Planners advocating model investment portfolio for investors for long term wealth creation. Amid greater uncertainty, frozen credit lines and choppy markets, financial planners are advocating model investment portfolio for retail investors for long term wealth creation.
Allocating assets in all classes to suit different risk profiles, they say the time is right to take an aggressive approach towards investments. Such an investment portfolio is inclusive of products from different asset classes. However, it is only the risk appetite of an investor that determines the exposure against any particular asset class. Said Amar Pandit, director, My Financial Advisor, “Be conservative in buoyant market and aggressive in doom market. This market meltdown has catered to a host of investment opportunities in asset classes including debt, equity, gold and a few others.” According to financial planners, investors with high and moderate risk appetite can invest 60-75 per cent and around 40 per cent respectively of their total investments in equities. Equity investments have to be either through diversified large cap equity funds (offered by frontline mutual fund houses) or picking up shares of blue chip companies (currently available at a cheaper rate) without any sector bias with 3-5 years timeline. Pointed out Swapnil Pawar, director – Park Financial Advisors, “Investing in blue chip companies can be done either through piece- meal basis – ‘buy at every decline’ in this gloom market or on bulk investment basis wherein you must not look at the stock price every day.” On the other hand, bank deposits, public provident fund, balanced funds, guilt fund and gold have emerged as the preferred choice of financial planners for low risk investors. While bank fixed deposits give assured returns in this era of layoffs, guilt fund glitters amidst repeated rate cuts by RBI. The latter can fetch up to 10-12 per cent return per annum with the expectation of further rate cuts by the central bank by another 1-1.5 per cent. “Investors should go for only long term guilt fund investing in 5 years plus papers,” added Pawar.Investing 5-10 per cent in gold both in the form of gold exchange traded fund (ETF) and physical gold is also seen as a good hedging tool. Besides, financial planners are quite convinced of gold’s long term worth expecting the gold price to go up manifold. Investing in PPF will give two way benefits including 8 per cent rate of interest per annum and tax relief of maximum Rs 70,000 per annum. “In times of recession, like now, when job cuts are quite frequent, investment in PPF and FDs will give additional support to your livelihood,” feels Pandit of My Financial Advisor. Real estate, already bruised by the liquidity crunch, too holds investment promise. Though distressed sale of property seems attractive presently, a correction in prices up to 50 per cent is in the offing, predict analysts. “In the coming six months, there will be huge correction in real estate prices. Hold your breath till that time for realty investment,” commented Sonu Bhasin, President – retail financing, Axis Bank. She suggests retail investors scout for opportunities over 5-7 years timeline, instead of falling prey to hearsay. N.Sukumar Research Analyst www.kences1.blogspot.com --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
