September 24, 2021

The World Stock Markets Tips & Targets, News, Views & Updates

The World Stock Markets Tips & Targets, News, Views & Updates

MF portfolio doctor: Being a new equity mutual fund investor, Devkate must temper return expectations

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.

I: Sagar Devkate is saving for a house, kids’ education and retirement. Here’s what the doctor advised:
Goals

231

Investor’s existing portfolio

232

Portfolio check-up

  • Started investing in equity funds 2-3 months ago.
  • Funds are good but needs to temper expectations of returns.
  • Will need to take housing loan of Rs 20-25 lakh.
  • When house goal is reached after five years, the surplus can be channelised to other goals.
  • Small 5-10% increase in SIPs every year can help achieve all goals.

Note from the doctor

  • Retirement goals is too low at Rs 50,000 per month. Consider raising it to Rs 1 lakh.
  • Has not mentioned Provident Fund or other retirement benefits.
  • Review investments and rebalance portfolio at least once in a year.
  • Reduce risk when goal is near so that you don’t miss the target.

II: Hike SIPs by 10% annually to reach goals
Suresh Kumar is saving for his child’s education and his retirement. Here’s what the doctor has advised:
Goals

233

Investor’s existing portfolio

234

Portfolio check-up

  • Started investing in equity funds last year.
  • Goals are ambitious and will require regular hike in SIPs.
  • Retirement target of Rs 25,000 a month is too low. Consider hiking to Rs 50,000.
  • Has not mentioned other investments for retirement (PF, small savings, NPS).
  • Review investments and rebalance at least once in a year.

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


Write to us for help

If you want your portfolio examined, write to [email protected] with “Portfolio Doctor” as the subject. Mention the following information:
Names of the funds 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.

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