I have a stock portfolio of 8 cr nheritanced from my father, please adivse if i sell or keep it, i would like to sell n play safe n invest in fd n earn monthly interest, is it a good strategy, fyi i also work n get a monthly salary of 5lkhs, my goal is to reitre with 10 cr liquid cash plus some passive income
Ans: Current Financial Situation
Stock Portfolio: Rs 8 crore inherited from your father.
Monthly Salary: Rs 5 lakhs.
Retirement Goal: Retire with Rs 10 crore liquid cash and passive income.
Evaluating Your Strategy
Risk Appetite: You prefer playing safe. Understandable, but let's explore better options.
Fixed Deposits (FDs): They offer safety but low returns. Over time, inflation will erode your purchasing power.
Diversified Approach
Balanced Portfolio: A mix of equity and debt can provide better returns while managing risk.
Mutual Funds: Consider investing in mutual funds. They offer diversification and professional management.
Disadvantages of Fixed Deposits
Low Returns: FDs provide lower returns compared to other investments like equity.
Inflation Impact: Returns may not keep up with inflation. Your purchasing power decreases over time.
Advantages of Mutual Funds
Higher Returns: Equity mutual funds can offer higher returns over the long term.
Diversification: Mutual funds spread risk across various sectors and companies.
Professional Management: Managed by experienced fund managers.
Active Management Over Index Funds
Actively Managed Funds: They aim to outperform the market. Provide higher returns with professional oversight.
Index Funds: Simply replicate market indices. May not perform well in all market conditions.
Steps to Take
Consult a Certified Financial Planner: Get a professional assessment of your portfolio. They can guide you in consolidating and reinvesting.
Gradual Reinvestment: Slowly reinvest your stock portfolio into mutual funds. Ensure a balanced mix of equity and debt funds.
Maintaining Passive Income
Systematic Withdrawal Plans (SWP): Mutual funds offer SWPs. They provide regular income while keeping your principal invested.
Building the Retirement Corpus
Regular Contributions: Continue saving and investing a portion of your salary.
Review and Adjust: Periodically review your investments. Make necessary adjustments based on market conditions and personal goals.
Final Insights
Balanced Approach: Combining equity and debt provides better returns and safety.
Professional Guidance: Consult a Certified Financial Planner for a tailored strategy.
Long-Term Perspective: Focus on long-term growth and stability for your retirement corpus.
Inflation Protection: Ensure your investments can outpace inflation to maintain purchasing power.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
