Congrats! With the All Weather Investing smallcase in your kitty, you’re now on your way to building long-term wealth irrespective of how the markets behave.
If you haven’t invested in AWI yet, read this article to understand why you should.
The benefit of AWI is that it is a passive investing strategy that diversifies your portfolio across equity, fixed income and gold. You don’t need to actively monitor the movements of the equity markets or the interest rate scenario or fluctuations in the price of gold. The smallcase constituents change as per the prevailing economic conditions to give you the most efficient exposure all the time.
But while it is good for you to sit back and let your money invested in AWI work for itself, it is not advisable to completely forget about it either. Though actively managing the smallcase isn’t required, there are some actions that you need to dutifully take.
Start an SIP
Investments should never be a one-time thing. We earn an income periodically, we pay bills periodically, we incur recurring expenses periodically, which is why our investments should also be done periodically.
An SIP or a systematic investment plan allows you to invest every month and benefit from buying at different levels of the market. When one asset class is relatively cheaper, you invest more in it. And vice versa. This way, you are able to invest efficiently without attempting to time the market.
SIPs are also important in helping you form the habit of investing. Once you start an SIP in a smallcase, you receive a notification to invest on the predetermined date. This way, you don’t have to remember to invest and the automated reminder keeps you on track.
Rebalance the smallcase
The AWI smallcase has a quarterly rebalance schedule. This means that the smallcase constituents are reviewed every 3 months and changes are made, if necessary. For example, if the equity markets have been running up consistently, then the smallcase could take a cautious stand by reducing exposure to equity and increasing allocation to gold and debt.
Investors in this smallcase would receive notifications about the rebalance update, which should be carried out to stay aligned with the all weather investing strategy.
This is how the All Weather Investing smallcase should be maintained after you have invested in it. Read about the benefits of investing in the AWI smallcase, if you haven’t invested already.
Invest in All Weather Investing
Start investing for free