Have Rs 50 lakh to invest? Expert explains whether lumpsum or STP is the better strategy
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Planning to invest a big amount?
Got a large amount from a property sale and confused whether you should invest it in one go or through an STP? Here is a little help, as reported by ETWealth.
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Best approach
A balanced approach would be to invest around 25-30% of the intended equity amount now and move the remaining amount gradually through an STP over the next 24 months, according to Ravi Kumar TV, Director, Gaining Ground Investment Services.
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How will this approach help?
The expert said that this allows the money to start participating in the market while reducing the anxiety of investing the full amount just before a possible correction.
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STP approach
The expert said that the STP should follow a fixed schedule like a weekly STP and should not be repeatedly changed based on market news.
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For moderate investors
The expert said that for a moderate risk appetite with a time horizon of 7-10 years, one may consider an allocation of 50% in equity funds, 20% in hybrid funds like balanced advantage funds, 20% in high-quality debt or fixed-income investments, and 10% in gold.
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Spread across equities
The expert further said that the equity portion can be spread across flexicap, multicap and midcap/smallcap funds.