Money

MF Portfolio Doctor: How Neema can achieve his lofty money goals

Portfolio-Doctor-BCCL

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.

CASE I: Vivek Neema is saving for a house, his child’s education and retirement. Here’s the doctor’s advice.

Goals

Neema-goals

Investor’s existing portfolio

Neema-Portfolio

Portfolio check-up

  • Investing in equity funds for past 3-4 years. Portfolio not cluttered but needs streamlining.
  • Midcap funds are volatile but can be rewarding in long term.
  • Retirement goal of Rs 3 crore too ambitious. Cut to Rs 1.5 crore.
  • Start investing in NPS for retirement and save tax as well.

Note from the doctor

  • Don’t invest in too many funds. Avoid buying 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.

CASE II: Pallavi Kadole and her husband are saving for multiple goals. Here’s what the doctor has advised.

Goals

Kadole-goals

Investor’s existing portfolio

Kadole-portfolio

Portfolio check-up

  • Started investing early, but have too many goals.
  • Investor has surplus and can hike monthly investment by Rs 50,000.
  • After first education goal is met, direct SIPs for home renovation.
  • Even then, will need Rs 50 lakh loan for home renovation.
  • 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

Write to us for help

  • If you want your portfolio examined, write to [email protected] 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.

[“source=economictimes”]