I have started investing 25000/month from Jan 24 in MF, I go on purchasing 5 Different funds of 5000 per month is it right or should I stick to some 5 funds with sip, every 6month's I will increase my investment by 10% my age is 47 and at 56 I am looking to get 1CR corpus
Ans: Evaluating Your Investment Strategy
Introduction
Congratulations on starting a disciplined investment journey. Investing ?25,000 per month and planning to increase it by 10% every six months shows a strong commitment.
Current Strategy Assessment
Investing in five different mutual funds each month is a diversified approach. However, consistency is key in mutual fund investments.
Benefits of Systematic Investment Plans (SIPs)
SIPs offer the advantage of rupee cost averaging and discipline. Sticking to a set of funds through SIPs ensures regular investments without market timing.
Diversification and Consistency
Diversification across different mutual funds is beneficial. However, investing in too many funds can lead to overlap and management challenges.
Recommended Approach
Stick to Consistent SIPs: Choose five well-performing funds and invest consistently in them via SIPs.
Review and Rebalance: Regularly review your funds' performance and rebalance if needed. This keeps your portfolio aligned with goals.
Fund Selection
Choose funds that align with your risk tolerance and financial goals. A mix of large-cap, mid-cap, and multi-cap funds can provide balanced growth.
Suggested Allocation
Large-Cap Fund: ?5,000
Mid-Cap Fund: ?5,000
Multi-Cap Fund: ?5,000
Balanced Advantage Fund: ?5,000
Debt Fund: ?5,000
This allocation provides exposure to different market segments, ensuring diversification and stability.
Increasing Investments
Your plan to increase investments by 10% every six months is excellent. It leverages the power of compounding and accelerates wealth creation.
Example
Starting with ?25,000 and increasing by 10% every six months can significantly boost your corpus over nine years.
Achieving the ?1 Crore Goal
Your goal of accumulating ?1 crore by age 56 is achievable with disciplined investing and regular reviews.
Estimated Returns
Assuming a moderate annual return of 12%, your increasing SIP strategy can help you reach your target. The key is consistency and regular increments.
Monitoring and Adjusting
Regularly monitor your portfolio's performance. Make adjustments based on market conditions and fund performance. Consulting a Certified Financial Planner (CFP) can provide personalized guidance.
Professional Advice
A CFP can help you navigate market complexities, select the right funds, and make necessary adjustments. They offer tailored advice aligning with your financial goals.
Conclusion
Sticking to a consistent SIP strategy with a mix of funds and increasing investments regularly is a prudent approach. Regular monitoring and professional advice can help you achieve your ?1 crore goal by age 56.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in