Lump sum Investment options

Q & A Forum › Category: Financial Planning › Lump sum Investment options

rohit asked 9 years ago

Hi Sreekanth, I recently came across this site and I am impressed by the variety of investment options you have covered. I am looking to start investing my savings which have till now been idling in savings a/c. Rs. 5 lakh in India (growing at 4%) and Rs. 30 lakhs in US( growing at 1 %). Can also add approx. 1 lakh monthly from my future projected savings. Since the markets are close to peak, was vary of directly jumping into the equity funds with the whole capital. Hence was thinking of putting the money in one of the debt funds you suggested in your articles - Birla sunlife short term fund(decided against GILT funds after the recent RBI rate status quo) and start a STP to one or two of the equity funds - ICICI Prudential Value Discovery Fund (any other recommendations?) Also was planning to invest in these through my demat a/c in ICICI where i have stocks worth 3.5 lakhs (showing overall loss of - 2 lakhs) invested 7-8 years back. Would this be the best route or should i try MF utility? Some more background about myself, 34 yrs old. Have 2 non-earning dependents. Currently in US for past 2 years, don't have any other income/liabilities in India. Have a life insurance of around Rs. 2.5 lakhs which is almost paid up. Don't have any other insurance apart from the one which my employer provides which is linked to my employment with them. Objective is long term wealth creation,retirement fund and to meet unforeseen expenses. Don't have any other big purchase plans as of now. Would be eager to know your valuable advice on how to go about starting serious investment. Thanks Rohit

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Sreekanth Staff answered 9 years ago

Dear Rohit, 1 - Your high priority action item would be, to get adequately covered with a Term life insurance plan. Read : Best Term insurance plans. If life is UNPREDICTABLE, insurance cant be optional. 2 - Get adequate health insurance cover (depending on your existing work place terms & conditions) for self & family. 3 - Plan for your Retirement goal. Kindly read : Retirement planning & calculations.. 4 - If your stocks are not worth holding, sell them and re-invest the monies in Equity funds. Read: Best Equity funds. How to pick best and right mutual funds Schemes? List of investment options. Based on your query, I believe that you do keep a track of Indian Financial markets & events, appreciate that. You may revert to me, if you need more info :)

rohit replied 9 years ago

Thanks for the update Sreekanth, will work on getting an insurance. Not sure if the coverage covers individuals outside India.
For the initial lump sum investment, is the approach i was thinking of starting through a short term debt fund and slowly migrating to equity funds the right approach?

Read more about direct funds through MF utility and it definitely looks like a more profitable option compared to the demat a/c. Another person had mentioned Invezta in the comments section. Any comparison on these tools for direct funds?
Usually not very up to date on the Indian markets, however since I have decided to start investing now, just catching up.
Most of the information is available on this site, its only the variables like current economic and market conditions which we need to explore outside 🙂

Regards
Rohit

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Sreekanth Staff answered 9 years ago

Hi, 1 - Yes, NRIs can get Term insurance cover from Indian insurer and it is valid. 2 - You can set up STP (Systematic Transfer plan) from Liquid fund (Debt funds) to respective fund house Equity funds. 3 - Invezta, is a decent platform, one needs to pay nominal charges to make investments in Direct funds. Read: Important Macro Economic factors that an Investor needs to track !!

Sunny replied 9 years ago

Dear Srikant, my father wants to gift his grandson, just turned 18, about 20 lacs of his FD. SBI Bank advised to put money in their Magnum balanced fund instead of an FD in son’s name to avoid tax implications. Can u give your views on best possible route. Thanks

Sreekanth Staff replied 9 years ago

Hi…Equity mutual funds are one the best investment avenues for long-term. SBI balanced fund is a good option. But you may consider 2 to 3 funds instead of just one fund.

Kindly post your queries as a separate Question. Plz click on ‘Ask question’ on top menu bar to publish your Questions. Thanks!

rohit replied 9 years ago

Thanks Sreekanth