I need to plan my portfolio

POSTED BY Sandeep ON August 20, 2012 2:07 am COMMENTS (14)


I am very new to investment stuff.

I am 22 years old now, and I plan to invest 2-2.5 L per year. Mainly for long term, but with some withdrawals(approx 10L) after 5-6 years.

I am putting in 3.5k per monmth of PF also.

I also have a 4.5 L education loan with 14% interest rate.

Whare should I invest my money?

Mutual funds? — why and of what type?..how to predict which ones would be stable for the long term?(someone also recommended gold/silver)

Should I concentrate on finishing off the loan first?

What are the other investment avenues I can look into?

My idea was to first finish the loan and then get into equity MF..is it right?

Thanks a lot 🙂

14 replies on this article “I need to plan my portfolio”

  1. K Balaji says:

    Hi anshal
    just to understand the point on PPF interest calculation. not clear. will u explain me.

  2. Sandeep says:

    thanks 🙂

  3. Sandeep says:

    So other than HDFC Prudence and HDFC Balanced fund..what could be the other options?

    1. Dear Sandeep, The 2 offered by me are top class balanced funds. If I’m going to invest my own money, I w’d remain with one of these 2 funds.



  4. Sandeep says:

    Sorry..but i heard the term AMC for the first time..I just read on some forum some time back that some ICICI Prudential & DSPBR mutual finds are giving good returns..so thought of asking about that..I’ll look into it more. any suggestion in this regard?

    Thanks 🙂

    1. Dear Sandeep, do not feel sorry or ashamed. If you do not know, do not worry, this forum is the place for people like you.

      AMC stands for Asset Management Company. Aka Mutual Fund in normal language.

      Please feel free to discuss, whatever you want to. Do not think that the question in your mind is a silly one. With all due to respect to KBC & Sr. Bachchan – No question is small.

      Each question has it’s merits. So what are you waiting for? Start questioning. 🙂 🙂



  5. Sandeep says:

    thanks Ashal…
    approx 1000 is PF and rest 2500 is PPF. is it a bad investment?

    and how about ICICI Prudence and DSPBR?

    1. Dear Sandeep, PF is compulsory so no choice is there. But in case of PPF, my take ‘ll be to invest full 30K (2500*12) between 1st to 5th april every year. This ‘ll help you to earn maximum interest on the amount for full year.

      Are you asking for ICICI Prudential & DSPBR AMCs or any fund from these AMCs?



  6. Sandeep says:

    @ashal…5-6 yrs from now i’ll be 27-28…right time to get married :D…and it brings along some other expences as well…
    @Matter: Thanks for the advice. but how does the 10 years time frame matter if we leave aside to withdrawal? and how did you get to the 4% number for gold? any calculations?

    1. Dear Sandeep, 2.5L Rs. yly capacity to save/invest translates into 20K Rs. mly figure. Out of this 20K Rs. figurwe, if you start investing 12K Rs. mly in a product which may provide you 10% ROI as return, you are done for this 10L Rs. requirement after 6Y (72 months here after).

      You may invest in HDFC Prudence or HDFC Balanced fund for this goal.

      Well is it PF, part of your salary or PPF opted by you for investment for that 3500 Rs. mly figure? Please confirm.



  7. Matter says:

    The education loan interest is quite high than normal. I am not sure whether it is floating. Anyhow, it is recommended to be debt free (debts that won’t add appreciation). Education load considered to be good debt as it enhances your skills. But, for your current goal of 10L, it is an obstacle.

    You are younger, you don’t need 3.5K per month in PPF kind of debt instrument. But remember (read Manish book) your initial contribution adds lot of value to PPF in long run, especially if you plan it as retirement kitty. Also, for retirement, diversifying 50/- per day into equity (small and mid cap) would be more beneficial than PPF.

    For the goal of 10L, I would recommend to opt three to four asset classes. Namely,

    Equity: Both MF and direct stocks. I would suggest blend of two mutual funds that covers small, mid and large cap. On the stocks, don’t go for more than 3 to 4 stocks, that too in different sectors like Oil, Pharma, Automotive and services. You have 10 years time frame, it is possible that we may see another bull run. Identifying these two or three stocks is key. You need an expert help here, and also you need to monitor market. Careful here.

    Real Estate: Small piece of land in upcoming area. But it weighs least in liquidity. I don’t mean to opt real estate. But want to bring to your notice that, loan against property (approved by local development authority) is cheaper than personal/credit card loans. It can be a jack pat if the area has potential to catch development.

    Gold: Very little part (< 4%) in gold ETFs, to take advantage of fluctuations in gold. Personally, I feel there might be correction in gold in future.

    After collecting sufficient information, I would suggest to sit with a certified planner and draft a plan.

    1. Matter says:

      Sorry, I have incorrectly read that time frame is 10 years. The above comment made based on 10 year time frame.

  8. Dear Sandeep, May I know for what purpose you need that 10L Rs. amount after some years?



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