Portfolio Construction Guide: Building Your Mutual Fund Portfolio
Step-by-step guide to building a diversified mutual fund portfolio with core-satellite approach and asset allocation strategies.
Portfolio Construction Guide: Building Your Mutual Fund Portfolio
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Building a well-diversified mutual fund portfolio is crucial for long-term wealth creation. This comprehensive guide covers the core-satellite approach, asset allocation strategies, and practical steps to construct your ideal portfolio based on your risk profile and financial goals.
Understanding Portfolio Construction
Portfolio construction involves selecting the right mix of mutual funds across different categories to achieve your financial goals while managing risk effectively.
Core-Satellite Approach
The core-satellite approach involves building a stable core portfolio (70-80%) with index funds and large-cap funds, and adding satellite funds (20-30%) for higher returns.
Conclusion
Building a successful mutual fund portfolio requires careful planning, diversification, and regular monitoring. Start with the core-satellite approach and adjust based on your risk tolerance and market conditions.
Frequently Asked Questions
How many mutual funds should I have in my portfolio?
Ideally, 4-6 funds across different categories. Too many funds can lead to over-diversification and reduced returns.
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