Pradeep Sharma is saving for multiple goals. Here’s what the doctor has advised him:
- Started investing in ELSS funds to save tax nine years ago.
- Added more schemes after good experience with ELSS.
- Tends to invest in top performing schemes, but doesn’t get rid of earlier ones.
- Hence, he holds too many funds. Portfolio is too cluttered.
- Needs to remove underperformers and overlapping schemes.
- House purchase goal is near, so he must shift to the safety of fixed income.
- Car purchase and foreign holiday goals not included in analysis.
- Avoid investing in more funds. Just 7-8 funds are enough.
- Take Rs.2 crore life insurance to secure all financial goals.
- Build emergency fund to tide over unexpected expenses.
Note from the doctor
- Fund portfolio has small-cap skew. Be ready for high volatility.
- Go for balanced allocation in the NPS portfolio.
- Review investments and rebalance at least once in a year.
- Reduce risk when goal is near so that you don’t miss the target.
WRITE TO US FOR HELP
If you want your portfolio examined, write to email@example.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.