You chose 60:40. The market made it 75:25

Sixty per cent in equity, forty in debt. You decided that once. The market has been re-deciding it every day since.

For our 400th episode, I asked Dhirendra Kumar how a plan changes when its owner never touches it.

How drift happens

Take Rs 1 lakh, with Rs 60,000 in equity and Rs 40,000 in fixed income. The market opens, and your 60 becomes 62, then 63. After a good run, it is 75. The market votes on your allocation every day, he said. You vote only once, at the start.

A severe fall does the opposite, and that 60 can shrink to 35. Gold does it too. Anyone who held 10 per cent in gold through last year’s surge could have watched it become 20. Whatever wins takes over, and you start as a steady investor and end up an aggressive one without ever choosing to be.

Why nobody notices

Drift looks like success. The total keeps rising, so you credit your own discipline. And it happens slowly, a per cent up, a per cent down, the way grass grows. Then one day your 50:50 is 90:10.

By that point, Dhirendra said, your emotions are running the portfolio. At 90 per cent equity, selling feels like walking out of a bull run. At 40 per cent in a falling market, buying more takes courage. Either way, nothing gets done. What protects you is a rule you set before the market gets a say.

The once-a-year check

Fix one date a year. Diwali, New Year, 31 March, anything, as long as the calendar decides and your mood doesn’t. On that day, write down the value of everything you could use if you needed the money: EPF, PPF, NPS, fixed deposits, cash, funds, stocks. Total it, then work out each asset’s share.

I asked why everything. Because otherwise, he said, the IPO you bought last month, a sliver of your wealth, will hog your attention.

Then four questions. What did I set out to be? How does today compare? What did I actually do this year? What will I do to get back on track?

Fixing it

If fresh money can tilt the balance, send your SIPs to the underweight side and the drift corrects without any tax. But a Rs 50,000 monthly SIP cannot rescue a Rs 1 crore portfolio. Then you sell part of the winner and pay the tax, for the sake of discipline. Or you hold funds that rebalance internally and let them do the job.

I used to assume rebalancing meant predicting the market. It doesn’t. It is one date a year, and a check that your money still looks like the plan you made.