The Universal Six-Step Process

Every well-built portfolio follows the same six steps. The asset choices and amounts vary by profile, but the process is identical.

Step 1 — Establish your foundation. Before any equity, ensure: 3-6 months of expenses in liquid form (emergency fund), high-cost debt (credit cards, personal loans) extinguished, term insurance equal to 10-20x annual income, basic health insurance for family.

Step 2 — Map your goals to time horizons. Each goal (retirement, child's education, house down payment, vacations, parent care) has a target amount, a target year, and a tolerance for uncertainty. Map them out on a horizon-vs-amount grid.

Step 3 — Determine total wealth and risk capacity. Compute total wealth including human capital. Determine ability to bear risk (income stability, time horizon) and willingness to bear risk (psychological tolerance for drawdowns). Risk capacity is the minimum of the two.

Step 4 — Set Asset Allocation — definition">Strategic Asset Allocation. Pick allocation weights across major asset classes — Indian equity, international equity, fixed income, gold, real estate (REITs), alternatives if applicable. The split anchors on time horizon and risk capacity.

Step 5 — Implement. Choose specific instruments (mutual funds, ETFs, FoFs, AIFs, PMS) within each asset class. Apply the 14-step due-diligence checklist.

Step 6 — Set rules and review process. Pre-commit to rebalancing thresholds (e.g. 5pp drift triggers rebalance). Schedule monthly / quarterly / annual review cadence. Document the plan.

Now apply this — start with your foundation →