First of all thank you for the information you are sharing on your blog. Its really helpful and educative for people like me.
Am 31 right now and would like to generate corpus for kids education, marriage and retirement. I have emergency fund and investment in form of gold already. From this year I would like to plan investing 30% of my pay in MFs in SIP route for long term > 10 years.
Following is my current profile. Can you please review it and let me know if I need to make any modifications.
I have SIP for 5k in each of the following funds
- Axis Long Term Equity – ELSS
- Tata Balanced Fund – Direct Plan (G) – Balanced
- Franklin India Prima Plus Fund – Direct Plan (G) – Diversified Equity
- SBI Pharma Fund – Direct Plan (G) – Sector Pharma
- DSP BlackRock Micro Cap Fund – Direct Plan (G) – Small and Midcap
- PPF 5K …
A total of 25K pm with 5K as SIP amount is being invested. Are the funds good?
All funds above are into equity. Is it advisable to invest in so many funds. Shall I continue investing in these?
Going by your advise on having investments in the ratio of 70:30 in equity:debt …
I am looking at investing 10k more in debt funds.
Can you suggest me any 1 or 2 funds in debt funds. I was considering Birla Sunlife MIP II Wealth 25 Growth plan .
I also have 2L lumpsum amount that I wish to put with time frame of 3-5 years. Which would be best option to park this money for capital protection and best returns.
Gold as an emergency fund? Think twice. 30:70 rule applies to those goals which are more than 10+ years. In your case, I suggest 50% to 60% in debt and rest in equity. So invest around Rs.10,000 into equity and rest Rs.15,000 into short term or ultra short term debt funds (NOT MIPs too). Regarding equity, 2-3 funds enough. One you selected for tax saving. You continue that. Along with that add one large cap like Franklin India Bluechip and one small and mid cap fund like HDFC Midcap OPP or Franklin India Prima Fund. These two funds enough. Never go with sector funds, which you currently investing. Be a safe player.
Regarding lump sum investment, use 50% in Arbitrage Funds and another 50% in short term or ultra short term debt funds.