The Economic Times daily newspaper is available online now.

    MF portfolio doctor: Rana should reduce contribution to PPF, increase equity mutual SIPs

    Synopsis

    The Portfolio Doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regard to the goals and, if required, recommends corrective measures.

    12-familyGetty Images
    You must review investments and rebalance at least once in a year.
    Not many investors know whether they have invested in the right funds and if their fund portfolio is on track.

    The Portfolio Doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regard to the goals and, if required, recommends corrective measures.

    The advice given is based on the performance of the funds, the risk profile of the investor as well as his financial goals.

    1. Nisha Rana is saving for her children’s goals and retirement. Here’s what the doctor has advised her:

    Goal
    23-1
    Portfolio check-up

    • Investing in a mix of equity schemes for past 3-4 years.
    • Holds too many funds. Needs to consolidate portfolio.
    • Goals are long term so cut contribution to PPF and invest more in equity funds.
    • Targets are high but can be reached if SIPs are increased by Rs 3,500 a month.
    • SIPs for goals will also have to hiked by 5% every year.
    • Retirement goal too low at Rs 30,000 per month. Increased to Rs 60,000 a month.

    Investment portfolio
    23-2
    Note from the doctor

    • Set realistic goal targets keeping inflation in mind.
    • Don’t invest too much in low yielding debt instruments.
    • Review investments and rebalance at least once in a year.
    • Reduce risk when goal is near so that you don’t miss the target.

    2. Defer retirement to build bigger corpus
    Shankar Baskaran is saving for his kids’ goals and retirement. Here’s what the doctor advised him:

    Goals
    23-3
    Portfolio check-up
    • Invests in well chosen funds, including those with global stocks.
    • Child goals need big increase in SIPs.
    • Early retirement at 50 not possible. Defer by 5 years to save more.
    • Retirement goal of Rs 30,000 a month seems low. Review target.
    • Keep close watch on funds with global exposure.
    • Review at least once a year. Reduce risk when goal is near so that you don’t miss the target.
    Investment portfolio
    23-4
    Assumptions used in the calculations
    Inflation
    Education expenses: 10%
    For all other goals: 7%

    Returns
    Equity funds: 12%
    Debt options: 8%

    (Portfolios analysed by Raj Khosla, Managing Director and Founder, MyMoneyMantra)

    If you want your portfolio examined, write to etwealth@timesgroup.com with "Portfolio Doctor" as the subject. Mention the following information:
    • Names of the fund you hold
    • Current value of the investment.
    • If you have SIPs running in any of them.
    • The financial goals for which you invested.
    • How much you need for each financial goal.
    • How far away is each goal.
    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

    (Your legal guide on estate planning, inheritance, will and more.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more

    (Your legal guide on estate planning, inheritance, will and more.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more
    The Economic Times

    Stories you might be interested in