Dhirendra Kumar sheds light on the easy way to track your investments and align them with your goals
I have seven to eight goals. Should I create a separate portfolio and SIPs for each of them? Would it not be too much to monitor?
- Debaraj Choudhury
You will have to strike a balance between the portfolios and goals. I would rather give you the principle than the exact prescription on balancing this because knowing the principle, you can adapt it to your requirement.
Firstly, divide your goals into the immediate, medium, and long term, based on when you need the money. The immediate and medium-term goals should further be divided on the negotiability and non-negotiability of the goal. For a non-negotiable goal up to the medium term, the money should be invested in fixed income. You don't need a diverse portfolio for such goals, and the money should be handy. You should not be dependent on the market to spend that money as and when you need it. If you don't have the comfort of having that money when you need it, it's no good. Further, the money you are unlikely to need for the next five years and more should be invested dominantly into equity.
Then you can bunch these goals into how much money you are likely to need for each of them and in how much time and then invest accordingly. Further, you need to plan the cash flows of your goals. For instance, if you need Rs 5 lakh in three years from now, or Rs 10 lakh in five years, or Rs 1 crore sometime after you retire, which is 25 years from now. These may be some of your goals.
Coming to investing in separate portfolios. Firstly, suppose you are investing on a diversified basis. In that case, the time horizon in which you need money, i.e., for short to medium term if you are invested in fixed income and for anything above five years if you opt for a diversified fund, then you don't necessarily need a separate portfolio. What you can perhaps do is to use Value Research Online for this. Suppose you invest Rs 20,000 a month. Using the My Investments tool, you can segregate Rs 20,000 that you are investing for different goals. You can tag a small part of your money from the same investment for different goals for easy tracking. It will help you know if you are well on your way to achieving your goals when you need to. Similarly, the investments made in more than one fund can further be separated for different goals using that tool.