MF Portfolio Doctor: Naik needs to cut retirement corpus target to fit in other goals
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.
By ET Bureau |
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Review investments and rebalance the portfolio at least once a year.
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.
1) Raghavendra Naik, 44, is investing in equity funds for his daughter’s education and marriage, and his retirement. Here’s what the doctor has advised him: Portfolio check-up
Investments are in in good equity schemes, but need to be consolidated.
Child’s education and marriage goals can be met by hiking the SIP amount by 10% per annum.
Retirement target of Rs 5 crore is too high; scaled down 33% to match income and investible surplus.
Provident Fund not mentioned. Corpus is assumed to be Rs 25 lakh and monthly contribution Rs 8,000.
Investor’s existing portfolio Note from the doctor
As goals are longterm, equity funds are most suitable.
Review investments and rebalance the portfolio at least once a year.
2) Arun Prasad, 41, has invested in equity funds and fixed deposits for the higher education of his two daughters. Here’s what the doctor has advised him:
Portfolio check-up
Started late and yet not saving enough to meet goals. Must increase investment by at least Rs 7,000.
Marriage goals cannot be met because of paucity of resources.
A large sum is invested in taxinefficient and lowyield fixed deposits.
Shift money from FDs into equity mutual funds in a systematic manner.
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
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:
