Portfolio for Lump sum Investment of Five Lakh

[sndpkchr]

I have put the allotment as:

Large Cap:- HDFC Top 200 (1 Lakh)

Value based Fund:- UTI Dividend Yield (1 Lakh)

Balanced Fund:- HDFC Prudence (1 lakh)

Hybrid Asset Allocation:- FT Dynamic PE Ratio Fund of Funds (1 Lakh)

ICICI Fixed Deposit:- Rs 51,000

Saving Account:- Rs 49,000

All investments are one time investments in this month only as I had some spare moolah to invest so there was no point to hold on the money with me. Is investing Lump sum instead of SIPs a good strategy? If not what are the possible pitfalls?

 

[loke4300]

Is investing Lump sum instead of SIPs a good strategy?

No. trying to time the market is difficult and unnecessary task.

Your lumpsum investment locks you in at a particular index level [nav].

in my opinion there is a 70-80% chance that we may see correction, thanks to the Euro problem. Nifty may dip below its 200DMA making the scene bearish.

It is also possible that we may languish in a bearish territory for a long long time....

so SIP should be your priority. HDFC MF has a flexi index plan where you can switch your funds to top200 at predetermined levels. link here

best wishes

 

[sndpkchr]

Thanks for the prompt response. But I have done these investments keeping a long term horizon of at least 5-7 years which I think should be good enough to get the Sensex levels good enough to give reasonable returns.

Meanwhile, I have to invest another 5 lakhs in MFs. Can anybody suggest a good enough portfolio for that. What about my choice of funds.

 

[nikrod]

No. trying to time the market is difficult and unnecessary task.

Your lumpsum investment locks you in at a particular index level [nav].

in my opinion there is a 70-80% chance that we may see correction, thanks to the Euro problem. Nifty may dip below its 200DMA making the scene bearish.

It is also possible that we may languish in a bearish territory for a long long time....

so SIP should be your priority. HDFC MF has a flexi index plan where you can switch your funds to top200 at predetermined levels. link here

best wishes

Agreed. Go for SIP while investing in equity funds. You can also park your money in debt funds and do STP in Equity funds.

 

[drsambu123]

No. trying to time the market is difficult and unnecessary task.

Your lumpsum investment locks you in at a particular index level [nav].

in my opinion there is a 70-80% chance that we may see correction, thanks to the Euro problem. Nifty may dip below its 200DMA making the scene bearish.

It is also possible that we may languish in a bearish territory for a long long time....

so SIP should be your priority. HDFC MF has a flexi index plan where you can switch your funds to top200 at predetermined levels. link here



best wishes

To do STP one more alternative to Flexindex plan is HDFC flex STP( more or less same but there is a formula to decide the STP amount by the fund house- which buys more unit when market is down). So we need not break our head to create a triggers

 

[ninamdar]

Guys, this is some great info you give here. Thanks a lot.

I need more information on STP. Do we have any related threads?

I also have a lump-sum amount I want to invest. As you guys suggested, I am planning to use SIP. Till that time, I plan to park my funds in debt fund and use STP to switch to equity funds but I am not getting more information on STP. Can you please help?

Also, are there other options to park funds other than debt funds? I currently use Bank FDs but they lock the money for some time.

Thanks,
Niranjan

 

[San Yad]

Guys, this is some great info you give here. Thanks a lot.

I need more information on STP. Do we have any related threads?

I also have a lump-sum amount I want to invest. As you guys suggested, I am planning to use SIP. Till that time, I plan to park my funds in debt fund and use STP to switch to equity funds but I am not getting more information on STP. Can you please help?

Also, are there other options to park funds other than debt funds? I currently use Bank FDs but they lock the money for some time.

Thanks,
Niranjan

Before putting your money in debt fund I suggest for wait for the RBI rate hikes meeting which and will see how it goes?

Debt funds always dependent on interest rate.

Happy investing

 

[nikrod]

Guys, this is some great info you give here. Thanks a lot.

I need more information on STP. Do we have any related threads?

I also have a lump-sum amount I want to invest. As you guys suggested, I am planning to use SIP. Till that time, I plan to park my funds in debt fund and use STP to switch to equity funds but I am not getting more information on STP. Can you please help?

Also, are there other options to park funds other than debt funds? I currently use Bank FDs but they lock the money for some time.

Thanks,
Niranjan

Hi ninamdar,

You can go through following links. They explain STP quite well.

http://sify.com/finance/making-use-...r-plan-news-personal-finance-jegs0Fgfaii.html

http://economictimes.indiatimes.com...tematic-Transfer-Plan/articleshow/5609586.cms

http://www.indiastudychannel.com/resources/57514-Systematic-Transfer-Plan-STP.aspx

 

[URPradhan]

Ok Ok Ok...
We understood the benefit and power of SIP.

But if someone has to invest a lump sum amount of 4-5 lakhs and its difficult/impossible time-to-market, HOW/WHERE he/she will invest that money ???

Again, if your answer will be put all the money in a liquid/debt fund and apply for a STP to other diversified equity funds, then please suggest/name 2-3 best performing liquid/debt funds which can beat public sector bank FDs

 

[nikrod]

Ok Ok Ok...
We understood the benefit and power of SIP.

But if someone has to invest a lump sum amount of 4-5 lakhs and its difficult/impossible time-to-market, HOW/WHERE he/she will invest that money ???

Again, if your answer will be put all the money in a liquid/debt fund and apply for a STP to other diversified equity funds, then please suggest/name 2-3 best performing liquid/debt funds which can beat public sector bank FDs

No Liquid fund has ever beat returns of FD's. It's not liquid funds mandate to give superb returns. They need to generate moderate returns with safety of capital. There are several debt funds which do but returns are not guranteed.

Refer this link http://new.valueresearchonline.com/funds/default.asp

You can find debt funds giving top returns for period ranging from 1 week to 5 years.