MF portfolio doctor: Why Dubey should redeem stocks, shift to debt for short-term goal

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.

I. Ankit Pratap Singh is investing for multiple goals. Here’s what the doctor has advised him:

Goals

Portfolio

Portfolio check-up

• Investing in equity funds since 2017. Funds are good but must book profits for near term goal.
• Will also need loan of Rs 8-10 lakh for plot.
• Factor in inflation correctly. Education costs rising by 10% a year, living costs by 7%.

Note from the doctor

• Lifespan of 74 years is low. Plan for 20-25 years in retirement.
• Has not included marriage of second child among goals.
• Review investments and rebalance at least once in a year.

II: Shift to debt for short-term goal
Rajanish Dubey is saving for marriage, his child’s college and retirement. Here’s the doctor’s advice:
Goals

Portfolio

Portfolio check-up

• Investing in stocks and equity funds for several years but booking profits intermittently.
• Funds are good, but needs to increase investments.
• Should redeem stocks and shift to debt for near-term marriage goal.
• Provident Fund balance is low. Don’t withdraw from it before retirement.
• Opt for maximum equity exposure in NPS account.
• Review investments and rebalance at least once in a year.

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:
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.