I am a 34-year-old individual with a balance of 1.75 crore INR in my savings account. As of now i do not have other investment also I have no outstanding debts and am looking to invest this amount wisely.
My investment goals are twofold: firstly, to secure 1 crore INR for my daughter's future when she turns 18, and secondly, to generate a monthly income to cover my expenses, which currently amount to 85,000 INR per month. I am willing to allocate my investment across different risk profiles as follows: 25 lakhs INR in high-risk investments, 50 lakhs INR in medium-risk investments, and the remaining 1 crore INR in moderate-risk investments.
Could you please advise me on a comprehensive investment strategy considering my goals and risk profile? Specifically, I am seeking guidance on asset allocation, investment vehicles, and any other considerations to achieve both capital growth and income generation.
Ans: With your substantial savings and clear goals, you're in a good position to craft a comprehensive investment strategy. Let's delve into a tailored approach.
For securing 1 crore INR for your daughter's future, a mix of moderate to low-risk investments could be ideal. Consider diversified mutual funds, fixed deposits, and possibly some portion in government schemes like PPF or Sukanya Samriddhi Yojana for her education fund. These avenues offer stability and reasonable returns over the long term.
To generate a monthly income of 85,000 INR, we need to focus on income-generating assets.Equity funds can indeed play a significant role in your investment strategy, especially for capital growth. Given your preference for equity, let's adjust the allocation accordingly.
For high-risk investments, you might consider allocating a substantial portion to diversified equity funds or sector-specific equity funds. These have the potential for higher returns over the long term but come with higher volatility.
In the medium-risk category, you can continue to diversify with a mix of balanced funds, which invest in a combination of equities and debt instruments. These can offer a balance between growth and stability.
For moderate-risk investments, you could include large-cap equity funds, which invest in well-established companies with stable earnings. Additionally, consider mid-cap and small-cap equity funds for potential higher returns, albeit with higher risk.
Remember, while equity funds offer growth potential, they also carry market risk. It's crucial to maintain a diversified portfolio across asset classes to mitigate risk.
Consulting with a Certified Financial Planner can help fine-tune your allocation and select the right equity funds based on your risk tolerance and investment horizon. By incorporating equity funds alongside other investment vehicles, you can pursue both capital growth and income generation effectively.
