What is barbell investing strategy? Can it be followed in India?
Does the Barbell strategy of investing suits an Indian investor? When and who should follow this investing style? Read the answer to this from our financial experts.
I read somewhere that 'Barbell' investing strategy is a good strategy to follow for personal finance. Can someone help me explain what exactly it is? Can it be followed in India- if yes, how? Please guide me.
Barbell strategy is about playing with extremes. Like investing one half of your money into the safe investment and another half into the speculative investment. This was specific to the bond investment strategy. Where it advocates you to avoid investing into middle partial safety level. So it tends to keep the investor into the edge of safety and risk.
In India, It carries a certain level of risk. Then again people use this strategy outside the context of bonds. People invest into the equity and the fixed deposits with varying interests. So this strategy is in use as we speak.
However in context of the bonds, this strategy for India, is not much usable. We don't have much strong bond and govt. funds to invest into which has decent percent of returns.
This method has been used through the mutual funds as well. Like many investors invest into the mid cap funds etc. And they tend to have such funds available where the fund manager do employ the barbell method to some extent. In such case you can see that unknowingly many of us are using this method through such funds.