Widely read:
Edited transcript: Investing a lumpsum amount in 4 balanced funds in not a good idea. Balanced funds are nearly 75% equity (though legally they are supposed to be 65% or more to derive the benefit of equity tax treatments). So, from that standpoint, one should always average that investment.If it is your retirement benefit which you are going to invest, don't even think of investing a lump sum. Say, if you are investing a corpus of Rs 50 lakh corpus and the market drops by 20% in the next one year (a possibility which can never be ruled out), then it will be quite unnerving for you. If this is all the money you are going to invest and derive the income from, I would suggest you be extremely conservative with it. You should plan to transfer to money systematically to these balanced funds over the next 24 to 36 months. If this a part of your retirement corpus (say 50%), then maybe 1 year or 18 months is good enough. But if it's all the money you have got and it's going to be a financial cushion, be a little conservative. Spread it over a long period of time.
This article was originally published on June 09, 2017.
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