Investment tips: Reduce retirement target, remove laggards from your portfolio

Not many investors know whether they have invested in the right funds and if their fund portfolio is on track. The Portfolio Doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regard to the goals and, if required, recommends corrective measures. The advice given is based on the performance of the funds, the risk profile of the investor as well as his financial goals.

Gajanan Pai and his wife invest for their kid’s goals and retirement. Here’s what the doctor advises.

PORTFOLIO CHECK-UP

• Has been investing in equity mutual funds for past 10-12 years.
• Early start, regular investing have helped build a big corpus.
• Does not review fund performance. Portfolio has too many chronic laggards that should be removed.
• Portfolio is bloated. Needs to be consolidated.
• Just 7-8 schemes from different categories are enough.
• Retirement target of Rs.5 crore not possible. Cut to Rs.3.5 crore.
• Portfolio has smallcap and mid-cap skew. Be ready for volatility.
• Avoid direct stock investments unless you have time and expertise to manage them.

Note from the doctor

• Too much money idling in savings bank account. Open sweep-in account for higher returns.
• Establish a contingency fund. Put excess cash in a debt scheme.
• Use the NPS to save for retirement as well as to reduce tax.
• In the NPS, put 33% evenly in equity, corporate debt and gilt funds.
• Review investments and rebalance at least once in a year.
• Reduce risk when goal is near so that you don’t miss the target.

WRITE TO US FOR HELP
If you want your portfolio examined, write to etwealth@timesgroup.com with ¡¥Portfolio Doctor¡¦ as the subject. Mention the following information:

• Names of the funds 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.