Asset allocation is the portfolio’s personality. A 100% equity SIP can be appropriate for a 25-year goal and reckless for a house deposit in 18 months.
Set allocation from constraints
- Goal date and flexibility.
- Job stability and human capital risk.
- Willingness to keep buying in a 30–50% equity drawdown.
- Other assets (home equity, pensions) already held.
Conclusion
Write target weights before you automate. SIP without allocation is just scheduled guessing.