Boosting your financial immunity plays a significant role in today’s era. While many are aware of the 50:30:20 formula of investment, a new formula of 12:20:80 is said to be helping in boosting financial immunity.
According to a study 12:20:80 formula where 12 months of expenses; 20 percent investment in gold and 80 percent in equity will help immune the finance. It has three steps as follows:
Step 1: The safe money
The first step to any investment is a contingency plan i.e to have 12 months of emergency funds which constitutes the first criteria of the formula.
Step 2: Invest in gold
The second step constitutes 20 percent strategic investment in gold funds. After setting aside an emergency fund, investors need to make some provisions to lower downside risks for their investment against volatility and inflation. Gold not only helps investors get the much-needed diversification but is also beneficial due to gold’s risk-reducing, return-enhancing characteristics.
Step 3: Invest in Equity
The third and final step stands for 80 percent investment in a diversified equity portfolio that has the potential to help investors reach their financial goals over the long term.
Investing can be tricky and confusing if there is a lack of knowledge of stock markets and other financial aspects. The BSE Institute Ltd. offers various courses related to finance to help an individual learn about the financial. To know more visit- https://www.bsebti.com/