Explain last month to a client: equity fell 4% on 60% of her portfolio, debt rose 1% on 30% and gold rose 3% on 10%. What did her portfolio do, and which part drove it?

Her portfolio fell 1.8%, about Rs 4.5 lakh, and equity caused all of it. Equity, 60% of the money, fell 4% and took off 2.4 points. Debt and gold added 0.3 each, softening the fall by 0.6 points. Equity has drifted to about 58.7% of the portfolio, well within any sensible rebalancing band, so nothing needs to change.

Think of a household where 60% of income comes from one job, 30% from rent and 10% from a small business. If the job pays 4% less, household income does not fall 4%; it falls by 60% of that. A portfolio's return is the sum of each sleeve's weight times its return, and each product is that sleeve's contribution. Equity contributes 0.6 times -4%, or -2.4 points. Debt contributes 0.3 times 1%, +0.3. Gold contributes 0.1 times 3%, +0.3. Total: -1.8%.

Lead with the number she asked for, then the reason, then what it means. Something like: your portfolio fell 1.8% last month, about Rs 4.5 lakh. All of that came from the equity part, which fell 4%; the debt and gold did their job and took the edge off. The fall is in line with the plan we agreed: a 60% equity portfolio is built to move less than the market in a bad month, and it did. Keep it to three sentences before she asks anything else; a client who called worried wants the answer, not a lecture on attribution.

Check the weights, not the headline. After the month, equity is Rs 144.0 lakh of Rs 245.5 lakh, about 58.7%, against a 60% target. A drift of about 1.3 points is noise; a portfolio is rebalanced when a sleeve moves outside an agreed band, often around five points, not after every bad month. Nothing about Sudha's needs or her horizon has changed either, so the plan stands. Say the limit plainly: a month is too short to judge anything about the funds themselves.