Rushabh Desai Founder, Rupee With Rushabh Investment Services: For capital preservation with moderate growth, consider equity savings funds. These hybrid funds mix equity, arbitrage and debt, offering better yields than fixed income with lower volatility. Some options include ICICI Pru Equity Savings Fund (maximum 20% equity) and Edelweiss Equity Savings Fund (maximum 25% equity). Both have strong records in managing volatility and delivering returns. Hold for at least three years, and consider splitting your investment between both funds for diversification.
I am 70 years old and my wife is 60. I have Rs 18 lakh in stocks and mutual funds (40:60), Rs 20 lakh in fixed deposits, Rs 10 lakh in Senior Citizens’ Savings Scheme, and Rs 11 lakh in a bank savings account. My income from rent, annuity, shares and FD interest is Rs 40,000 a month. My living expenses are taken care of by my two sons. My only goal is to save Rs 30 lakh for my younger son’s wedding in two years. For health insurance, my wife and I are covered for Rs 8 lakh each by my son’s employer. Please suggest options to earn higher returns than those from my current investments.
Dev Ashish Founder, StableInvestor, and Sebi-registered investment adviser: Your regular expenses are borne by your children, so you don’t have to depend on your investments for the same. Since the wedding of your son is a short-term goal, it should be handled via asset allocation. Your assets include Rs 10 lakh in SCSS, which earns 8.2%, and it’s best to retain this. Your equity bucket has Rs 18 lakh, which shouldn’t be allocated to any short-term goal. What remains is Rs 20 lakh in fixed deposits and Rs 11 lakh in the savings account. This should take care of your son’s wedding goal, and you should transfer the amount in the savings account to an FD or arbitrage fund for the next two years. After the wedding, your existing asset base of Rs 59 lakh will be reduced to almost half. When the fixed deposit of Rs 20 lakh is used for the wedding, it will slash the monthly interest income by Rs 12,000, assuming 7% interest rate or more from FDs. To replenish your savings, try to save rent and annuity as far as possible. Your current asset allocation is 31% in equity, 51% in debt and 18% in cash. The equity allocation seems to be more than enough and you need to avoid unnecessary risk by investing to earn higher returns. Your health coverage is sufficient as a base plan, but it might be a good idea to buy a super top-up plan if you want to enhance the cover.
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