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Should I invest in stocks, SGB, crypto, or NPS? A medical professional seeks investment advice.

Ramalingam Kalirajan |7290 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Oct 07, 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

Question by Souvik on Oct 06, 2024Hindi

Hi, I’m 30years old Medical Professional. Bachelor but planning for marriage in 2026 & cost for marriage is already secured. My monthly income - 60000/- in hand. Doing an 30000 SIP monthly (Equity linked & 10%debt, Small-mid-large-multi-flexicap). 3.5Lac lumpsum also just last month started in few NFOs. Can curtail another 10000 monthly after budgeting & have another 3lacs in hand as lumpsum. My questions are - 1. Should I think for investing beyond MF e.g Stocks, SGB, Crypto, Foreign stock markets, Startups etc etc ? 2. What about NPS ? Should I do it or rather focus more on investing only ? 3. And kindly guide me for the monthly 10k & in-hand 3lacs as to where to invest it ? Thank you.

Ans: You are in a good financial position, with Rs 60,000 monthly income, of which you already invest Rs 30,000 in SIPs. You also have Rs 3.5 lakh in new fund offers (NFOs), and Rs 3 lakh as a lump sum in hand.

Investing Beyond Mutual Funds
Exploring options beyond mutual funds is a valid consideration. However, each asset class has its own risk, so it’s important to approach them thoughtfully:

Avoid Crypto for Now
Crypto investments remain unregulated in India. This exposes you to higher risks, as there's no protection from volatility or fraud. Given your current portfolio and risk tolerance, it’s better to avoid crypto for now. You should consider regulated and stable investment avenues until you build a more substantial corpus.

Startups: Not Suitable at Your Current Investment Level
Investing in startups involves high risk, often requiring a higher risk appetite and more experience in understanding early-stage businesses. Typically, this type of investment is better suited once you've achieved a portfolio size of at least Rs 5 crore in mutual funds or other safer assets. At this stage, it’s more important to focus on growing your wealth through safer and proven investments.

Foreign Stock Exposure
You can consider adding international exposure to your portfolio for diversification. However, rather than investing directly in foreign stocks, which involves understanding various markets, you can opt for international mutual funds. These schemes offer exposure to global markets while being managed by professionals. This allows you to benefit from the growth of companies outside India without the hassle of managing individual stock investments.

National Pension Scheme (NPS)
NPS is a solid retirement-oriented option with tax benefits under Section 80C and 80CCD(1B). You may consider it as a long-term retirement tool, especially for additional tax-saving benefits. The 10% equity allocation within NPS provides balanced growth over time. However, NPS lacks flexibility in withdrawals compared to mutual funds. If retirement is a core focus, you can allocate a portion of your Rs 10,000 monthly to NPS. But, for wealth-building over the next few years, investing primarily in mutual funds might yield better returns and flexibility.

Suggestions for Rs 10,000 Monthly SIP
Given your diversified current portfolio, a balanced approach with additional SIPs could further enhance your investment:

Diversified Large Cap/Blue-Chip Fund: Stability during market volatility and consistent long-term growth.

Balanced Advantage Fund: To offer a mix of equity and debt, ensuring moderate returns with limited risk.

Mid/Small-Cap Fund: If you want to take some calculated risk for higher returns, mid/small-cap funds could be a good option.

Suggestions for Rs 3 Lakh Lump Sum
You can allocate your Rs 3 lakh lump sum wisely as follows:

Debt Mutual Fund: Consider a debt fund to maintain liquidity and lower risk. This would be ideal for any short-term needs or emergency funds.

Balanced Mutual Fund: If you’re seeking moderate growth with lower risk, a balanced fund could give you steady returns.

Sovereign Gold Bonds (SGBs): If you're looking for a safe, long-term investment with tax-free maturity benefits, SGBs can add value and hedge against inflation.

Final Insights
At this stage, it’s crucial to focus on expanding your mutual fund portfolio before venturing into high-risk areas. Avoid crypto and startup investments until your asset base is more robust. NPS can be considered for retirement planning, but your primary focus should remain on wealth-building via mutual funds. International funds could provide valuable diversification, and the Rs 10,000 SIP and Rs 3 lakh lump sum can be allocated into growth-oriented funds with a balanced risk profile.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.