Investment plan - Suggestions

Q & A Forum › Category: Financial Planning › Investment plan – Suggestions

Mohanan asked 6 years ago

Dear Sir, My name is Mohanan, I would like to request your suggestion on mutual fund or other investment options. I am 48 years old and wish to take moderate risk and I would like to invest 40 lac for below purposes. my investment horizon is 7 years. 20 lac - I wish to invest for my monthly income ( I will keep invested this at least 5 years) and I am expecting at least 8% return per year and same time dont like to see much volatility/loss in capital corpus. 20 lc- I wish to invest to create wealth and will need this corpus back only after 5 to 7 years. Kindly advise at least 4 funds for each purposes or other alternative investment options Thank you. Mohanan A

6 Answers

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Sreekanth Staff answered 6 years ago

Dear Mohanan,

If your investment objective is 'safety of capital' then suggest you to stick to Bank FDs, Post office small saving schemes. Ex : PO MIS, Tax Free Bonds, Bank FDs. 7.75% GoI bonds.
Are you willing to take risk for your second goal?

Kindly read :

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Mohanan answered 6 years ago

Dear Sree Sir, Many thanks for your prompt reply. For the first goal, considering the inflation, is there any other options to get better return, if I take moderate risk and can hold the investment for long time, as I will keep this money only for my long time monthly incomes. For second goal, I can take risk and can hold the investment for 5 to 7 years, as I will need that money only after that said time. Thank you, I looking forward your kind suggestion/ideas Mohanan A

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Mohanan answered 6 years ago

Also Sir, for the monthly income, Tamilnadu power finance corporation is offering 8.25%, interest paying monthly for 5 year deposits. Is it safe? or is there any default risk . Thank you

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Sreekanth Staff answered 6 years ago

Hi,

There is a default risk with any Company. As long as it goes good, everything looks fine.

If you are willing to take some risk, can consider Secured NCD (debentures) for short periods like 2 to 5 years. For ex: Like recent issues of NCDs from L&T, TATA capital, M&M etc., If you are in high tax bracket, you can also have a look at some Tax Free Bonds. For now, advisable to avoid Company/corporate FDs. Related article : Best Company Fixed Deposits 2019-20 | Should you Invest? 2) If you are willing to take moderate risk and your investment horizon is around 7 years, can consider investing in Balanced advantage funds and Hybrid Equity Funds.

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Mohanan answered 6 years ago

Good Morning. Thank you Sir, well noted. Fyi, the mentioned Tamilnadu power finance corporation and Tamilnadu Transport Development Finance Corporation Ltd are backed by Tamilnadu Govt and are offering 8.25% for 5 year deposits and paying interest monthly. If possible, Kindly check and advice about the safety of investments with them. Thanks.- Mohanan

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Sreekanth Staff answered 6 years ago

Dear Mohanan, Yes, I am aware of the mentioned FD scheme. Kindly understand the risks associated with Corporate FDs as shared in one of the links. If you are comfortable, you may go ahead for short-term.