Skip to main content

Customize your Portfolio

Download Tax Saving Mutual Fund Application Forms

Invest In Tax Saving Mutual Funds Online

Buy Gold Mutual Funds

Leave a missed Call on

94 8300 8300

 

Customize your Portfolio



Often financial planners are asked questions like ‘where should I invest?’, ‘How much should I invest?’, ‘Does investing in gold still makes sense or is real estate the next big sector?’, ‘What should be my asset allocation given my age and profile?’ and so on. However, there is no generic answer to any of them, because for each individual, depending on several factors, the answer could be different. It is like asking a doctor which medicine one should take without actually knowing what the illness is. A right portfolio mix is highly specific to each individual/family and has to be customized and not generalized. Here we will try to look at how one can go about choosing the right portfolio mix.


Why should I invest?


Often people have a blank look when I ask this question as most people are not clear about the goals for which they should invest. Investing only for returns cannot be a single point agenda because your milestones will decide the amount of investment, the magnitude of risk that you can take and the volatility that you can bear. So the first step is to pen down your goals, why you need to invest and when do you need the money. The basic rule is that you can’t keep your investments in volatile assets when you are nearing your goals.


Understand nature of assets


Understanding the behavior of an asset class is very crucial in asset allocation. They are broadly classified as follows:

 

Equity: Investing in equity is like investing in a business venture. It is volatile in the short term but in the long term it generally tends to beat inflation and in effect help us build wealth. However, this asset should be looked at from a long term perspective only, that is five years or more. Investing in this asset systematically makes a whole lot of difference in generating a better risk adjusted return and should be the preferred mode of investing.


Debt: These are assets which more or less give an assured return, like fixed deposits (FDs), recurring deposits (RDs) etc. However, not all debt products give a guarantee and depending upon the nature of the asset could be quite volatile as well. Debt is chosen for their stability and liquidity but they tend to generate returns below inflation in most of the cases and so too much exposure in this asset class can actually erode wealth in the long term.

 

Gold: This seems to always retain its luster in India. However, if this asset is bought as a jewelry it comes with a huge emotional quotient and is generally not traded. Hence investments via the gold ETF route could be more productive. Gold is highly liquid and can help balance the portfolio. So it is important that the proportion should be maintained to a maximum of 5% in ones portfolio.


Real Estate: This is a completely non-regulated market and prices move as per the seller’s perspective of his property. It can give good appreciation but is extremely illiquid and the tax implications should be known before one invests in real estate.

Liquid Money: This is the money lying in savings account which is to be used for day to day expenses. Although highly liquid, it attracts very low interest rate.


Combine assets with milestones
This is the most crucial step in the entire exercise and the services of a planner may come in handy in having a financial plan. The most important aspect of financial planning is that assets get linked with goals and money needs to be available readily to fund them once the milestones come close. A mismatch in the same can be harmful to the entire financial planning exercise. For example, a real estate is assigned to a child’s future education but when the goal comes close either the asset may not get a ready buyer or the amount needed falls short of the property value. In such cases there could be a distress sale and the customer might end up paying huge capital gains on the same.


A right portfolio mix is indeed crucial for the well being of a financial plan but this has to be a well thought out plan keeping the final goals in mind. Else too much allocation to one asset class might give good returns but might also jeopardize the entire financial planning process.

For further information contact Prajna Capitalon 94 8300 8300 by leaving a missed call

Leave a missed Call on 94 8300 8300

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap FundsInvest Online

      1. DSP BlackRock MicroCap Fund

2.Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Popular posts from this blog

Real Returns in Investing

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Real Returns in Investing     A Anil Singh (name changed), 44, works with a private company and believes in investing his entire savings in fixed deposits. His financials from the year 2000 till date is given in the table. Anil's savings in FDs gave him an average return of around 8%. The total amount saved over the 174 months (From January 2000 to June 2014) is Rs 49.80 lakh. The value of his investment today is around Rs 66.71 lakh. Naveen Singh (name changed), 44, works in a similar profile like Anil. However his expenses were on the higher side. His financials are as in the table. Naveen invested only in equities. The total amount saved over the 174 months (From January 2000 to June 2014) is Rs 38.40 lakh. The v...

Budget 2014 Highlights for Saving

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   The new finance minister Arun Jaitley has just presented his first budget. What measures does the budget contain that will specifically impact savers and investors? Here they are: 1. Housing loans exemption for self-occupied properties increased to Rs2 lakh: Earlier this amount was Rs1.5 lakhs. This move barely keeps pace with the inflation in asset values.   2. Investment limit under 80 (C) increased to Rs1.5 lakh: This is a good move again and offers some relief to taxpayers.   3. IT exemption increased to Rs2.5 lakh, Rs3 lakh for senior citizens. This comes as a minor relief for taxpayers.   4. Annual PPF ceiling to be enhanced to Rs1.5 lakh, from Rs1 lakh: This is in tune with the change in 80C.   5. Long term capital gains tax for debt funds has been rai...

ICICI Prudential MIP 25 - Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential MIP 25     (CRISIL Rank 2)   This scheme was launched March 2004. Please see the chart below for the one, two, three and five years annualized returns from this scheme. The minimum investment in the scheme is Rs 5,000. The asset allocation of the portfolio is 24% equity, 72% debt and 4% cash equivalent and others. Please see the chart below for the monthly dividends declared by the scheme, on a per unit basis, over the last 5 years.   For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call Leave a missed Call on 94 8300 8300 Leave your comment with mai...

Franklin India Smaller Companies Fund - Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Franklin India Smaller Companies Fund   While the universe of small-cap stocks in India is vast, there are very few equity funds which take on the task of sifting through this space for good long-term bets. Franklin India Smaller Companies Fund has managed this with aplomb. What we like about this fund is its significant out-performance of its category and benchmark over the last four years, and its ability to moderate portfolio risk despite investing in the riskiest segment of the equity market. This fund's stock selection strategy, like that of Franklin India Prima Fund is focused on finding companies that generate positive cash flows across business cycles. High return on investment and manageable leverage are also filtering criteria. Says R. Janakiraman, fund ma...

How to open a Capital Gains Account?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to open a Capital Gains Account? You can open a capital gains account in an authorized bank. The Government has notified 28 banks which can open the Capital Gains Account on behalf of the Government. You have to apply for opening the account by filling out the required application form (Form A) and submit proof of address, PAN card and photograph. You cannot withdraw funds from a capital gains account using a cheque book or ATM, like you do in your normal savings bank account. There are procedures to be followed to withdraw funds from the capital gains account. Investment in Specified Bonds Section 54EC of Income Act provide that if the seller invests whole or part of capital gains arising from the sale of asset in specified Capital Gains, within a period of six months of the ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now