75 per cent Stocks After Retirement: Time to Switch?

My overall equity portfolio is 75 per cent in direct equity and 25 per cent in mutual funds. I retired last year. Given the current market situation, and since the uncertainty is likely to continue for some time, should I sell my direct equity and move to mutual funds? - N Ramamoorthy

No, don’t do that. You have two separate decisions to make here.

The first is about your overall portfolio. Do you need the money, and do you plan to draw an income from your portfolio in the near future? Your income needs should guide you. If this money is likely to stay invested for many years, 75 per cent in equity is a good, disciplined allocation. Whether you should hold 75 per cent in equity, or 35 per cent, 40 or 50 per cent in fixed income, depends entirely on your income needs and on when you expect to start using part of what you’ve built up.

The second decision is whether to stay in direct equity or move to mutual funds. Fund Advisor helps you with this, even if it doesn’t say so in as many words. It can import your entire equity portfolio, with transactions going back 20 years, and it does a good job. So anyone who has invested in both direct equity and equity funds can now see clearly what annualised return each has earned, and decide on merit.

If you’ve done very well with your direct equity over the last five or 10 years, great job. You’ve saved the entire expense ratio, which is a guaranteed saving, and you have proof that you’ve done better than the funds you would have chosen.

What matters is getting the allocation right based on your needs, and then sticking with whichever vehicle has actually worked for you. Ride the winner.

Value Research Fund Advisor is a SEBI-registered advisory that builds personalised mutual fund portfolios around your goals, reviews what you already own and gets you access to commission-free direct plans. Check out for more.