Subbu's Solution

I have retired recently and would like to invest a portion in a couple of equity MFs through 5 year SIP. Will it be in order if I invest in liquid and ultra-short term funds for 1 or 2 years and then do STP in equity MF scheme? I have invested various amounts in FD for 1,2,3,4 years in order to earn income on idle money. Thanks in advance. I do not fall under any tax slab. - Ashok Mehta
Congratulations on the beginning of your second innings Mr. Mehta. When it comes to asset allocation I generally suggest people to INVEST A LARGER PROPORTION in equities if you are young and proportionately reduce it as you age. Even at the time of retirement, I would advise a good amount of investment in equities- as long as you do not need any cash flows from this investment. This will allow your investment to grow and beat inflation, subject to high market risk. The accumulated equity assets could not only be of use to you, but can also is a great asset to bequeath for the next generation However if you need regular income from your investments, then lesser investments may be made in equities as you retire, and more amount in debt.
I do not know all the details of your needs etc- but purely based on your question, I feel that you could straightway start a SIP in equities rather than first invest in debt funds and then do an STP into equity. Do consult your financial advisor before taking any investment related decisions.


Subbu's Solution is authored by I. V. Subramaniam. I. V. Subramaniam is a director of Quantum Asset Management Company Private Limited. The responses expressed here are strictly for information and explanation purpose only. The responses are meant for general reading purpose and not to be considered as an investment advice / recommendation. The responses are not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or units of the Mutual Fund. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments. The Sponsor, The Investment Manager, The Trustee, their respective directors, employees, affiliates or representatives shall not be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in the responses.

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