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  • Category: Investments

    Advice on investment choices to meet long-term objectives as per existing portfolio

    Have good investments in your portfolio but unsure if you are on the right path to achieve long-term objectives? Get advice from experts whether or not you need to make changes to your existing portfolio.

    My profile in brief:-

    a) I have an 8-year-old daughter presently in her 3rd grade. She was born in 2010 May.

    b) I am 42 years of age worked in Gulf for over 15 years and returned to India for good only 2 months ago and looking for a suitable opportunity.

    c) My wife is working as an Asst. Prof for Mathematics in a Self-financing college.

    My asset allocation (Portfolio) in brief:

    1. PPF - Rs 26.30 Lakhs (2nd year of the 1st extension block of 5 years)

    2. Equity mix - Rs 27,500 per month in the form of SIP in the following funds
    a) DSPBR Equity (G) - Rs 6000/- p.m (Rs 3500 from May 2011 & Rs 2500 from Sep 2016)
    b) L&T Equity (G) - Rs 3000/- p.m from May 2011
    c) IDFC Multicap (G) - Rs 7000/- p.m (Rs 2000 from June 2010 & Rs 5000 from Sep 2016)
    d) Reliance Multicap (G) - Rs 6000/- p.m from Aug 2012
    e) Sundaram Midcap (G) - Rs 5500/- p.m from Aug 2012

    Last month, infused Rs 5 Lakhs in all the above funds of Rs 1 Lakh each as a lumpsum as the market is undergoing a correction.

    3. Hybrid funds ( Debt and Equity mix)
    a) HDFC Hybrid bond (previously MIP Longterm growth) - Rs 18 Lakhs
    b) Reliance MIP Growth - Rs 23 Lakhs

    Doing an SWP of Rs 20K every month from both the above MIPs for regular income and the HDFC MIP SWP of Rs 10K is being reinvested in buying monthly SIPs. So, only Reliance MIP SWP of Rs 10k is being utilised for spends every month.

    4. Fixed Deposits - Rs 30 lakhs @ average ROI of 9% p.a, maturity in 2021 & 2022.

    5. Gold - ornaments and bars worth Rs 15 Lakhs

    6. Contingency expenses - Rs 10 lakhs

    7. Health Insurance for my wife (Diabetic Insurance) - Sum insured - Rs 2 Lakhs

    8. Own a 2 BHK flat worth Rs 50 Lakhs and debt free. Only last month retired papers from the bank after the closure of Home loan in full.

    9. Regular Income - Rs 30 K from my Fixed Deposits' interest until May 2021.

    10. Made provisions to pay for my daughter's school fees (about Rs 1.2 lakhs p.a) for another 2 years.

    My goals

    1. I would like to raise a corpus substantial enough to take care of my daughter's Graduation in 2028 and Post Graduation (PG in a foreign country in 2032) and also for her Marriage in 2035. Please advise if my SIPs are in line with my expectations.

    2. My retirement at 50 years. Your suggestions to rejig my portfolio, if necessary.

    Please revert with your expert advice and opinion if my investment portfolio is on the right track which has the potential to deliver my expectations over time.

    Appreciate your time and support.
  • Answers

    2 Answers found.
  • Your portfolio seems to be right mix of things at the present juncture but there are many factors in the market which decide the fate of our investments in the long run. I will take them one by one for easy understanding.

    Before that I will advise you to please join a job depending upon your past experience and skills. Do not be bogged down by the low salaries here as compared to the Gulf. Only after you join a job you will be in a position to network for greener pastures here.

    Seeing the changing face of governance and emphasis on online transactions and containment of inflationary trends in our country the bank FD interest rates are expected to remain stagnant or even may go down to the levels of 5-6%. So your investment in FD which is maturing in 2021 may require some shifting to more prospective avenues at that time.

    Gold has become a stagnant investment for quite some time and we can hope a rally in this commodity so one can increase investment in this area by purchasing more gold or even Govt gold bonds which give a 2.5 % return also on the investment in addition to the capital growth prospect in that.

    If the Indian economy moves ahead the markets are going to do well and MF based on blue chips (top FMCG, pharma, finance, IT companies etc) are going to fare excellent.

    We have to be patient in this. You can go through the portfolio of your MF schemes and see the companies where they have invested. Take care that their investment is diversified like a part in pharma, another part in finance, another part in FMCG etc. You can swap some investment in this fashion from dedicated sector to multiple sector. This helps in hedging the risk associated with investing in a particular sector.

    In a favourable market the returns from MF will be sufficient for you to manage your expenditures for your daughter's education and marriage.

    Presently property market is also under pressure and prices have become stagnant but you can try to acquire them in slightly away locations from the town or city but near main roads. These type of investments also have upside potential in future real estate market as today they are available at a cheaper levels.

    From your details it appears that you have worked in private sector. So do not think about retirement time today. A person having good health can continue working till an age of around 70. Working keeps a person financially fit and mentally happy.

    If you are computer savy, you can visit some financial sites like and find out the details of your MF schemes vis-a-vis other schemes to understand the importance of differentiation in the portfolio of these schemes.

    Now a days banks give slightly more interest on FDs for short periods as compared to longer ones. You can keep some money in them which can be handy in near future.

    Knowledge is power.

  • Overall your portfolio mix is practical and okay for now.

    First of all, ensure that you have utilised the facilities available for returning NRIs. If not yet done consult with your bank and do the needful.
    You will be liable for tax on the incomes you get from the investment here. You will be subject to the tax rules of a resident citizen from now on.
    As I said above in general your present portfolio mix looks okay.
    However after two years when the Bank FDs of higher interest start maturing, you have to review and rethink if the then interest are less. Then you may have to increase the principal amount to keep the interest receipt sufficient for your regular expenses.

    From now on you may take Tax Saver ELSS, to save any tax, and also start slowly adding investment on debt funds also.

    The insurance cover is not sufficient now. You need to take medical insurance for higher amount. It can be a family floater. Select one which covers existing illnesses also from day one.
    You may open a Sukanya Samrudhi Yojana account in the name of your daughter now and deposit maximum allowed amount every year. Though the interest may not equal to that from other investments it can be a safe provision and tax saver too.
    Take up a suitable job or occupation which can supplement your income as well as give you active life.

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