If you want to increase and preserve wealth, you can neither buy all stocks or houses, nor stick to bank deposits. The best way is to diversify your investments and allocate your assets well.

So how do you do a good job in asset allocation?

Let’s talk briefly about it, please see below.

How to do a good job in asset allocation?

Household assets include financial assets and non-financial assets.

Financial assets include deposits, stocks, bonds, funds, financial products, insurance, etc. Non-financial assets include houses, cars, etc.

If you want to do a good job in asset allocation and achieve steady wealth growth, I personally think that houses, insurance and index funds are more important. Let’s explain it below.

1. House In the current market situation, it is unrealistic to expect to earn money after buying a house. However, a house can provide a sense of belonging, and housing is also an anti-inflation weapon, so a house is a cost-effective value-preserving investment and can be given priority.

2. Insurance A house is a guarantee for life, and insurance is a guarantee for risks.

The correct way to apply for insurance is to put adults first and then children.

The essence of insurance is to avoid family financial risks. Adults are the breadwinners of the family. Once illness, accidents, etc. occur, problems will immediately arise in family life, so whoever is the breadwinner of the family should be insured first.

So what kind of insurance is suitable to buy? It is recommended to consider it in the order of critical illness insurance, term life insurance, accident insurance, and medical insurance. Elderly people in their 50s and 60s can buy critical illness insurance if they can buy it. If they cannot buy it or do not meet the conditions, they can buy it.

Consider cancer medical insurance or hospitalization insurance.

3. Index funds The two mainstream ways to increase wealth are real estate and equity. After the house is allocated, index funds are another best choice.

Index funds allow for long-term fixed investment, and the risk is lower than investing in individual stocks.

In the long run, the expected return of investing in high-quality index funds at undervalued points is much higher than fixed expected return products, and even greater than the expected return on investment in stocks.

We can choose long-term fixed investments in undervalued high-quality index funds, and allocate overseas QD index funds and broad-based index funds of different sizes to diversify risks.

Okay, that’s it for now on how to allocate assets. I hope it will be helpful to everyone.

Warm reminder, financial management is risky, so investment needs to be cautious.