It is of importance for the investor to select specific assets to be included in the portfolio. It is here that the investor or manager attempts to construct an optimal or efficient portfolio. Which would give the expected return for a given level of risk, or the lowest risk for a given expected return.
The asset classes he can choose from are:
Fixed income securities (which would include RBI bonds and bank deposits)
Debt instruments
Art objects
Rare stamps
The investor would ideally have all the above in his investment portfolio. This would then require the investor to rebalance the various components of his overall portfolio from time to time, depending on his objectives with respect to this portfolio. These objectives may be time based or asset price based or a combination of both.
