INCOME TAX15 Sept 2026
How much debt should you hold? More debt can cushion market falls, but there is a trade-off
FundsIndia Research has compared how different equity-debt mixes behaved over rolling seven-year periods. If you hold a long-term portfolio, this study matters: a 70% equity portfolio returned 13.8% on average but fell 40% at worst. Adding debt cut both. A 50% debt mix returned 12.5% with a 27% fall. Decide how much loss you can tolerate before choosing your mix.
Key Statutory Highlights
- FundsIndia found a portfolio with 70% equity and 30% debt gave an average annualised return of 13.8%, with a maximum drawdown of 40%.
- Raising the debt allocation to 50% lowered the average return to 12.5%, but reduced the maximum drawdown to 27%.
- A portfolio with 70% debt and 30% equity returned 10.7% on average, and its maximum drawdown was only 14%.
Actionable Advice for Taxpayers / Founders:Review your own equity, debt and gold mix against how much temporary fall you can actually stay invested through, and remember that these are historical averages, not a promise of future returns.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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