I am 35 and have about 15L. Where can I invest to make best use of it. I already has 1.5L of 80C savings (annually), 2L of SGB, 7L in MF.
Ans: You're at an excellent point in your financial journey with a diverse portfolio. At age 35, you have ?15 lakhs to invest, along with existing investments in savings, Sovereign Gold Bonds (SGBs), and mutual funds. Let's explore how to best use this money to achieve your financial goals.
Compliments and Assessment
Firstly, congratulations on your disciplined savings and investments. Your existing ?1.5 lakh in 80C savings, ?2 lakh in SGBs, and ?7 lakh in mutual funds show a solid foundation. It's clear you're thinking strategically about your future. Let's build on that.
Evaluating Your Current Portfolio
Your current portfolio demonstrates diversification across different asset classes:
80C Savings: Provides tax benefits and encourages disciplined savings.
Sovereign Gold Bonds (SGBs): Offer a hedge against inflation and are a stable investment.
Mutual Funds: Likely offering a mix of growth and stability, depending on the fund types.
Investment Strategy for ?15 Lakhs
Diversified Equity Funds
Given your existing exposure to mutual funds, adding diversified equity funds can be beneficial. These funds invest across various sectors and market capitalizations, offering balanced growth and risk.
Actively Managed Funds
Actively managed funds can adapt to market changes, potentially outperforming passive index funds. They benefit from the expertise of fund managers who make strategic investment decisions.
Debt Funds
To balance the risk, consider investing a portion in debt funds. These funds invest in fixed-income securities like government bonds and corporate debt, providing stability and regular income.
Hybrid Funds
Hybrid funds, which combine equity and debt, can provide growth while managing risk. They offer the potential for higher returns compared to pure debt funds while maintaining lower volatility than equity funds.
Systematic Investment Plan (SIP)
Investing through SIPs in these funds can spread the investment over time, reducing market timing risks and encouraging disciplined investing.
Advantages of Regular Funds
Professional Management
Investing through an MFD (Mutual Fund Distributor) with CFP credentials ensures professional management and tailored advice. This approach provides better guidance compared to direct funds, where you manage investments yourself.
Better Performance
Actively managed funds, handled by professionals, often outperform direct and index funds due to strategic adjustments to market conditions.
Disadvantages of Direct Funds
Direct funds require time, knowledge, and constant monitoring, which can be challenging. Regular funds managed by professionals simplify this process and can lead to better results.
Investment Allocation Example
Here's a suggested allocation for your ?15 lakhs:
Diversified Equity Funds: ?6 lakhs
Debt Funds: ?3 lakhs
Hybrid Funds: ?3 lakhs
Actively Managed Funds: ?3 lakhs
Monitor and Review
Regularly review and adjust your investments based on performance and changing financial goals. A Certified Financial Planner can assist with these adjustments, ensuring your portfolio remains aligned with your objectives.
Conclusion
With your ?15 lakhs, diversifying across diversified equity, debt, hybrid, and actively managed funds can balance growth and risk. Investing through SIPs and utilizing professional management through an MFD with CFP credentials will optimize your portfolio. Regular review and adjustment are key to maintaining alignment with your financial goals.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in