10 years 12L to invest

#1
Hi Investment Gurus

I have 10 years left for my Job, I have 1200000 to invest in one go and apart from that I can invest 40000 rs per month for the next 10 years. Whats the best way. How to diversify, I can take medium risk, not too high. Objective to have a retirement corpus of around 1 Core after 10 years Might seem too ambitious, but I would like to hear from the experts here what they suggest.

Regards
Sam
 
#2
You have to achieve 1 Cr target, so there is no alternative to investing in equity and equity mutual funds.

1) Invest 12 Lacs in lumpsum in 5-6 stocks such as Asian Paints,HDFC Bank etc...if this gives a conservative return of 12 % CAGR, it will give you over Rs 37 Lacs.

2) Invest 20,000 per month in multicap funds and 20000 in small and midcap funds....this if grows by 12-15 % CAGR will give you 99 lacs...so you will comfortably achieve the target of Rs 1 Cr.

After 5 years review the investment and if the equity had given more % returns than we assumed in our calculation,then shift the excess in debt funds to protect the gains as we go closer to the target.

I am posting what I would ( or had )do/done , ( I have achieved the target by this approach ) but dont consider that as an investment advice and use your own judgement in investing and be flexible in your approach.

It may be a good idea to consult a financial planner and get a financial plan made by him.....in small fees it could be done. I am not sure whether after 10 years a retirement fund of rs 1 Cr is sufficient to lead a happy retired life. I feel 2.5 to 3 Cr will be necessary.

Best wished for happy and wealthy retirement...

Smart_trade
 
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#5
You have to achieve 1 Cr target, so there is no alternative to investing in equity and equity mutual funds.

1) Invest 12 Lacs in lumpsum in 5-6 stocks such as Asian Paints,HDFC Bank etc...if this gives a conservative return of 12 % CAGR, it will give you over Rs 37 Lacs.

2) Invest 20,000 per month in multicap funds and 20000 in small and midcap funds....this if grows by 12-15 % CAGR will give you 99 lacs...so you will comfortably achieve the target of Rs 1 Cr.

After 5 years review the investment and if the equity had given more % returns than we assumed in our calculation,then shift the excess in debt funds to protect the gains as we go closer to the target.

I am posting what I would ( or had )do/done , ( I have achieved the target by this approach ) but dont consider that as an investment advice and use your own judgement in investing and be flexible in your approach.

It may be a good idea to consult a financial planner and get a financial plan made by him.....in small fees it could be done.

Best wished for happy and wealthy retirement...

Smart_trade
Thank you smart trade, Looks like sincere genuine advice, the 12-15% gain you talking about is aggressive, expectation or conservative, with the options you have suggested. I know nothing of investment and I have never done one before as well. But now since only 10 years left I am giving a serious thought as, working in an IT firm there IS no pension or anything. Hence the decision.

Regards
Sam
 
#6
Thank you smart trade, Looks like sincere genuine advice, the 12-15% gain you talking about is aggressive, expectation or conservative, with the options you have suggested. I know nothing of investment and I have never done one before as well. But now since only 10 years left I am giving a serious thought as, working in an IT firm there IS no pension or anything. Hence the decision.

Regards
Sam
Long term return of 12 % is not aggressive.....Nifty gives that return and good stocks are expected to give 16-18 % average returns......but in our calculation it is better to be conservative so that if we achieve more, we can achieve the target early.

Time is running out so you have to act fast and not delay the investment decisions as with the delay, the target will be difficult to achieve. I

Smart_trade
 
#7
^^ Yes I agree.. time not left much .... I will start my investment with a month or max 2 ..... will share my findings and final decision as to where I am investing to get some more suggestion if the path is correct. Thanks again for taking out time to reply. Appreciate that.

Regards
Sam
 
#8
If no pension, you can go for NPS.

I think investing everything in one sector i.e. equities will not be the safest thing to do. Maybe with time you will come to adjust your targets and outlay. Anything in speculative markets need active management. There is no "Fill it, shut it, forget it" investment here. Invest not more than 50% in the speculative markets.

You can invest upto 9lakhs (joint a/c.) in post office monthly income scheme and redirect the monthly income to a recurring deposit account or SIP in mutual funds. I would suggest that you hold on to your corpus in safer schemes and the monthly investment in the riskier profiles.
 
#9
You have to achieve 1 Cr target, so there is no alternative to investing in equity and equity mutual funds.

1) Invest 12 Lacs in lumpsum in 5-6 stocks such as Asian Paints,HDFC Bank etc...if this gives a conservative return of 12 % CAGR, it will give you over Rs 37 Lacs.

2) Invest 20,000 per month in multicap funds and 20000 in small and midcap funds....this if grows by 12-15 % CAGR will give you 99 lacs...so you will comfortably achieve the target of Rs 1 Cr.

After 5 years review the investment and if the equity had given more % returns than we assumed in our calculation,then shift the excess in debt funds to protect the gains as we go closer to the target.

I am posting what I would ( or had )do/done , ( I have achieved the target by this approach ) but dont consider that as an investment advice and use your own judgement in investing and be flexible in your approach.

It may be a good idea to consult a financial planner and get a financial plan made by him.....in small fees it could be done. I am not sure whether after 10 years a retirement fund of rs 1 Cr is sufficient to lead a happy retired life. I feel 2.5 to 3 Cr will be necessary.

Best wished for happy and wealthy retirement...

Smart_trade
Sir hw can you say these stocks will 12% return and keep on doing forever
 
#10
Sir hw can you say these stocks will 12% return and keep on doing forever
I dont have to say this, the past data says so. Just see past 20 years CAGR returns in these stocks...we have to base our calculations on the past data as we cannot see the future.Asian Paints is growing for last 40 years and HDFC bank is growing for last 35 years.....every time it appears that they will stop growing as they have reached the peak but they still keep growing.

Nifty's long term CAGR is over 12 % and the growth stocks are expected to give 5-7 % more than nifty average.
Nifty has a CAGR of 13.4% in the last 20 years (since 1998) and 13.89% in the last 10 years (since 2008).

Smart_trade
 
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