Putting all my savings into Mutual Funds (MF) – Is it correct ?

POSTED BY Nikhil ON December 23, 2013 9:57 am COMMENTS (6)

Hi Guys

From Jan 2014, I am putting all my monthly savings into MF. After that I won’t have an extra penny apart from my monthly expenses.

My question is whether it is advisable to put all your money in MF ? I am 25 years old. I also have ~ 1-1.5 Lac as FD which can be liquidated with just a click in case of emergency. Moreover I have a term insurance and all my family is covered with my company’s health insurance plan.

The reason behind investing everything in MF is because my current portfolio is fully in debt schemes viz PPF and FDs. Out of that FDs are my liquid assets. And I want to balance my portfolio with 75% concentration on equity.

Please give me your suggestions. My MF investment portfolio looks like:

1) Birla Sunlife MNC Fund (Regular)

2) ICICI Pru Discovery – Direct (G)

3) ICICI Pru Dynamic Plan – Direct (G)

4) ICICI Pru Exp&Other Services-DP (G)

5) ICICI Pru Focused. Blue -Direct (G)

6) ICICI Pru Bkg&Fin Serv -Direct (G)

7) ICICI Pru Focused Bluechip Eqty Direct (G)

8) SBI Emerging Busi Direct (G)

9) SBI FMCG Fund – Direct (G)

Any suggestions / improvements from experienced folks will highly helpful. All my investments (except 2) are online and I can easily cancel/switch from them.

Thanks

Nikhil

6 replies on this article “Putting all my savings into Mutual Funds (MF) – Is it correct ?”

  1. ashalanshu says:

    Dear Nikhil, please wait for a while and spend your precious time in reading past articles, discussions. Once this learning time is over, you can take informed decisions.

    Thanks

    Ashal

  2. hemanthchandra62 says:

    You can also try PPFAS Long Term Value Fund

  3. nikhil141088 says:

    Hi Guys

    Thanks for your replies.

    I wanted to invest in a variety of funds types like: large cap, small cap, liquid fund etc and then into sectoral funds as well like balanced equity, fmcg, banking etc. My term ins. is 1 Cr and health ins. is 6 lakh. I also plan to buy one more policy just to cover in case I quit my job.

    I actually have invested in 8 funds (no. 5 and no. 7 are same). I will discontinue 2 or 3 after an year or so. I am a first time investor and I really don’t have a goal in my mind right now. So I am not looking for a short term horizon. My main motive is to invest in equity for a long term as FD gives just 9 % (deduct 20% tax on that).

    I believe that a bluechip fund from ICICI or SBI is more or less the same. I happen to invest first in ICICI so I registered online and from there applied for the direct schemes. And the ones I invested are good rated one (CRISIL rank 1 or 2). What can happen with a polarity towards a particular fund house ? Any demerits ?

    Secondly I am starting a SIP; so it really doesn’t matter whether the valuations are currently high. Even if there is a market correction it won’t hurt much. I guess FMCG and Banking are two cornerstones of our economy; what the harm in investing there ? As I told, my horizon is no less than 4 years. Only in some emergency I may go for withdrawal.

    As I told you; I can cancel any above these funds anytime and I will be starting in Jan’14. As of now my SIP is in ICICI focused bluechip and SBI emerg busi. Rest are to be started in Jan 1st week.

    Thanks
    Nikhil

  4. ashalanshu says:

    Dear Nikhil, why are you investing in 9 funds?

    thanks

    Ashal

  5. Manish awasthi says:

    Consult with financial planner and create ur goals and decide how much allocation in mf is good .believe 75% is too high

    How much is d health insurance cover provided by company ? one of my friends mother was diagnosed with cancer and health insurance cover provided by her company was 2lakh. i believe u know 2 lakh is small amount for cancer treatement. So check cover and then decide if u need to buy health insurance…

    Creat goals like why u want to invest in MF- short ,medium long term.
    If u r first time investor in MF , better to invest in large cap or balanced fund for some time and understand equity and mf and then look for midcap fund. Read as much as u can understand ur portfolio dont go for 1- 2 year return. Even though fund is not ranked 1 but it should be Consisitent performer like Sachin tendulkar type of fund.

    Can i ask u why u want to invest in MF. do u have goals
    1.Ur portfolio has 9 funds.reduce it 3-4 funds
    2.Too much focus on ICICI fund- Funds are good but still high concentration on one fund house is not good. Look for good large cap fund from other AMC. Franklin Bluechip is good but still dont go on my advise . <<<>>>
    3. Dont go for sectoral fund like FMCG.and fin service. FMCG sector has given good returns in past but right now valuations are high and putting money in one sector is bit risky .Wht if FMCG stocks turn out to bad performers in future. Similary with Bkg & fin service fund. Personally i will go for equity diversified then sectoral funds.

    try to understand & read WHY EQUITY AND MF then invest…

  6. nikhil141088 says:

    By MF I mean SIP in Mutual Funds. And I am planning to invest whatever I save every month from Jan’14.

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