Will my SIP of Rs 40,000 be enough to get Rs 40 lakh for my daughter’s wedding?

These are a set of queries raised by ET Wealth readers, which have been answered by our panel of experts.

I am 52 and have been investing Rs 40,000 a month through SIPs in diversified equity mutual funds for the past 10 years. My daughter’s wedding is expected in about four years, and I estimate the expense at around Rs 40 lakh. Should I continue investing entirely in equity funds, or should I gradually start shifting part of my corpus to debt funds to protect it from market volatility? If so, when should I begin the transition and what would be an appropriate strategy?

Dilshad Billimoria MD & Chief Financial Planner, Dilzer Consultants: It’s good to see that you’ve been investing in a disciplined manner for the past 10 years. If your daughter’s wedding is expected to cost Rs 40 lakh today, that amount could grow to about Rs 58.6 lakh over the next four years, assuming 10% annual inflation.



About a year be fore the wedding, start gradually shifting the required amount from equity to safer options such as arbitrage funds or low-duration debt funds to reduce market risk. This also ensures that gains on long-term equity investments are taxed as long-term capital gains.


Alternatively, since you would have remained invested for over a decade, redeeming directly from equity is also a reasonable option, as the likelihood of suffering a negative return over such a long holding period has historically been very low.


I have been investing in equity mutual funds through SIPs for the past six years and have accumulated a sizeable corpus. Should I continue with the same SIPs, shift fresh investments to debt funds through STPs, or redeem some units to rebalance my portfolio? How often should investors review and rebalance their mutual fund portfolios?

Prableen Bajpai Founder, FinFix Research and Analytics: A periodic review, every 6 or 12 months, is usually sufficient for long-term investors. Regular reviews help assess whether the schemes are performing as intended and whether they remain aligned with financial goals and the desired asset allocation. Apart from these scheduled reviews, one must revisit the portfolio at the time of major life events (marriage or birth of a child), or when a large corpus needs to be invested or withdrawn.


Analyse if the schemes are delivering decent performance (relative to their peers and benchmarks) and continue to suit your risk profile and goals. If they do, then remain invested in the same schemes. However, if a scheme has been lagging in performance (over a few quarters), it can be earmarked for redemption towards the nearest financial goal rather than selling now and reinvesting for a shorter period. Thus, the clarity about the time horizon and purpose of each investment serves as the best guide for making exit decisions.


In general, exit decisions may be warranted when you are approaching a financial goal, your asset allocation deviates significantly (typically ±5%) from the target, or a policy or regulatory change affects the scheme’s suitability.

Our panel of experts will answer questions related to any aspect of personal finance. If you have a query, mail it to us right away. Email ID: etwealth@timesgroup.com