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MF portfolio doctor: Why Panja needs to cut retirement corpus target, add equity to savings

When investing for multiple financial goals, starting early is the first and perhaps the most important step. Subhasis Panja is saving for multiple goals. Here’s what the doctor has advised him.

ET CONTRIBUTORS|
Updated: Nov 18, 2019, 11.48 AM IST
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Panja has built a sizeable but cluttered portfolio. Must cut number of funds.
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. Subhasis Panja is saving for multiple goals. Here’s what the doctor has advised him:

Goals
26-1

Portfolio check-up

  • Investing in equity funds and stocks for several years.
  • Has built a sizeable but cluttered portfolio. Must cut number of funds.
  • Split stock holdings into three baskets for different goals.
  • All goals can be reached if savings are hiked by 5% every year.
  • Retirement target of Rs 6.2 crore pared to Rs 4.2 crore to make it feasible.

Investor’s existing portfolio
26-2

Note from the doctor

  • Don’t invest in too many funds. Just 5-6 funds are enough.
  • Avoid sector, thematic funds. Diversified funds are better.
  • 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. Don’t wait to invest large sums at one go
Vidushi Khatri invests for a mix of short, medium and long-term goals. Here’s the doctor’s advice:


Goals
26-3

Investor’s existing portfolio
26-4

Portfolio check-up

  • Started investing in mutual funds four months ago.
  • SIPs must be increased significantly to reach goals.
  • Intends to retire early so corpus required is bigger.
  • Not mentioned investments such as PF, NPS.
  • Review mutual fund portfolio at least once a year. Change if any fund’s performance slips.

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:
  • 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.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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