Need help with investments

[pandeyji]

As I don’t want to disclose my salary, I’d be sharing in terms of %. I am currently living in a small town(Hometown), and have to move to Bangalore next month. I am having hard time deciding how I should invest. I would appreciate any recommendations or suggestions you have. Few details about me:
- My monthly expenses would come around 10-15% of my salary in Bangalore.
- Since I am in a private company and market doesn’t look so good, there is a chance of losing job.
- Planning to buy a house in next few years (Around 3-4x my current in hand salary), also might buy a car(didn’t have a need yet), I am not married so need to save something for that as well. Other than this I can’t think of any major expense right now.
- I would like to put some amount in FD, other than that I am wiling to take risk.
Please suggest what should I put in Mutual funds as SIP, how much should I invest in stocks directly and any other financial instruments I could use.

 

[pandeyji]

Don't consider this as a financial advice, but as a reference.

Since, I don't know you neither your salary range, life stye, family status, financial status, dependencies etc. it can be hard to suggest anything and also not sure about your risk appetite etc. (you don't need to share these details because I'm not a financial advisor but know this every financial suggestion depends on one's own lifestyle).

------------

Do read this once (Its easy to understand and it'll give you a starting point)

Getting Started | r/IndiaInvestments

Part one of Zero to Investing series : for absolute beginners starting out with investing

www.indiainvestments.wiki

Thanks for the article. Looks like it is for beginners. I have a good financial knowledge and already have a diverse portfolio. I think I am not investing as I should to maximize return, that's why I asked. I can share the details in DM if you can help @helloworld

 

[windows10]

As I don’t want to disclose my salary, I’d be sharing in terms of %. I am currently living in a small town(Hometown), and have to move to Bangalore next month. I am having hard time deciding how I should invest. I would appreciate any recommendations or suggestions you have. Few details about me:
- My monthly expenses would come around 10-15% of my salary in Bangalore.
- Since I am in a private company and market doesn’t look so good, there is a chance of losing job.
- Planning to buy a house in next few years (Around 3-4x my current in hand salary), also might buy a car(didn’t have a need yet), I am not married so need to save something for that as well. Other than this I can’t think of any major expense right now.
- I would like to put some amount in FD, other than that I am wiling to take risk.
Please suggest what should I put in Mutual funds as SIP, how much should I invest in stocks directly and any other financial instruments I could use.

You did not mention ur age, so it would be tricky to know ur actual risk profile. So as per my suggestion, invest in 10% of investment amount in us equity (preferably mf route) 20% in sensex fund 30% direct indian equity remaining 40% i would prefer to park in high return fds(atleast 7-9%) of small finance banks or private banks and if you can handle a bit more risk park 30% in fd and 10% in p2p route. If you have senior citizen parents utilize it to get higher returns in fds. Note: The above analysis is completely my point of view, kindly do your own research and planning before investing anywhere.

 

[pandeyji]

You did not mention ur age, so it would be tricky to know ur actual risk profile. So as per my suggestion, invest in 10% of investment amount in us equity (preferably mf route) 20% in sensex fund 30% direct indian equity remaining 40% i would prefer to park in high return fds(atleast 7-9%) of small finance banks or private banks and if you can handle a bit more risk park 30% in fd and 10% in p2p route. If you have senior citizen parents utilize it to get higher returns in fds. Note: The above analysis is completely my point of view, kindly do your own research and planning before investing anywhere.

Thanks! This is very helpful. I am 28 btw

 

[ramirami]

This is not financial advice, and I am not at all an expert in this, but if I were you I would think like the following. Please do your own due diligence and evaluate the applicability of this in your situation.

1. Any well thought out financial plans can be ruined by unexpected medical expenses, so I'd buy health insurance. Perhaps 2 plans 1 of lower value and lower deductible (copay), and another super top-up of higher value, higher deductible. I'd stay away from anything that mixes insurance and investment - so no money-back plans etc.

2. At least bare minimum monthly expenses (non luxury expenses) x 12 in Savings accounts, possibly FD linked so as to earn a little higher interest. May be a little higher amount here to manage the risk of loss of my job. However having too much money here will reduce my returns. so anything over 24 months of basic expenses is too much of an overkill.

3. Remaining corpus to be divided into 3 parts of (max 5%), 50% and remaining (min 45%) buckets.

4. Max 5% part I'd use for trying out things, learning etc. Want to dabble in cryptocurrency? Want to buy some of that new stock that I think will give amazing returns? Use this part. This way I can try new things, learn, get tempted by risky things and still try them out without fear of getting carried away.

5. 50% part I'd invest in debt investments. A mixture of debt funds, G-Secs, FDs, PPF, EPF can be used here. Government Securities are attractive right now and I have at times preferred them over bank FDs. 50% might sound a little high allocation for fixed income for age 28, but if there is a house purchase goal in the near term, too much investment in equity could be a problem if the markets are down when a house needs to be bought. Provident funds have lock-in periods so I'd not max them out but invest moderately in them and move money from my equity investments into them when the equity returns meet my goal.

6. Min 45% part I'd invest in equity. I'd not aim for the highest possible returns, but rather set some target returns goal and re-balance my equity vs debt allocation periodically. I'd not invest in direct stocks from this 45% bucket because that would need frequent evaluation of my portfolio, researching good investments etc. This takes time and I feel that I could get better returns by using this time for actual career growth than portfolio management. On the other hand, if I were to avoid this research and invest in "well known good" companies, that wouldn't be too different from investing in Mutual Funds.

7. In this 45%, I'd do 5% for a small cap fund (higher risk Indian equity), 5% a NASDAQ Index fund (higher risk US tech stocks), in 20% in a Nifty 50 Index fund (lower risk Indian equity), and 15% in Navi US Total Stock Market Fund, which feeds into Vanguard VTI (lower risk US equity).

8. For mutual funds, I'd buy only direct plans, no regular plans, so as to avoid perpetual payment of commission.

9. I'd avoid privacy invasive mobile apps and invest using websites.

 

[pandeyji]

This is not financial advice, and I am not at all an expert in this, but if I were you I would think like the following. Please do your own due diligence and evaluate the applicability of this in your situation.

1. Any well thought out financial plans can be ruined by unexpected medical expenses, so I'd buy health insurance. Perhaps 2 plans 1 of lower value and lower deductible (copay), and another super top-up of higher value, higher deductible. I'd stay away from anything that mixes insurance and investment - so no money-back plans etc.

2. At least bare minimum monthly expenses (non luxury expenses) x 12 in Savings accounts, possibly FD linked so as to earn a little higher interest. May be a little higher amount here to manage the risk of loss of my job. However having too much money here will reduce my returns. so anything over 24 months of basic expenses is too much of an overkill.

3. Remaining corpus to be divided into 3 parts of (max 5%), 50% and remaining (min 45%) buckets.

4. Max 5% part I'd use for trying out things, learning etc. Want to dabble in cryptocurrency? Want to buy some of that new stock that I think will give amazing returns? Use this part. This way I can try new things, learn, get tempted by risky things and still try them out without fear of getting carried away.

5. 50% part I'd invest in debt investments. A mixture of debt funds, G-Secs, FDs, PPF, EPF can be used here. Government Securities are attractive right now and I have at times preferred them over bank FDs. 50% might sound a little high allocation for fixed income for age 28, but if there is a house purchase goal in the near term, too much investment in equity could be a problem if the markets are down when a house needs to be bought. Provident funds have lock-in periods so I'd not max them out but invest moderately in them and move money from my equity investments into them when the equity returns meet my goal.

6. Min 45% part I'd invest in equity. I'd not aim for the highest possible returns, but rather set some target returns goal and re-balance my equity vs debt allocation periodically. I'd not invest in direct stocks from this 45% bucket because that would need frequent evaluation of my portfolio, researching good investments etc. This takes time and I feel that I could get better returns by using this time for actual career growth than portfolio management. On the other hand, if I were to avoid this research and invest in "well known good" companies, that wouldn't be too different from investing in Mutual Funds.

7. In this 45%, I'd do 5% for a small cap fund (higher risk Indian equity), 5% a NASDAQ Index fund (higher risk US tech stocks), in 20% in a Nifty 50 Index fund (lower risk Indian equity), and 15% in Navi US Total Stock Market Fund, which feeds into Vanguard VTI (lower risk US equity).

8. For mutual funds, I'd buy only direct plans, no regular plans, so as to avoid perpetual payment of commission.

9. I'd avoid privacy invasive mobile apps and invest using websites.

This was extremely helpful. Thanks!