Dear Sir, I want to start a PMS but friends say, MFs are better because euqity is volatile. I am 15 years away from my retirement and want to retire strong. I want to safely invest about 50 Lakhs, with 8% return on an average per year. Please advise.

Ans: Hello Parry and thanks for writing to me. If you are investing in equity as an asset class whether it is thru Portfolio Management Services or Equity Mutual Funds, you will face volatility. Equity is a long term investment and with your retirement horizon in 15 years, you can reap the benefits of compounding.

The minimum investment ticket size in a PMS is Rs.50 Lakh. If you choose to go with a PMS, you will have invest your entire corpus of Rs.50 lakh with only one portfolio management company. While many PMS companies have given outstanding returns, you will have to be able to select the right PMS for you.

If you choose to go with mutual funds, you can plan to invest in tranches and have flexibility to invest across different schemes and asset types to create a diversified portfolio that can be rebalanced over time to ensure you are on track to achieve your retirement goal.

You should consider taking advise from a certified financial advisor who can help you select the right PMS or mutual funds.