The third in the series of articles, where Cafemutual speaks to successful IFAs to find out how they are managing their personal finances in these volatile times.
Bhavik Udeshi, IFA from Kolkata
Outlook for equities and debt market for 2012 – He feels that the equity market will be volatile and range-bound for some time due to the global economic conditions. He feels the debt market will do better. Recent RBI actions hint at a positive move in this direction.
Broad Asset Allocation – His portfolio consists majorly of long term SIPs. Bhavik also keeps a large chunk of his money in liquid funds for swift transfer into gold and real estate investments. Bhavik believes in staying invested for long term in debt products. Bhavik’s average time horizon for investments in SIP is 5 years and for lump sum about 2 years.
All his investments are linked to his financial goals. Hence, he does not change his asset allocation when market conditions change. Instead, when the market is volatile, he increases his SIP amount. He has also added a few funds of Mirae Asset Management and JM Financial to his portfolio.
Do’s and Don’ts for investors:
His message to investors – Don’t go blindly by an AMC’s brand name, check its fund performance before investing. “Investors should not be afraid of investing in funds of small AMCs. Rather, they should probe a scheme’s performance and fund management style before investing,” advises Bhavik.
Kartik Jhaveri, IFA from Mumbai
Outlook for equities and debt market for 2012 – Equity market will remain volatile for quite some time but the time is right for investments, feels Kartik.
It is a good time for conservative investors to start investing. Investors will surely get capital gains in short term debt fund, but they must start locking-up their money right away.
Broad Asset Allocation – He believes in investing money where one can get maximum returns. His goals are long term and so he has parked his money in equities. His normal allocation is 60 percent equity and 40 percent real-estate. He believes that investors should have realty in their portfolio.
He invests regularly in the stock market and reviews his mutual fund portfolio once in two years.
Do’s and Don’ts for investors:
Do’s
- Invest your money according to your financial goals
- Do investments through SIP if you want to enter mutual fund investment
- Always stay up-to-date with your financial planner
- Buy only term policy in insurance
Don’ts
- Don’t sit on cash, invest it
- Do not go by trends or fads while investing
- Do not go ahead with an insurance plan, child plan, pension plan or endowment plan blindly; check if it is fit for your portfolio
- Do not panic when the market is down
