I have lump sum 5 lacs to invest for long term (15 yrs) capital creation for retirement. I am 50 yrs now. Shall I put all in a balanced fund? Moderate risk taker.
Sunny-If your goal is around 15+ years, then I suggest you to go for a large cap fund, small and mid cap fund and a balanced fund (to manage debt portfolio). Stick 30:70 ratio for debt:equity. Funds can be selected from my blog’s latest post “Top 10 Best SIP Mutual Funds to invest in India in 2016“.
Thanks a lot. So you mean lump sum can also be put with 15 yrs horizon although I am sure a sip would be better. Wili it be better to put this 5 lacs in a MODs savings account and start a SIP from this?
Sunny-If your time horizon is long term then put it in single shot. Simply people avoid lump sum scaring what if market start to go down the very next day. But they forget the idea of volatility in market. Investing in SIP currently may not feel the heat of such volatility. But let us say after few years, you accumulated around Rs.2 Cr, and suddenly the market crashed to 5%. Will you withdraw? No, because you kept it for long term. Those who not understand volatility try to go for SIP instead of lump sum. Rest is left with you.
Balanced fund also maintain debt:equity ratio more or less the same I hope (Eg: Franklin india balanced fund 30:65). I am just curious to know what additional advantages we will have if we buy one large, medium , small & debut funds in comparison to a Balanced fund except the diversification in equity portifolio which i can do it in balanced funds also buying 2 balanced funds instead of 1.
correct me if I am missing something in this !
You have control over your equity exposure, which may not be there with equity oriented balanced funds.