Hi sir,
My age is 50 . I have around 35 lacs in Mutual funds and in stocks approx at 50:50 ratio . My stocks are not appreciating well as compared to mutual funds . As I am not able to keep myself updated in stocks as having my busy schedule from 9:00am to 8:00pm.
Besides this I have a saving of 30 lacs in PF and PPF .
Besides this I had some savings in postal fixed deposit which is going to be matured in next 4 months and the matured amount is around 60 lacs . I wanted to invest this amount in some mutual funds or with some savings instrument having an appreciation of approx 13-15 % .Pls guide me how should I invest this fund ? If you suggest for mutual fund , then pls suggest the fund types , and should I invest in lumpsum or SIP. If I am going for SIP. , then in how many months or weeks should I invest this total fD matured amount ? I am at present working in a private company with a monthly in-hand salary of 1.5 lacs .and I have no liability for next 8-9 years .
Ans: Current Financial Situation
At age 50, you have Rs. 35 lakhs in mutual funds and stocks, split evenly. Your stocks are not performing well. Your busy schedule from 9:00 am to 8:00 pm makes it hard to manage your stocks.
You also have Rs. 30 lakhs in PF and PPF, and Rs. 60 lakhs in a postal fixed deposit maturing in four months.
Your monthly in-hand salary is Rs. 1.5 lakhs, and you have no liabilities for the next 8-9 years.
Investment Goals
You aim to invest the Rs. 60 lakhs maturing from the fixed deposit. You seek an appreciation of 13-15% per annum.
Assessment of Current Strategy
Mutual Funds vs. Stocks
Your mutual funds are performing better than your stocks. Mutual funds are managed by professionals, offering better returns for those with limited time.
Existing Investments
Your PF and PPF provide stability and tax benefits. These are good for long-term security but offer lower returns compared to equity investments.
Recommendations for Improvement
Increase Mutual Fund Investments
Given your busy schedule, mutual funds are a better option than direct stocks. They are professionally managed and require less personal attention.
Types of Mutual Funds
Equity Mutual Funds: These funds have the potential for higher returns, aligning with your goal of 13-15% appreciation.
Actively Managed Funds: These funds can outperform index funds due to active management by professionals.
Investment Strategy
SIP vs. Lumpsum: Investing in mutual funds via SIPs helps mitigate market volatility. It averages the purchase cost over time.
Investment Period: Consider spreading the Rs. 60 lakhs investment over 12-18 months through SIPs. This approach reduces the risk of market timing.
Diversify Your Portfolio
Diversification: Invest in different types of equity mutual funds. This includes large-cap, mid-cap, and small-cap funds. Diversification reduces risk and can provide better returns.
Review and Adjust Regularly
Portfolio Review: Regularly review your investments. Adjust your portfolio based on performance and changes in your financial goals.
Consult a CFP: A Certified Financial Planner can help tailor your investment strategy to meet your specific goals and risk tolerance.
Final Insights
Your current investment strategy is good but can be improved. Shift your focus from direct stocks to mutual funds for better management and returns.
Invest the Rs. 60 lakhs from the maturing fixed deposit in equity mutual funds through SIPs over 12-18 months. This approach will help you achieve your target returns while reducing risk.
Ensure regular reviews and adjustments to your portfolio. Diversify your investments to manage risk effectively.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
