I am a 35-year-old single woman with no plans for matrimony. My current investments are as in the Table. I want to know how balanced it is and what changes I need to make. With the market appearing to reach its zenith, what should be my investment strategy?
Swati Sonee
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
No doubt, the Indian equity markets have touched an all time high and you have every reason to be cautious of your investment. But this does not, by any way, suggest that the markets is at its zenith or has reached its final destination. The market could go either up or down from here on. Markets are, by their very nature, unpredictable. Therefore, your investment strategy should be guided more by what you want from your investment rather than the market movements.
If you think you have achieved what you wanted from your investment, just pull out your money and go home. But, before making a call, just remember that investments in equities should be done for a longer period of time say, over 3 to 5 years.
Equities, or for that matter equity funds, have always proved to be an excellent investment avenue over a long-term. For instance, in the past five years, the BSE Sensex has taken wild swings between 2,600 and 6,194 points. But, in the same period, an average diversified equity fund has given an annualised return of 21 per cent vis-à-vis Sensex's 11.4 per cent return. Since most of your investments are new, we would suggest you to hold it for some more time.
When we entered your portfolio in our Portfolio Manger (on our website www.valuerese-archonline.com), we found that you hold a very well diversified portfolio. This means that your fund selection is good and there is no severe concentration on any particular sector.
And as per your current age (35 years), the asset allocation is also good - 80 per cent into equities and 20 per cent into debt. Thus, try to maintain that allocation by regular re-balancing. Though your debt allocation only comprises of Birla MIP, one or two debt funds could be considered. This will facilitate easier re-balancing, as you will be adding just to the debt component.
This article was originally published on March 01, 2004.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
