Move majority of assets into debt near retirementhttps://indianexpress.com/article/business/business-others/move-majority-of-assets-into-debt-near-retirement/

Move majority of assets into debt near retirement

Stock market investments are the preferred route of generating smart returns in a year. Since markets have risen considerably,we advise you an active,stock-specific approach.

I want to invest Rs 1 lakh for a year. I am comfortable with risk but desire a high return. Where should I invest?

Stock market investments are the preferred route of generating smart returns in a year. Since markets have risen considerably,we advise you an active,stock-specific approach. Analyse stocks and trends carefully before buying and monitor your investments regularly. You may also take the help of a financial adviser. Graphite,ABG Shipyard,Ranbaxy,Tata Steel,PBA Infrastructure and Berger Paints stocks can help you achieve your objective.

I hold some physical shares of Indian Hotels and wish to sell these. How do I go about it?

Open an account with a depositary participant and send your physical share certificates along with dematerialisation request form to the registrar of the company. Your shares will be dematerialised and transferred to your account. This process usually takes four to six weeks. Meanwhile,you can open a trading account with a NSE or BSE member and sell the shares after receiving confirmation of receipt of dematerialised shares from the depositary participant.

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I am 55,earning Rs 35,000 per month. My adviser has suggested to hold 80% of portfolio in equities. Though I have followed the advice,I am not sure if I am doing the right thing.

Usually,financial planners analyse one’s risk tolerance and return objectives in detail before suggesting an asset allocation plan. The information here is not enough to show whether a detailed analysis of your future earnings,liabilities and retirement plans was undertaken or not. In case of any doubts,take a second opinion. Make sure your adviser has the knowledge and credentials to offer sound financial advice. On the face of it,the advice seems to be incorrect considering your age and the fact that you have only three years to go before retirement. In general,majority of the assets should move into debt at this stage of life as risk tolerance becomes low. I suggest you consult another adviser.

I am investing Rs 5,000 in a SIP of HDFC growth fund. I wish to increase my monthly investments. Should I go with more SIPs in mutual funds or monthly ECS of Ulips?

A mutual fund is a pure investment product whereas a Ulip provides a life cover as well. There is no entry load or deductions of mortality charges on account of life insurance whereas Ulips come with high initial charges and lock-in-period of at least three years. Usually mutual funds offer better returns if you invest for less than 10 years and if you have a life insurance. However,keep in mind that in mutual funds,the asset management charges are levied as a percentage of your total investment in the scheme whereas in life insurance,most charges are deducted from renewal premiums.

Due to this,if your investment horizon is more than 10 years,you should invest via Ulips as the charges do not keep increasing with rise in your invested amount. The premium payment schedule and the 5-year lock-in will ensure disciplined and systematic investment over a longer period. Needless to say,if you need life cover along with investments,then Ulip is the product for you.

—The writer is CEO,Investshoppe.com