How to Build a Diverse Investment Portfolio as a Young Investor?

24^th Jun 2025...

As a young investor, you’re at a stage where every decision you make can have a lasting impact on your future. It’s not just about chasing quick wins — it’s about setting up a foundation that grows stronger over time. Putting all your money in one place might feel simple, but it also comes with higher risk. A smarter approach? Spread your investments wisely so you’re prepared for both the ups and downs. But how do you create a strategy that balances growth and security? Let’s break it down for you.

Diversification for young investors: A strategy to consider

For young investors, spreading investments across different options like stocks, bonds, mutual funds, real estate or digital assets helps reduce risks and increase the chances of steady growth. By balancing high-risk, high-reward options with safer investments, you can build a portfolio that grows over time while protecting your money during market ups and downs. With years ahead to invest, young investors have the advantage of time to recover from risks and maximise long-term returns.

A guide for young investors to maximise returns with a diversified portfolio

As a young investor, you’re in the perfect position to shape your financial future. The key to growing your wealth while managing risks lies in building a well-rounded investment portfolio. Here’s how you can do that.

Balancing risk and reward

Investing in just one type of asset may seem straightforward, but it can expose you to unnecessary risks. Diversification allows you to offset the ups and downs of market-linked investments by including a mix of options. For example, while stocks and mutual funds offer the potential for high returns, their performance is often influenced by market volatility. Balancing these with more stable investments can help cushion the impact of market fluctuations.

Exploring investment options

For young investors with small amounts to start, options like stocks, mutual funds and cryptocurrencies can seem exciting because you don’t need a lot of money to begin. But these can go up and down a lot, making them risky. To balance that risk, you can add safer investments like fixed deposits (FDs) or newer options like leasing and inventory deals. These let you start with as little as ₹20,000 and give more stable, predictable returns.

Fixed returns for stability

Leasing and inventory deals are innovative ways to earn fixed returns without being affected by market volatility. Leasing involves co-owning an asset that is leased to a company, while inventory deals let you invest in a company’s inventory requirements. Both options provide stable, predictable returns. Thus, adding a layer of safety to your portfolio.

Think long-term

For young investors taking more risks, you should look to invest for the long term. Startup equity and commercial real estate can be good picks. With commercial real estate, you can co-own properties and earn money through rent or when the property’s value increases. On the other hand, startup equity lets you invest in growing companies that aren’t listed on the stock market and be part of their success. These options may need a bit more money upfront, but they can give big returns over time.

Mixing market-linked and non-market investments

The key to building a strong portfolio is to combine market-linked investments, such as stocks and mutual funds, with non-market-linked options like FDs, leasing and inventory deals. This mix reduces the overall risk and ensures a steady income stream, even when the markets are volatile.

Create a personalised portfolio

No two investors are the same and your portfolio should reflect your unique financial goals and risk appetite. For short-term goals, focus on safer, fixed-return investments, while for long-term wealth building, include high-growth options like stocks and startup equity.

The path to maximising returns with Kotak811

A Kotak811 Savings Account is more than just a place to park your money—it’s a gateway to smart financial planning. You can build the foundation of your investment journey and explore traditional options like fixed deposits and mutual funds while also accessing tools to diversify your portfolio with modern investment avenues. The account’s flexibility and convenience make it simple to start small, track your savings and grow your wealth steadily. With Kotak811, you can stay on top of your financial goals, manage risks effectively and maximise returns with ease.

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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.