Hello, I am 33 years old, and I need advice on short term investment. I have 5L saving and wanted to invest till Dec 2024 so please let me know any short-term investment plan to get better returns. Next year Jan 2025 my plan is to buy a house and at that time I can use the same investment.

Ans: We would recommend you to invest in stocks such as HDFC Bank, L&T, HUL, Britannia (on dips), Dabur, Colgate, Asian Paints, Maruti, Infosys, Tech Mahindra, Reliance Industries (on dips), Cipla, Biocon, Havells, Voltas and Bharti Airtel. We advise you to buy these stocks in staggered manner as these stocks have decent fundamentals and good long term growth prospects which can deliver healthy returns

Ans: These two funds can be considered

1. Tata Balanced Advantage Fund (Growth)
2. ICICI Prudential Balanced Advantage Fund (Growth)

 

Ans: Short-Term Investment Strategies for Achieving Your Goals
Assessing Your Short-Term Goals
With a horizon of 4-5 years, your objectives of funding a marriage and buying a car require a conservative investment approach to minimize risk while aiming for reasonable returns. Let's explore suitable strategies to meet these goals effectively.

1. Debt Mutual Funds
Consider allocating a portion of your monthly investment towards debt mutual funds, which offer stability and relatively lower risk compared to equity investments. Opt for short to medium duration debt funds or dynamic bond funds that provide potential for higher returns than traditional fixed deposits.

2. Recurring Deposits (RDs)
Investing in Recurring Deposits (RDs) can be a simple and convenient option to accumulate funds for short-term goals. RDs offer fixed returns with the flexibility of monthly contributions, allowing you to build a corpus gradually over time.

3. Liquid or Ultra Short-Term Funds
Liquid funds or ultra-short-term funds are suitable for parking your short-term savings, offering liquidity and stability. These funds invest in short-term debt securities, providing potential for higher returns than traditional savings accounts while maintaining capital preservation.

4. Systematic Investment Plans (SIPs) in Balanced Funds
Consider investing in SIPs in balanced funds, which offer a mix of equity and debt exposure, balancing growth potential with downside protection. Balanced funds can provide stability during market fluctuations while aiming for reasonable returns over the medium term.

5. Goal-Based Investing
Segment your short-term goals, such as marriage and car purchase, and allocate investments accordingly. Determine the required amount for each goal and set up separate investment accounts or portfolios to track progress towards achieving them.

6. Regular Review and Adjustment
Periodically review your investment strategy and make adjustments based on changing market conditions, goal timelines, and personal circumstances. Consider reallocating funds between investment options to optimize returns and manage risk effectively.

Conclusion
By diversifying your investments across debt mutual funds, RDs, liquid or ultra-short-term funds, and SIPs in balanced funds, you can create a robust short-term investment strategy to achieve your goals within the 4-5 year horizon. Stay disciplined in your savings approach and monitor your progress regularly to ensure you're on track to meet your objectives.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Ans: You earn Rs 35,000 per month. You save Rs 10,000 monthly. At 21, you have ample time to grow your savings. Let's create a plan for short-term and long-term goals.

Short-term Investment Plans
Emergency Fund: Build an emergency fund. Save at least 6 months of expenses. This provides a safety net for unexpected needs.

Recurring Deposit: Consider a recurring deposit. It offers stable returns with low risk.

Liquid Funds: Invest in liquid mutual funds. They provide better returns than savings accounts and are easily accessible.

Long-term Investment Plans
Systematic Investment Plan (SIP): Start SIPs in equity mutual funds. These offer potential for high returns over time.

Diversification: Diversify your investments across large-cap, mid-cap, and small-cap funds. This balances risk and growth.

Public Provident Fund (PPF): Open a PPF account. It offers tax benefits and guaranteed returns, ideal for long-term savings.

Avoid Index Funds
Active Funds: Choose actively managed funds. They have the potential to outperform index funds through expert stock selection.
Benefits of Regular Funds
Professional Guidance: Invest through regular funds with the help of a Certified Financial Planner. They provide expert advice and portfolio management.

Long-term Growth: Regular funds can adapt to market changes better than direct funds, ensuring sustained growth.

Saving for a Home
Goal-based SIP: Start a separate SIP for your home goal. This ensures dedicated savings for your future home.

Equity and Debt Mix: Invest in a mix of equity and debt funds. This balances high returns and stability.

Insurance Needs
Term Insurance: Consider a term insurance policy. It provides financial security for your family in case of unforeseen events.

Health Insurance: Ensure you have a comprehensive health insurance plan. It covers medical expenses and protects your savings.

Periodic Review
Regular Check-ups: Review your investments regularly. Ensure they align with your goals and make adjustments as needed.

Rebalancing: Rebalance your portfolio to maintain the desired asset allocation. This keeps your investments on track.

Financial Discipline
Consistent Saving: Continue saving Rs 10,000 monthly. Increase your savings rate as your income grows.

Avoid Debt: Stay away from unnecessary debt. Use credit responsibly and pay off any loans promptly.

Final Insights
Your early start and disciplined saving habits are commendable. Focus on building a diversified investment portfolio. Use SIPs in equity mutual funds for long-term growth. Ensure you have adequate insurance coverage. Regularly review and adjust your investments to stay on track for your home goal.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

Ans: Dear Sir,

Thank you for sharing your details. At 36 years with no liabilities, healthy rental income of 1.5 lakh/month, and existing term plan premium, you are in a strong financial position. Below is a broad framework to plan long-term and short-term investments.

Observations

Rental income gives you steady cash flow.

No liabilities means higher capacity to save and invest.

Term plan already provides risk cover.

Important to balance between liquidity (short-term) and wealth creation (long-term).

please consult qpfp/financial planner for complete planning

Best regards,
Naveenn Kummar, BE, MBA, QPFP
Chief Financial Planner | AMFI Registered MFD
www.alenova.in