MF portfolio doctor: Why Chaudhari needs to defer retirement or hike SIPs
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. Pravin Chaudhari is saving for his retirement. Here’s what the doctor has advised him:
Goals
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Portfolio check-up
Investing in equity funds for past 5-6 years.
Has a focused approach with seven equity funds in the portfolio.
Wants to retire in 10 years but will have to defer goal by two years.
SIPs will also have to hiked by 5% every year to reach goal.
In NPS, opt for corporate bond, gilt funds to cut risk faced by portfolio.
Property can be reverse mortgaged in case of shortfall.
Investor’s existing portfolio
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Note from the doctor
Cash should be put in debt funds to earn better returns.
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. Increase SIPs by Rs 8,000 to reach goals Sambit Dash is investing to pay off his home loan and other goals. Here’s what the doctor advised:
Goals
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Investor’s existing portfolio
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Portfolio check-up
Investing in equity funds for past 2-3 years.
Instead of saving to prepay loan, cut PPF contribution and hike home loan EMI.
Needs to hike monthly investments significantly to reach goals.
SIPs will also have to be hiked by 10% every year.
Review investments and rebalance at least once in a year.
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)
If you want your portfolio examined, write to etwealth@timesgroup.com with "Portfolio Doctor" as the subject. Mention the following information:
