# Investment options

There are a wide variety of investment opportunities available from equity, debt and gold mutual funds to stocks, to government backed schemes like EPF/VPF/PPF to other common choices like FDs/RDs. Some may even invest in chit funds, real estate, apartments or businesses. So what do you invest in?

## What to pick, and why?

For most people that are salaried, money comes at regular intervals at the beginning/end of each month. That necessitates a few conditions for the choice of investment - it needs to be investable in small amounts each month, and it needs to be fairly liquid and hopefully reasonably tax efficient.

While a detailed explanation is beyond the scope of this wiki, equity and debt mutual funds fit the bill for most people. Both can be invested in fixed amounts each month (Systematic Investment Plan) and are liquid enough such that you can get your money back within a couple of business days when you need them.

Since equities can be volatile (meaning its value changes rather rapidly - 15% or more upswing or down swing in the value are not uncommon within a year), you should hold some debt mutual funds so that a certain amount of liquid money is always available (without having to sell off the equity when its at a low _price_).&#x20;

### Invest regularly: The SIP

Saving and investing a certain amount regularly (say monthly) ensures that you do not make substantial purchases at peaks in the market - this strategy is called Dollar Cost Averaging (DCA). DCA also ensures that you do not engage in market timing - which is a fool’s errand. Do note that buying more during the dips is perfectly acceptable so long as you do not abandon your regular buying plan. This is where SIPs can help because it automates the DCA strategy.

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For a better read on how to get yourself up to speed on the basics of investing you may want to read this 4 part post: [Part 1](https://www.reddit.com/r/IndiaInvestments/comments/9ltgni/for_someone_who_is_absolutely_at_level_zero_in/), [Part 2](https://www.reddit.com/r/IndiaInvestments/comments/9lusap/for_someone_who_is_absolutely_at_level_zero_in/), [Part 3](https://www.reddit.com/r/IndiaInvestments/comments/9lyeye/for_someone_who_is_absolutely_at_level_zero_in/) and [Part 4](https://www.reddit.com/r/IndiaInvestments/comments/9lzdcb/for_someone_who_is_absolutely_at_level_zero_in/).
{% endhint %}

## Asset allocation

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An asset allocation is simply what assets are in your FIRE portfolio and what % they make up of the total portfolio.
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Decide on an asset allocation strategy and stick with it. Your asset allocation strategy is closely linked to your planned withdrawal strategy (more on this later).

A _sample_ simplified asset allocation strategy could look like this:

* 70% Equity (Diversified Global Stock Index Fund / S\&P500 / Nifty 500 etc.)
* 20% Debt (Diversified Global Bond Index Fund / Indian Gilt / Liquid / Ultra Short Term funds etc.)
* 10% Cash (FD etc.)

### Geographic diversification

While access to international markets has been poor for Indian investors, this is slowly changing with some brokers like Interactive Brokers and Vested now allowing Indians to purchase international index funds. An ideal portfolio should be diversified not just asset-wise but also geographically. An index fund that covers the whole world (usually called a total stock or bond market index fund) is ideal.

Please refer to [/r/IndiaInvestments](https://www.reddit.com/r/IndiaInvestments) for advice on portfolio construction.

