The advice given is based on the performance of the funds, the risk profile of the investor as well as his financial goals.
1. Ajay Bafna and his wife are saving for multiple goals. Here’s what the doctor has advised them:
Goals
Portfolio check-up
- Built a sizeable corpus through equity funds and Provident Fund.
- Aggressive savings and early start have yielded good results.
- Goals are ambitious but small increases in SIPs will help achieve them.
- Actively managed funds deliver better value than passive index funds.
- Avoid using insurance for investment.
- FDs are tax inefficient. Use debt funds instead.
Investment portfolio
Note from the doctor
- Use NPS to save for retirement and cut tax. Go for aggressive allocation.
- Review investments and rebalance at least once in a year.
- Reduce risk when goal is near so that you don’t miss the target.
2. Tone down expectations from equities
Vikas Aggarwal is investing in equity funds to build a corpus of Rs 2 crore in the next 10 years. Here’s what the doctor has advised him:
Goal
Portfolio check-up
- Earned good returns from SIPs in equity funds over the past 3-4 years.
- Funds are good but expectations from equities are too high.
- Must hike monthly SIPs to Rs 45,000 and further hike by 10% every year.
- Else must scale down goal to Rs 1.2 crore in 10 years or defer by two years.
- Review mutual fund portfolio at least once a year. Change if any fund’s performance slips.
Investment portfolio
Assumptions used in the calculations
Inflation
Education expenses: 10%
For all other goals: 7%
Returns
Equity funds: 12%
Debt options: 8%
(Portfolios analysed by Raj Khosla, Managing Director and Founder, MyMoneyMantra)
If you want your portfolio examined, write to etwealth@timesgroup.com with “Portfolio Doctor” as the subject. Mention the following information:
Names of the fund you hold
Current value of the investment.
If you have SIPs running in any of them.
The financial goals for which you invested.
How much you need for each financial goal.
How far away is each goal.
