The different types of securities, their risks, and their returns are :-

. Equities

. Debt
. Hybrid

Now risk and returns associated with these securities are:-

Equity securities

Pros

• Potential for higher returns compared to other investment options

• Some equity securities pay dividends, which can provide additional income and may
offset potential declines in the share price

Cons

• Stock prices can rise and fall dramatically

• No guaranteed returns

Debt securities

Pros
• Prices generally fluctuate less than equity securities
• Regular periodic payments at a fixed interest rate can provide income stability

Cons

• Typically lower long-term returns than equity securities

• Prices are impacted by the rise and fall of interest rates, generally more so than other
types of securities

Hybrid securities

Pros
 • Can provide a regular income similar to debt securities
• Can pay either a fixed or floating rate of return until a specified date
• Usually offer a higher potential rate of return than pure debt securities
• Potential to benefit from anticipated movements in interest rates and equity prices

Cons

• As with equity securities, the value can fall dramatically

• Can be complex to understand all the features and risks involved in the specific product
as each hybrid security is unique

My reccomendation :-
As we have lot of ways to make a mixed portfolio like coffee can investing, ray dalio’s all
weather portfolio , golden butterfly, pinwheel etc. In this case we can take higher risk as we
have already liquid amount with us in saving account of our client so we will use golden
butterfly here with little modification where we will devide it like:-

• 40 % low risk debt instrument

• 20% high risk equity
• 20% commodities market
• 20 % forex market

Now client worth 106.5 crore in which 5.32 crore would go in saving account.
Now mix portfolio for remaining 101.17 crore :-

1. Low risk debt instrument

Here we are going to invest around 40 % of 101.17 cr which is 40.46 cr in treasury
bills in indian market and US treasury bonds in american market equally, we are investing here
major chunks of amount because client has enough money in saving account to deal with any
unforseen circumstances.

2. High risk equity

Here we are going to invest 33 % of remaining amount which is 20.03 crore in penny
fundamentally strong stocks of indian and american stock market as even if 50 % of it works
then it can generate 100 times better return than any other investment.

3. Commodities
Now we are going to invest 50 % of remaining amount ( inr 40.68 cr) which Is 20.34 crore in to
commodites market of indian and american stock exhange,, we have oil, gold and base metals
best options to invest in both indian as well as american market as it protect us against inflation
and any other crisis.

4. forex

Rest 20.34 crore will be invested here in forex market, as it is illegal to trade in spot forex
market in india but we can trade in derivative and in US market we can trade in both spot and
dervative market as because of the potential to earn from forex market gives bountiful profits,
the main reason is accessible for the average investor who can trade small amounts of money
at any time of the day. All investors trade at a level playing field regardless of whether it’s a
multinational company or a single investor. No one can manipulate the market.