Why Asset Allocation is More Important Than Stock Selection Long-term investing success depends 90% on asset allocation and only 10% on research & stock picking. Here’s why: 🔹 Assume you’re 30 years old, and your ideal portfolio allocation looks like this: •30% Large Cap •20% Mid Cap •15% Small Cap •20% Debt •10% Gold •5% Cash & Others Over the last decade, mid & small caps have significantly outperformed large caps, leading to portfolio distortion. If these segments grow faster, they might balloon to 30-40% of your total portfolio, while debt and large caps shrink in proportion. 🟢 What Happened? •Small & Mid Caps have grown disproportionately due to strong returns. •The portfolio has become risk-heavy, making it more vulnerable to market corrections. 🔴 The Problem? •If a market correction occurs, small & mid-caps could crash 30-40%, wiping out gains. •Investors who don’t rebalance may suffer huge drawdowns. https://x.com/rajneesh__jha/status/1889635444343677325?s=46