Investments Review & Investment Strategy

Q & A Forum › Category: Financial Planning › Investments Review & Investment Strategy

ravi a asked 10 years ago

Hi Sreekath, My age is 37 yrs; married; 2 kids (boy 2 yrs, girl 6 yrs); wife not working. Following are my percentage of savings invested:

Mutual Funds - 18.75%/Month (SBI blue chip, Birla SL Frontline Equity, HDFC Balanced, Prima Plus, Mirae Asset Emerging Bluechip, Franklin small co, DSP micro)
Term insurance - 13.75%/year
PPF - 6.25%/month
Sukanya Samrudhi Yojana - 15.63%
Chits - 28.75% (I'm expecting a 10 - 12 % profit here)
2L FD

My goal is to create maximum possible wealth in next 10 yrs from my savings. Even after above spending/investments, ~37.5% surplus amount remains every month in my account.

Should I invest more in Mutual Funds? If yes, increase by what percentage?
Could you please review my investments strategy and let me know your thoughts?
Is investing in chits a good investment? Could you please write a blog on this topic?
Where should I invest this ~37.5% surplus amount? I already have a home loan running where outstanding principal amount is 20L. Should I spend this surplus amount to prepay my home loan or invest in mutual funds? Prepaying early will not let me take advantage of section 24 tax exemption.

Thanks, Ravi A

4 Answers

0 Vote Up Vote Down

Sreekanth Staff answered 10 years ago

Dear Ravi,

May I know if you have Personal Accident insurance cover?
Is your family (four of you) covered with adequate health insurance cover?

Existing MFs: Kindly check MF portfolio overlap between SBI Blue chip & Birla Frontline funds and between Franklin Small cos & DPS micro cap funds. (All the funds are good ones, but it is better to trim down the num of funds if the overlap % is very high). Kindly read: http://www.relakhs.com/mutual-fund-portfolio-overlap-comparison-tools/ Chit Funds: Personally, I avoid investing in Chits. Kindly note that the returns on Chit funds depend on many factors. Hope you have invested in a company which is registered. When we have other and better investment options which are well regulated, flexible & managed transparently, don't you think that it is better to reduce the allocation to Chit funds?? Kindly re-think. To be frank, I have been thinking to write on Chit funds for the last 8 months or so. In fact, I have written half and some how left it in mid-way, will surely try to publish the article at the earliest. Home loan If you believe that you have not allocated sufficient savings towards your high priority goals like Retirement & Kids' higher education goals then do not be in a hurry to pre-close the home loan. You may let it continue. Download the calculators available in the below articles and calculate approx savings required towards these goals; http://www.relakhs.com/retirement-planning-calculator-3-easy-steps/ http://www.relakhs.com/calculate-kids-education-goal-amount/ Kindly go through below article without fail; http://www.relakhs.com/personal-financial-planning-articles-list/

0 Vote Up Vote Down

ravi a answered 10 years ago

Hi Sreekanth, Thanks for your immediate response. I've not yet taken any PA policy yet...posted my query here on the same and waiting for your response. I will review my investment in Chits and see if some amount can be diverted Mutual Funds in future. Frankline and DSP overlap is 16%; I think i'm good here. SBI Blue chip and Birla SL frontline Equity is 41%; This does not seems to be very high. As I'm investing more amount in large cap compared to other funds types, I'm little scared to choose single fund in large cab :). Do you still suggest me to choose single one in large cab? If yes, which one? I really appreciate for posting all the useful links, I will go through them today. Regards, Ravi A

0 Vote Up Vote Down

Sreekanth Staff answered 10 years ago

Dear Ravi, I have answered your queries related to Insurance planning here.

0 Vote Up Vote Down

ravi a answered 10 years ago

Thanks for the immediate response. Regards, Ravi A.