Mutual funds are a very good tool for senior citizens to diversify investment risks, provide liquidity while still giving good inflation-adjusted returns over the long term, said Renu Maheshwari, Sebi registered investment advisor
What are the best investment options for senior citizens? Where should they park their hard-earned money? Well, senior citizens mostly prefer bank fixed deposits (FD), recurring deposits (RD), Senior Citizens' Savings Scheme (SCSS), Life Insurance Premiums. Apart from these they also invest in mutual funds.
What industry experts say, investing in a mix of gold, equity, and debt mutual funds should be looked at to earn better returns.
"Mutual funds are a very good tool for senior citizens to diversify investment risks, provide liquidity while still giving good inflation-adjusted returns over the long term. Senior citizens' portfolios should have an optimal mix of fixed income securities, gold, and equity," said Renu Maheshwari, Sebi registered investment advisor, CEO and principal advisor at Finzscholarz Wealth Managers LLP.
She further added that while there are post office schemes for senior citizens to get fixed returns, a mutual fund is the best vehicle for equity exposure. It provides inflation-adjusted market-linked returns to the investor with lesser volatility than individual stocks.
After securing contingency funds and cash requirements for five years of expenses in fixed income securities and debt mutual funds; equity mutual funds should be the most significant portion of senior citizen's portfolio. This is the only way to ensure inflation-adjusted returns over the long term during retired life, said Renu Maheshwari.
Senior citizens should focus on their required asset allocation and once having done that, consider mutual fund as one of the options. Mutual funds do offer certain benefits viz. SWP, ease of transaction, schemes with a combination of different asset classes - hybrid funds, easy liquidity etc, said Gaurav Mashruwala, the Sebi-registered investment advisor.
Investment advisor Amit Trivedi said those who do not have enough knowledge, skills, ability or time to manage their own money should consider taking advantage of mutual funds, including the senior citizens.
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