Investing is easy! Figuring out ‘where to invest’ is the hard part. Irrespective of my quantum of earnings, I have been judiciously saving money for making investments.
As I opined, it can be a challenging task to identify right financial investments. I too learnt the investment lessons the hard way only.
I have been investing in Equities since 2003 and Mutual Funds from 2009 onwards. A major chunk of my investible surplus now goes towards mutual fund investments for two of my important financial goals i.e., my Son’s higher Education (six years to go) and my retirement (wealth accumulation).
Below is the investment planning process that I follow without fail for my financial goals.
My Latest Mutual Fund Portfolio
My previous article on ‘my MF picks‘ (published in June, 2015) I had mentioned below mutual fund schemes as part of my portfolio;
- Short Term Goal
- Aditya Birla Sun Life Regular Savings Fund (erstwhile Aditya Birla MIP II Wealth 25 Plan)
- Medium Term Goal(s)
- HDFC Hybrid Equity Fund (erstwhile HDFC Balanced Fund)
- Long Term Goal
- Axis Long Term Equity Fund
- TATA Balanced Fund
- UTI Mid-cap Fund
Over the last 4 years, I have redeemed units of Birla Regular Savings Fund and utilized the proceeds, have redeemed units of TATA Balanced fund and re-invested in HDFC Hybrid Equity Fund.
I have also moved out of UTI Mid-cap Fund and started investing in Franklin Smaller Companies Fund since May, 2016. (Kindly note that I have remained invested for more than 6+ years in TATA & UTI fund before churning my portfolio).
I have very recently added UTI Nifty Next 50 Index Fund to my portfolio (from May 2019).
So, my existing mutual fund portfolio has below investments..
Some more important points on my investment planning & strategy..
- You can notice that I am currently not investing in any Debt Mutual Fund Scheme(s).
- For Emergency Fund, we (family) used to invest in Fixed Deposits & Liquid / Arbitrage Funds. We now prefer to keep the ‘rainy day fund’ in Bank Fixed Deposits only.
- I follow a combination of SIP + Lump sum investment strategy. Off-late, my SIP amounts are meager and prefer to invest additional sum whenever financial markets give us an opportunity.
- Besides Emergency Fund (Cash Fund), we also maintain a ‘Crash Fund’ to invest lump sum amount (additional investments) in MF portfolio & Equities whenever there is a market crash/downturn.
- Whenever I review the performance of my mutual fund portfolio, I give first priority to check my overall Portfolio returns. I do not initially get too worried about the not-so-good performance of individual Fund/scheme.
- I prefer to compare my Funds’ performances primarily with their Benchmark returns and not with its Peers. Trust me, the best performers list keeps changing every year, so the best strategy is to stick to consistent performers and also the Funds with decent ‘downside protection’.
- I make sure that I keep an eye on ‘who are the fund managers’ of the MF schemes that I have invested in.
- As much as possible, I make sure that overlap % among my Equity Mutual Funds is reasonable. It should be as little as acceptable because if there is a 50-70 per cent overlap then this diversification (holding multiple funds) is only optical. Actually, there is very less diversification. In case of equity, the least of overlap is more desirable. (But, do note that the Fund Portfolios do change over a period of time, so keep keep a track of overlap %.)
So, are these the only best Mutual Fund Schemes to invest for your financial goals? – The answer is NO. These are just my Picks.
Please note that the above mentioned Mutual fund investments are done based on my financial risk profile and goals. This article is for information & knowledge sharing purposes only. If required, kindly take help of a Registered Investment Advisor in designing a Portfolio that is based on your requirements.
Continue reading :
- My Latest Stock Portfolio | Direct Equity Investments (Shares)
- Top Mutual Fund Schemes to invest in 2019 | Best Equity Funds for Long-Term
- List of all Popular Investment Options in India – Features & Snapshot
- Long Term Investment Horizon : Importance & Benefits | My father’s risky investments! (Real-life examples)
- Mutual Fund Investments are subject to Market Risks! – My opinion
(Image courtesy of iosphere at FreeDigitalPhotos.net)(Post published on : 21-June-2019)