolio looks like and how you can get your investment portfolio in perfect order. The ideal investment portfolio, of course, differs from person to person. We all have our own specific investment goals and risk appetite. So, it is no surprise that my portfolio would be different from your portfolio but, there are some basic rules that any good investment portfolio will follow. The type of mutual funds you buy, the way you invest in gold and your overall portfolio allocation will differ not only when compared to others but, even when compared to what will be ideal for you a few decades from now.

Creating The Perfect Investment Portfolio

There are some key questions you need to ask yourself when you’re setting up the perfect portfolio. You must not rely on the information obtained from this blog alone of course. You must Consult a Cube Wealth Coach, though having pondered over the following questions will put you in a better position to have a more fruitful discussion.

  1. How does my portfolio complement my short term, medium term & long term goals?
  2. Am I prepared financially for possible emergencies?
  3. Will this portfolio allocation help create long term wealth for me?

We have of course narrowed things down in such a manner that anyone using the Cube Wealth App can easily understand this. To this end we have created some buckets that serve the most crucial needs of any investor:

1) Emergency Funds Bucket

You need to have at least 6 to 12 months of living expenses saved and put aside in a liquid account that is always accessible. Something you can instantly access in case of an emergency. This could be a medical expense for you or someone close to you. It could be a safety fund in case there is a politically created or natural calamity etc.

2) Protection Fund Bucket

This bucket is as the name suggests to protect yourself and your family from the most commons threats. This includes things like term life insurance, health insurance, home insurance, and if you’re a frequent traveler – overseas travel insurance.

3) Short Term Fund Bucket

We all have foreseeable expenses 2-3 years away. A new car we might want to buy at some point, an educational course we might want to do, or an experiential class such as scuba diving or skydiving etc. No matter what your short term investment goal is, you must invest money in a manner that it is reasonably safe and yet promises to give good returns.  You can start by investing in mutual funds that will give you the benefits of tax-saving as well. It is recommended that you talk to a Cube Wealth Coach and get more insight around how to go about preparing for such a goal.

4) Medium Term Fund Basket

This is for expenses that you may see but they are at least 3-5 years away. This could be for your college fee, a big down payment or even a fancy euro trip. Here you can take a few more risks and consult a wealth coach to get some unique benefits. A combination of equity and tax saving is a possibility here. You just need a top money manager to crunch the numbers for you.

5) Long Term Fund Basket

This focuses on the goals you have set for 5 – 10 years in the future. You’re not really sure when you’ll buy that new apartment or villa, you’re not sure which college you’ll have to send your child etc but you’re sure you will have these expenses in the future. Cube Wealth can help you prepare for these expenses the right way. This is the kind of goal for which you will invest in a long term fund. You will then no longer have to worry about the short term returns of such an investment bucket, rather focus on what will work best for you in the long run.

How To Build The Perfect Portfolio

If you’re seeking broad advice before consulting a wealth coach the following steps will help you understand what all a wealth coach will do in order to help you build the perfect portfolio.

  • Checking The Risk Factor: It is important to understand your risk appetite based on the buckets discussed above.

  • Diversifying Your Portfolio: While we all know we should keep our eggs in different baskets, a wealth coach helps identify which eggs are the best for our baskets.

  • Assessing Portfolio Balance: Assessing if your portfolio is balanced as per your goals is crucial for building a good investment portfolio.

Cube Wealth takes a balanced and patient approach to building the perfect portfolio. You can download the Cube Wealth App for free and check how close you are to the perfect portfolio in under a minute.

You can also use our free mutual funds analysis tool to check the status of your current financial portfolio. This will help you understand how far you might be from a perfect portfolio.

Try Our Free MF Analysis Tool

Want to add a few investments from outside India to your perfect portfolio? Read our articles on Investing in the US Stock Market from India as well as Investing in International Markets from India. And if that ain’t your cup of tea, we do have this super interesting story detailing the best long term investment options.

Gradually Build A Perfect Portfolio

Gradually Build Portfolio - Step 1
Gradually Build Portfolio - Step 3
Gradually Build Portfolio - Step 5

Rishabh P Nair
Rishabh P Nair is the Head Of Brand Content at Cube Wealth. Rishabh has been weaving stories for over 10 years and prides himself on building brands with a strong identity.

4 Reasons To Try Our Powerful Investment App!

Schedule a call based on your convenience. And get an expert to help you invest.

  • High Quality Mutual Funds
  • Top Notch Stock Advisory
  • Expert Financial Advisors
  • Alternative Investments

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