SIP Investment - advice needed

[NewToInvesting]

Hi Guys,

I'm a 32 year old professional, married with no kids. I need some advice on my investment and financial planning.

Till now I was putting Rs. 25,000 monthly in Recurring deposits
(Renewing after every 12 month). Now that my income has increased I'm planning to invest in mutual funds and PPF. I will continue with Rs. 25,000 in RDs but will put an additional Rs. 5,000 in PPF (for tax incentives) and another Rs. 20,000 monthly in the following mutual funds via the SIP route.


1. HDFC Top 200 - Rs. 5,000

2. Reliance Growth Fund - RP (G) - Rs. 5,000

3. HDFC Prudence Fund (G) - Rs. 3,000

4. Reliance Regular Savings Balanced - Rs. 3,000

5. Birla Sun Life Dividend Yield Plus - Rs. 2,000

6. ICICI Prudential Discovery - Rs. 2,000


I will likely stay invested in these funds for 3-5 years or maybe even longer. How does this look? Please advice.

Thanks in advance.

Ajay

 

[nikrod]

Hi Guys,

I'm a 32 year old professional, married with no kids. I need some advice on my investment and financial planning.

Till now I was putting Rs. 25,000 monthly in Recurring deposits
(Renewing after every 12 month). Now that my income has increased I'm planning to invest in mutual funds and PPF. I will continue with Rs. 25,000 in RDs but will put an additional Rs. 5,000 in PPF (for tax incentives) and another Rs. 20,000 monthly in the following mutual funds via the SIP route.


1. HDFC Top 200 - Rs. 5,000

2. Reliance Growth Fund - RP (G) - Rs. 5,000

3. HDFC Prudence Fund (G) - Rs. 3,000

4. Reliance Regular Savings Balanced - Rs. 3,000

5. Birla Sun Life Dividend Yield Plus - Rs. 2,000

6. ICICI Prudential Discovery - Rs. 2,000


I will likely stay invested in these funds for 3-5 years or maybe even longer. How does this look? Please advice.

Thanks in advance.

Ajay

Hi Ajay,

Your fund choice for SIP is quite good. Also it is balanced between large & mid cap funds. Go ahead and start the SIPs. One major thing to rember is continue investing in SIP's even during market downturns. That's the time SIP's make best of your investments. Do not panic and stop SIPs or sell your existing investments when market crashes. Maintain this decipline and stay invested for atleast 5 years and you will reap the fruits.

Happy Investing!

- Nikhil

 

[NewToInvesting]

Thank you Nikhil! This puts my mind to rest for investing in SIP. Will definitely keep it up for the long term.

 

[NewToInvesting]

I like the choice of the funds selected.

Thanks

Try to make the SIP for one year. and if you notice the returns are proper then continue the same funds.

otherwise move your money to some other fund which is performing better after one year.

I guess it is always a good idea to keep on evaluating our investments. I'll definitely keep this in mind. Might try to educate myself more and act on it after one year. Thanks for the suggestion!

 

[abdriver2000]

I would suggest you reduce your new RDs to 10000 pm and invest the remaining in MF. Considering that till now, you were largely exposed to debt till now, your focus should shift to equity.

And yes, stick to the investments through good or bad for atleast 3 to 5 yrs.

 

[NewToInvesting]

I would suggest you reduce your new RDs to 10000 pm and invest the remaining in MF. Considering that till now, you were largely exposed to debt till now, your focus should shift to equity.

Thank you Abdriver. With my current plan, my ratio for RDs vs Equities (via SIP MF) will be around 55:45 (Rs. 25,000 vs. Rs. 20,000) but if I reduce RD to 15,000 per month the ratio will be around 33:67 in favor of equities via MF. Is that a good thing? I would love to hear your and other people's thought on this.

If I do decide to go ahead with this plan, what additional MFs would you suggest? or should I just add the sum to a couple of the existing ones I have chosen?

Ajay

 

[abdriver2000]

Thank you Abdriver. With my current plan, my ratio for RDs vs Equities (via SIP MF) will be around 55:45 (Rs. 25,000 vs. Rs. 20,000) but if I reduce RD to 15,000 per month the ratio will be around 33:67 in favor of equities via MF. Is that a good thing? I would love to hear your and other people's thought on this.

If I do decide to go ahead with this plan, what additional MFs would you suggest? or should I just add the sum to a couple of the existing ones I have chosen?

Ajay

Exactly, that should be your ratio for all new investments. You can keep renewing your old investments as and when they mature.

 

[rajivnc]

Thank you Abdriver. With my current plan, my ratio for RDs vs Equities (via SIP MF) will be around 55:45 (Rs. 25,000 vs. Rs. 20,000) but if I reduce RD to 15,000 per month the ratio will be around 33:67 in favor of equities via MF. Is that a good thing? I would love to hear your and other people's thought on this.

If I do decide to go ahead with this plan, what additional MFs would you suggest? or should I just add the sum to a couple of the existing ones I have chosen?

Ajay

You can decide the ratio Debt Vs Equity based on your age. If your age is say 30, then the ratio can be Debt:Equity = 30:70.

If you have any specific requirements to meet after say 10 years, you can go with this ratio till 8 years and start switching from equity to debt scheme during the last 2 years using a SWP [Systematic Withdrawal plan]. That way you will get the full advantage of equity as well as the advantage of safety by having investment in Debt funds

 

[NewToInvesting]

You can decide the ratio Debt Vs Equity based on your age. If your age is say 30, then the ratio can be Debt:Equity = 30:70.

If you have any specific requirements to meet after say 10 years, you can go with this ratio till 8 years and start switching from equity to debt scheme during the last 2 years using a SWP [Systematic Withdrawal plan]. That way you will get the full advantage of equity as well as the advantage of safety by having investment in Debt funds

Thanks. That sounds like a good plan.

Ajay