I am 24 years old. I would like to create approx Rs 5 cr wealth in next 12 years. Kindly advice how much I will require to invest?I have just started SIPs in following funds (2 months back.)

1. Mirae Asset Large Cap - Rs.2000/- pm
2. Parag Parekh Flexicap - Rs. 2000/-pm

Would like to invest another Rs.7000/pm in SIP. Kindly suggest funds.

Also I will start investing Rs.1.5 lakh in PPF and Rs.50,000/- yearly in NPS effective 01.04.2023.

Ans: It's great to see your diversified investment approach through SIPs across various mutual fund categories. Considering your existing portfolio, here's a suggestion for investing an additional 5k:

Given your current allocation, you might want to consider adding to a category where you have relatively lower exposure. Since you already have investments in ELSS, Midcap, Thematic, Multi-Asset Allocation, Flexi Cap, Dynamic Asset Allocator, Large & Mid Cap, and Small Cap funds, you may consider adding to a fund category that complements your existing holdings.

Considering your investment style and the current market scenario, you might want to explore investing in a Balanced Advantage Fund or a Hybrid Equity-Oriented Fund. These funds dynamically allocate between equity and debt instruments based on market conditions, providing a balance of growth potential and downside protection.

Here's a suggested addition to your portfolio:

Balanced Advantage Fund: Invest the additional 5k in a reputable Balanced Advantage Fund that has a proven track record of managing market volatility and delivering consistent returns over the long term.
Ensure you research and select a fund that aligns with your risk tolerance, investment goals, and overall portfolio strategy. Additionally, regularly review your portfolio's performance and make adjustments as necessary to stay on track with your financial objectives.

Always remember to consult with a certified financial planner or investment advisor before making any significant changes to your investment strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Analysing Your Investment Portfolio

Overall, your portfolio seems well-diversified across different market caps and fund types. This is a good strategy to manage risk and potentially capture returns from various market segments.

However, there are a few points to consider:

• Overlapping Funds: Some of your funds, especially the flexi cap and large and mid-cap funds, may have overlapping holdings. This might introduce some redundancy in your portfolio.
• Number of Funds: While diversification is important, having too many funds can make it difficult to track and manage your investments. Consider consolidating some funds if possible.
• Risk Tolerance: Ensure that your allocation to small-cap funds aligns with your risk tolerance. Small-cap stocks can be more volatile than large-cap stocks.

Creating a Rs 2 Crore Corpus in 12-15 Years

To achieve your goal of creating a Rs 2 crore corpus in 12-15 years, you'll need to increase your monthly SIP amount or consider other investment options.

Here are some strategies:

• Increase Monthly SIP: If you can afford to increase your monthly SIP amount, that's the most straightforward way to accelerate your goal.
• Consider Lump Sum Investments: If you have any surplus funds, consider making lump sum investments in addition to your SIPs.
• Rebalance Regularly: Review your portfolio periodically and rebalance to ensure it aligns with your risk tolerance and investment goals.
• Explore Other Investment Options: While equity mutual funds are a great way to build wealth, you might also consider other investment options like real estate or alternative investments, depending on your risk tolerance and financial goals.

Increasing Your Monthly SIP:

• Calculate the Required Increase: To determine how much you need to increase your monthly SIP, you can use online financial calculators or consult with a financial advisor. Factors like your current investment amount, expected annual returns, and investment horizon will be considered.
• Assess Your Financial Situation: Evaluate your income, expenses, and savings to determine if increasing your SIP is feasible. Consider setting aside a portion of any salary increases or bonuses for investment.

Making Lump Sum Investments:

• Identify Surplus Funds: Look for any unused funds, such as emergency savings, or one-time windfalls like bonuses or inheritance.
• Consider Market Conditions: While lump sum investments can be a powerful way to accelerate wealth creation, it's important to be mindful of market conditions. Investing when markets are volatile can be risky.

Rebalancing Your Portfolio:

• Determine Rebalancing Frequency: Decide how often you want to review and rebalance your portfolio. This could be quarterly, semi-annually, or annually.
• Use a Systematic Approach: Implement a systematic rebalancing strategy to ensure your asset allocation remains consistent with your risk tolerance and investment goals.

Exploring Other Investment Options:

• Real Estate: Consider investing in real estate through direct property ownership or real estate investment trusts (REITs).
• Alternative Investments: Explore other alternative investments like private equity, venture capital, or hedge funds, but be aware of the associated risks and potential illiquidity.

Remember:

• Consult a Financial Advisor: A financial advisor can provide personalized guidance based on your specific circumstances and help you create a comprehensive investment plan.
• Stay Informed: Keep yourself updated on market trends, economic indicators, and changes in tax laws that could affect your investments.
• Be Patient: Building wealth takes time and discipline. Avoid making impulsive decisions based on short-term market fluctuations.