Dear sir,
I was greatly impressed by the direct and forthright advice being given by you to various readers.
I am retiring from govt service this month and will receive about Rs40 lakhs as benefits, apart from an ample monthly pension. I have no dependents. I have been an avid investor in various mutual funds for nearly 15 years and also invest directly in stocks. I have made mistakes but also learnt many lessons from them. Suffice it to say that over the years I have built a vast corpus and can live comfortably even without touching these investments. It helps, of course, that I lead a simple life!
I intend to invest the money I get (rs 40 lakhs) in a Liquid/ Arbitrage/ MIP fund (growth option) and then use STP to move the money to equity funds, perhaps 1 large cap, 1 mid and small cap, 1 diversified, 1 balanced and 1 tax saving fund. I could also spread the risk by investing in 2 Fund houses. My questions are:
- Do you suggest the rs 40 lakhs lumpsum to be initially invested in a Liquid or Arbitrage or MIP growth or distributed / invested in some other way, based on the present interest rate scenario and other factors? I am not too familiar with debt funds and would appreciate any input about specific funds. I am a moderate to high risk investor, despite my age, mainly because I will not (hopefully) need the money in my life time and am, therefore, a long term investor, so to say. I will be in the 10% tax bracket now.
- What should be the amount of STP , assuming I pick 5 funds for STP from the debt fund? Even if all the monthly STPs come to Rs 20,000 it would take years to shift the total amount to Equity funds. I repeat, I am a long term investor, not dependent on the money and believe that the Indian economic growth story is unfolding in a great way.
- I look forward to your suggestions and advice, both general as well as suggesting names of specific funds . Vanaja Reddy
1 Answers
Hi Mam,
"Leading a simple life" is the key point that we (most of us, especially the youngsters) have to learn and follow..
1 - Considering your profile, you may pick Liquid funds & aggressive MIP Funds for setting up STPs to Equity fund portfolio.
2 - I too believe that we as a country are in a sweet spot and poised for great growth over the few decades (of course this may come with volatility as we are part of a world ).
Suggest you to set up STP for 2 to 3 years. Also, you may pick just one ELSS fund which can also be a multi-cap fund.
Kindly note that STPs are treated as normal redemption hence taxes (if any) on capital gains (if any) are applicable.
Suggested readings :
https://www.relakhs.com/debt-funds-types-benefits-risk-vs-return/
https://www.relakhs.com/best-debt-mutual-funds-india-top-debt-funds/
https://www.relakhs.com/best-monthly-income-plans-india-mutual-funds/
https://www.relakhs.com/best-mutual-fund-schemes-2017/
https://www.relakhs.com/best-mutual-fund-scheme-risk-ratios/
https://www.relakhs.com/mutual-fund-portfolio-overlap-comparison-tools/
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Thanks, sir, for the amazingly prompt response! Any particular Liquid/ Aggressive MIP schemes or fund houses you could suggest? Thanks. Vanaja Reddy
Hi ..Suggest you to kindly go through the mentioned articles, you may find them useful.
Thanks, will study in detail and plan accordingly.