Financial Planning Advise

From: Kailas Pethkar
To: sharesher@indiatimes.com, goodfundadvisor@yahoo.com
Sent: Sun, 27 Jul 2008 13:04:19 +0530 (IST)
Subject: Financial planning advice

Dear friend,

I am an NRI, 30 year old, recently married. I am responsible for living expenses of my retired parents who dont have source of income such as pension or annuity. I have constructed my new house recently completed at my town in Maharashtra where my parents reside. I dont have any other property elsewhere. I want to create a sound portfolio of stocks, mutual funds and debt instruments for future. I am considering to keep the age as percentage of debt investment and rest in equity/mutual funds. I request your valuable advice towards better financial planning for future.

• I started investing in mutual funds since February 2008. Till date I have invested Rs. 751000 this year. Details below.
• Also I had purchased Bajaj Allianz Century Plus ULIP with Rs. 50k per year premium. This will be continued for 10 years.
• I had purchased LIC moneyback policy in October 2003 with quarterly premium of Rs. 3971. The policy is effective till date.

I am enclosing below the details of mutual fund investments for your reference.

1a. Birla Advantage(G)-5000 on 21.02.2008

1b. Birla Advantage(G)-5000 on 10.03.2008

1c. Birla Advantage(G)-5000 on 25.03.2008

2a. Birla Basic Industries(G)-10000 on 04.03.2008

2b. Birla Basic Industries(G)-5000 on 10.03.2008

2c. Birla Basic Industries(G)-5000 on 25.03.2008

2d. Birla Basic Industries(G)-5000 on 18.06.2008

3a. Birla Sunlife Equity(G)-10000 on 04.03.2008

3b. Birla Sunlife Equity(G)-5000 on 10.03.2008

3c. Birla Sunlife Equity(G)-50000 on 25.03.2008

4a. Birla Frontline Equity(G)-10000 on 04.03.2008

4b. Birla Frontline Equity(G)-5000 on 10.03.2008

4c. Birla Frontline Equity(G)-5000 on 28.05.2008

5a. Birla Infrastructure(G)-10000 on 04.03.2008

5b. Birla Infrastructure(G)-5000 on 25.03.2008

6a. Birla Midcap(G)-5000 on 04.03.2008

6b. Birla Midcap(G)-5000 on 10.03.2008

6c. Birla Midcap(G)-5000 on 04.04.2008

6d. Birla Midcap(G)-5000 on 18.06.2008

7a. Birla Special Situations(G)-50000 on 31.01.2008

7b. Birla Special Situations(G)-switchout to Birla Sunlife Equity Fund - 10000 on 04.03.2008

7c. Birla Special Situations(G)-switchout to Birla Sunlife Basic Industries Fund - 10000 on 04.03.2008

7d. Birla Special Situations(G)-switchout to Birla Sunlife Frontline Equity Fund - 10000 on 04.03.2008

7e. Birla Special Situations(G)-5000 on 25.03.2008

8. DSP Balanced(G)-10000 on 19.06.2008

9a. DSP Equity(G)-30000 on 25.02.2008

9b. DSP Equity(G)-10000 on 19.06.2008

10a. DSP TIGER(G)-30000 on 15.02.2008

10b. DSP TIGER(G)-15000 on 11.03.2008

10.c DSP TIGER(G)-10000 on 19.06.2008

11. DSP Top 100(G)-20000 on 02.06.2008

12. DWS Alpha Equity(G)-20000 on 30.05.2008

13. DWS Investment Opportunity(G)-20000 on 30.05.2008

14. HDFC Growth(G)-5000 on 18.06.2008

15. HDFC Infrastructure(G)-30000 on 30.02.2008

16a. HSBC Equity(G)-20000 on 12.05.2008

16b. HSBC Equity(G)-10000 on 19.06.2008

17a. ICICI Pru Dynamic(G)-5000 on 09.05.2008

17b. ICICI Pru Dynamic(G)-5000 on 23.05.2008

18a. ICICI Pru FMCG(G)-5000 on 02.05.2008

18b. ICICI Pru FMCG(G)-5000 on 20.05.2008

19a. ICICI Pru Index(G)-5000 on 27.05.2008

19a. ICICI Pru Index(G)-2000 on 12.06.2008

19a. ICICI Pru Index(G)-3000 on 18.06.2008

20a. ICICI Pru Infrastructure(G)-20000 on 25.03.2008

20b. ICICI Pru Infrastructure(G)-5000 on 18.06.2008

21a. Kotak-30(G)-5000 on 02.05.2008

21b. Kotak-30(G)-5000 on 09.05.2008

21c. Kotak-30(G)-5000 on 22.05.2008

21d. Kotak-30(G)-5000 on 28.05.2008

22. Kotak Opportunities(G)-20000 on 11.03.2008

23. Magnum COMMA(G)-20000 on 25.03.2008

24. Magnum Contra(G)-5000 on 18.06.2008

25a. Reliance Banking(G)-5000 on 23.04.2008

25b. Reliance Banking(G)-5000 on 21.05.2008

25c. Reliance Banking(G)-5000 on 27.05.2008

25d. Reliance Banking(G)-5000 on 19.06.2008

26. Reliance Div Power(G)-30000 on 14.02.2008

26. Reliance Div Power(G)-15000 on 11.03.2008

26. Reliance Div Power(G)-5000 on 26.05.2008

26. Reliance Div Power(G)-5000 on 29.05.2008

27. Reliance Growth(G)-25000 on 18.06.2008

28a. Reliance Regular Savings-Equity(G)-5000 on 09.05.2008

28b. Reliance Regular Savings-Equity(G)-5000 on 23.05.2008

29. Sundaram Capex Opp(G)-20000 on 17.03.2008

30. Sundaram Growth(G)-20000 on 02.06.2008

31. Sundaram Select Focus(G)-20000 on 02.06.2008

32. Tata Equity P/E(G)-10000 on 19.06.2008

33a. Tata Infrastructure(G)-20000 on 11.03.2008

33b. Tata Infrastructure(G)-10000 on 19.06.2008

34. Templeton India Growth(G)-20000 on 12.05.2008

35a. Birla Dynamic Bond fund (D-Q Reinvestment) – Rs. 10000 on 21.07.2008

35b. Birla Dynamic Bond fund (D-Q Reinvestment) – Rs. 5000 on 25.07.2008

36. Kotak Flexi Debt (D-Q Reinvestment) – Rs. 10000 on 21.07.2008

37a. HDFC High Interest Short Term Plan – (D-Reinvestment) – Rs. 10000 on 21.07.2008

37b. HDFC High Interest Short Term Plan – (D-Reinvestment) – Rs. 5000 on 25.07.2008

Please review my investment portfolio and suggest me changes for optimising the returns. Also I wish to know which insurance will be suitable for me since I dont have sufficient insurance, I feel.

Thanks in anticipation.

Regards,

SRIKANTH SHANKAR MATRUBAI'S REPLY :::
Dear Kailash,
At the outset, I apologise for my delayed reply. I have been extra busy lately due to Tax Returns filing, or I would have definitely replied much earlier.

I went through your mail at least 5 times and this has been my honest analysis about the same.

First, the good thing. The fact that you have completed the construction of your home is great news for your finances. This straight takes away a lot of headache in planning your secure and h(w)ealthy future.
The fact that you are considering your age as a percentage of your exposure to debt shows that you have good financial acumen and after looking at your portfolio, shows that your financial acumen only needs a bit of polishing and setting them on the right road of riches.
I will make an honest effort.
Your portfolio is shocking. First of all, you have started your investments just after the burst of Big Bull Run in Feb 2008 and most disappointingly, all of your investments have through LUMP SUM.
Another disappointing aspect I noticed your switching from funds, after a period of just 3 months!!!!. Shocking!!

You need to change your financial advisor at once. If you do not have one, get one immediately. If you could not afford, try to read the messages on moneycontrol messageboard and visit goodfundadvisor.blogspot.com , where you can learn a lot and make yourself a competent investor.
You look to be a collector of funds, rather than an investor.

You have 34 equity funds, which is too too big and unwieldy all at once.
You need to take harsh decisions and sell some and switch some.

Sorry, Mr.Kailash, your mutual fund advisor is self-centred. you should have consulted some competent persons. At least, an email to me or someone from moneycontrol messageboard would have saved lot of money and headache.

After going a lot of thought to your portfolio, I suggest you have the following funds in your portfolio from the present one.

1. Birla Sunlife Equity Fund
2. Birla Sunlife Frontline Fund
3. DSPML Balanced Fund
4. DSPML Tiger Fund
5. DSPML Top 100 Fund
6. DWS Investment Opportunity Fund
7. HDFC Growth Fund
8. HDFC Infrastructure Fund (I am advising an hold on this fund, only becoz it is a close ended fund. Review the same when it becomes open ended)
9. HSBC Equity Fund
10. ICICI Dynamic Fund
11. ICICI Index Fund
12. Magnum Comma Fund
13. Magnum Contra Fund
14. Reliance Growth Fund
15. Sundaram Select Focus Fund


Unfortunately, you do not have any International Fund. Do add one by buying either Templeton India Equity Income Fund or Birla Sunlife International Fund

Also, you can consider switching from ICICI Dynamic Fund to ICICI Power Fund.

Please, Please, it my humble request to you, Please invest preferably through sips.
And invest in diversified Equity Funds.

Regards,
Best of luck,
Srikanth