MF portfolio doctor: Singh must increase all SIPs by 10% every year to reach goals
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. Omkar Singh is saving for his child’s goals and his retirement. Here’s what the doctor has advised:
Goals: Portfolio check-up:
Investor’s existing portfolio: Note from the doctor:
Avoid investing in new funds or chasing yearly winners.
Review investments and rebalance at least once in a year.
Reduce risk when goal is near so that you don’t miss the target.
II. Increase investment or take a loan to purchase house Nalini Singh is investing in four equity funds to buy a house. Here’s what the doctor has advised:
Goal: Portfolio check-up:
Started investing in equity funds in early 2018.
All investments in red but no need for alarm.
Increase SIPs by 10% every year to reach target.
Corpus will be Rs 49 lakh in 10 years. Take Rs 39 lakh loan to bridge shortfall.
Review mutual fund portfolio at least once a year. Change if any fund’s performance slips.
Reduce risk when goal is near so that you don’t miss the target.
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)
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