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Ramalingam Kalirajan |8093 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 28, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - May 28, 2024Hindi

I am 27 year old, have been earning money since 2017 but didn’t save any or used all the money. Now since a year I’ve started saving , my current portfolio/plan is 2286 : tata sampoorn life insurance 750000 (rop) 40 years 3180 : aditya birla capital guarantee solution pay 5 year stay invested 20 years 3000 : bajaj goal assure pay 20 y invest 20 y 2000 : tata fortune pro pay 5 invested 15 y Sips ::::::: 4000 : nippon small cap 2000 : quant small cap -G 2000 : hdfc infrastructure-G 2000 : icici pru infrastructure-G 2000 : icici pru bharat 22 fof-G 2000 : icici pru equity and debt - idcwy 1000 : kotak equity hybrid reg-G 1000 : quant focused -G Health insurance with no return. I can not stop the policy plans, can only change sips Does this portflio looks healthy to you, or j need to shuffle / add/ remove something. Plz suggest

Ans: Your commitment to saving and investing is commendable, especially after recognizing the need for financial planning. Let’s evaluate your portfolio and suggest improvements for a healthier financial future.

Current Portfolio Assessment
Insurance Policies
You have allocated significant funds to various insurance-cum-investment products. These plans often offer low returns compared to other investment options. However, since you cannot stop these policies, it's crucial to focus on optimizing your other investments.

SIP Investments
Your SIP investments are diversified across small cap, infrastructure, and hybrid funds. Small cap funds can provide high returns but come with higher risk. Infrastructure funds are sector-specific and can be volatile. A mix of equity and debt funds is good, but let's refine it further.

Diversification and Risk Management
Diversification is vital for risk management. While you have diversified across various funds, it's important to balance high-risk and low-risk investments. Ensure you have a mix of large cap, mid cap, and small cap funds. This will help in balancing the risk and returns.

High-Risk Investments
Small Cap Funds: These can yield high returns but are also risky. Limit exposure to these funds to manage risk.

Sector-Specific Funds: Infrastructure funds can be volatile. Consider reducing exposure to these funds and reallocating to more stable options.

Moderate-Risk Investments
Equity Hybrid Funds: These funds balance between equity and debt, providing moderate risk and returns. Increasing allocation to such funds can stabilize your portfolio.
Low-Risk Investments
Debt Funds: Adding debt funds can provide stability and reduce overall portfolio risk. They offer lower returns but are safer.
Regular vs. Direct Funds
Investing through a Certified Financial Planner can provide valuable guidance. Regular funds come with expert advice, helping you navigate market complexities. Direct funds might save on costs but lack professional guidance, which can be critical for long-term success.

Health Insurance
Your health insurance with no return is a prudent choice. It’s essential for financial protection against medical emergencies. Ensure the coverage is adequate for your needs.

Recommendations for Improvement
Rebalance SIP Investments

Reduce small cap and sector-specific fund exposure.

Increase allocation to equity hybrid funds for balanced growth.

Add debt funds for stability and risk reduction.

Emergency Fund

Ensure you have an emergency fund equivalent to six months of expenses. This should be in a liquid, low-risk investment.
Retirement Planning

Start a dedicated retirement fund if not already in place. This could be a mix of PPF, EPF, and equity funds.
Review and Adjust Regularly

Regularly review your portfolio to ensure it aligns with your financial goals and risk tolerance.

Make adjustments as needed with the guidance of a Certified Financial Planner.

Conclusion
Your initiative to save and invest is a great step towards financial security. By rebalancing your portfolio and managing risks, you can achieve a healthier financial future. Regular reviews and adjustments with professional guidance will ensure you stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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