Strategic Planning for Long-Term Investing: Expert Guidance for Building a Retirement Corpus
Devadas Shenoy, a 32-year-old professional working in Abu Dhabi, is taking a proactive approach towards securing his financial future by investing in a well-balanced portfolio for the long term. With a keen eye on building a substantial corpus for his retirement, Devadas has turned to expert guidance to craft a Systematic Investment Plan (SIP) that aligns with his goals.
Investing close to Rs 12,000 every month, Devadas plans to increase his SIP by 10% annually, showcasing his commitment to growing his investment over time. Understanding the importance of investment diversification, optimal SIP strategies, and fund selection, Devadas sought insights from Girirajan Murugan, CEO of FundsIndia.
With a moderately high to very high risk profile, Devadas has allocated his current SIP across various funds, including Parag Parikh Flexi Cap Fund, Kotak Multicap Fund, Mirae Asset Large and Mid-Cap Fund, Quant Small Cap Fund, ABSL PSU Fund, Quant Absolute Fund, and HDFC Balanced Advantage Fund. Seeking advice on the diversification of his fund selections, Devadas received valuable input on the importance of diversifying based on investment styles to mitigate risks and optimize returns over a 28-year period.
In his quest to maximize benefits while managing risks, Devadas also inquired about an optimal strategy for stepping up his SIP. Girirajan Murugan advised him to increase his SIP amount every year, especially after receiving a salary hike, as even a small increase annually can significantly impact the final portfolio value over the long run.
When it comes to specific fund choices, Devadas questioned the suitability of ABSL PSU Fund for his long-term investment horizon. Murugan highlighted the higher risk associated with sector/thematic funds and the need for precise timing and selection to achieve success. Given the underwhelming performance of many sectoral and thematic funds over the long run, Murugan advised Devadas to carefully consider the potential risks and rewards before making any reallocation decisions.
Devadas’s proactive approach to investing for the long term serves as a valuable lesson for individuals looking to secure their financial future. By seeking expert guidance, diversifying investments, and strategically increasing SIP amounts, Devadas is on track to build a substantial corpus for his retirement. As he navigates the complexities of the investment landscape, Devadas’s story serves as a reminder of the importance of strategic planning and long-term vision in achieving financial goals.