Diversifying one’s investment portfolio is a key strategy to manage risk and optimise returns. While one can think that the universe of investable asset classes available today is vast and offers a variety of options to investors, in essence, there are only two things on any diligent investor’s mind while evaluating a potential investment opportunity.

i) Return of capital or capital protection (Safety FIRST)

ii) Return on capital (Risk-adjusted returns NEXT)

Most investment products can be placed on a continuum between the stability of fixed income (Government securities, bank FDs, bonds, debt mutual funds etc) and the volatility of equities (including direct stocks, equity mutual funds, ETFs etc).