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Am I investing in the best mutual funds

You are really creating an investment era by contributing significantly to all sectors of investors, thus playing a vital role towards fulfilling dreams of masses. Kindly keep up the good work. As conveyed earlier, I am a retired Technical Director from Govt. of India Deptt. Just aged 53 Years. Took Voluntary Retirement with no standing liabilities. I have invested my retirement proceeds in Debt and Equity Sectors as per attached Excel File. I am investing Rs 1,50,000 annually in PPF also. My Aim is to grow them significantly via investing in High Quality Mutual Funds over a long period of time. I would request you to kindly go through the attached Excel sheet and suggest me :- 1. Do you suggest and recommend to exit any Mutual Fund and invest in some other Mutual Fund, 2. This is my hard earned money, so safety of the money with quality growth is my aim, 3. Presently investing around Rs 1 Lac via STP on monthly basis in Equity Mutual Fund. Started all Investments from Feb 2016 in Direct Growth Mode, 4. Liquid Funds hold amount for investment in Equity fund only for 2-3 Months STP. Whether I should keep on investing even by using my funds from Debt Fund as I have read in your posts that investment in equities should continue for atleast 5 years to reap benefits through significant capital appreciation. I feel if I continue STP for 5 Years, I will have to use amount of Debt Funds, doing so will result in zero balance in Debt Fund, 5. Any Change in Mutual Funds Schemes (Exiting / Entering like investment in Gold ETF etc), 6. If any Change in Mode or amount of STP is required may kindly also be conveyed, 7. Kindly go through the details furnished and suggest appropriate line of action along with Timelines to create huge capital appreciation. I am an aggressive investor?

Apr 4, 2018 by Sat Paul Goyal,   |   Mutual Fund

At the outset, I thank you for the kind words about Advisorkhoj.

We have gone through the details of your current investments and found that you have not mentioned two things – What much risk you can take with your mutual fund investments and what is your time horizon. These two factors decide as to which category of mutual funds you should invest in.

However, please note the following suggestions against your query –

1. Your investment in PPF is good as it gives you assured returns with capital safety, therefore, it can be continued.

2. The equity schemes you are currently investing in via STP – the selection is largely good and we do not think you should make any changes in it. Your equity and balanced fund schemes fall largely into moderately high and high risk category.

3. We suggest holding the equity and balanced fund investments at least for 5 years but that does not mean that you need to continue your STPs upto 5 years. You can stop your STPs anytime you wish / or when the balance in liquid funds gets completely exhausted. However, given the current market situation and the upcoming elections next year, we think, markets may remain volatile and therefore, extending STP for a further period of 12-15 months could be a good idea. But in that case you will need fund to invest in liquid funds.

4. How to make provisions for liquid fund for continuing the STPs – We think you can redeem from ABSL Dynamic Bond Fund as this fund is not doing good at all.

5. You have considerable investments in debt fund but how long you want to hold them is the big question. As debt funds have also become volatile due to interest rate scenario etc. it is time you should rethink about these investments (excepting liquid funds/ ultra-short term funds as these may help you in meeting emergency needs etc. To know more about debt funds do read this - https://www.advisorkhoj.com/smf...

6. If your investment horizon is 4-5 years then shifting a part of the debt funds to equity savings fund could be a good idea as that can give a bit better returns with tax efficiency. Equity Savings funds are treated as equity funds. You can read this to know more about equity savings funds - https://www.advisorkhoj.com/articles/mutual-funds...

7. Long term staggered investments into equity and equity oriented mutual funds like balanced funds and equity savings funds can really create wealth over a long period of time. Therefore, you should re-think about your strategy of investing in debt funds.

Please note that above are our suggestions only and these are not financial advise. We think, you should consult a competent financial advisor as he or she may be in a better position to help you with your mutual fund portfolio.

Thanking you for writing to Advisorkhoj.

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