I am 71 years old. I live on dividends earned from Mutual Funds. My funds are HDFC and Edelweiss Balance Advantage funds, HDFC Dividend Yield Fund (Growth), Axis Value fund (Growth) and Franklin Tempelton Build India Fund (Growth). At the moment small amounts are invested in the growth funds. Should I continue with the Growth Funds or go for SIP?
Ans: At 71, it's crucial to strike a balance between growth and stability, especially when your income relies on dividends from Mutual Funds. Your current portfolio includes a mix of balanced advantage, dividend yield, and growth funds, which offers a diversified approach.
Growth funds inherently carry more volatility due to their equity exposure. While they offer potential for higher returns, they also come with higher risk. Given your age and reliance on dividends, it might be prudent to reconsider the growth funds.
Switching to a systematic withdrawal plan (SWP) from your existing funds could be a more suitable strategy. This way, you can enjoy a regular income stream while preserving your capital.
Alternatively, if you wish to continue with growth-oriented investments, consider shifting a smaller portion of your investments to growth funds via SIPs. This approach allows you to dollar-cost average, reducing the impact of market volatility.
Remember, your investment decisions should align with your financial needs, risk tolerance, and goals. Consulting a Certified Financial Planner can provide personalized advice tailored to your situation. Whatever you decide, prioritize preserving your capital and maintaining a steady income stream to support your lifestyle in retirement.
