1. Creating/managing an investment portfolio

2. Indecision!
Stay in Queue:

3. “It Seemed Like a Good Idea at the Time”

4. A minimalist portfolio

5. Multiple Solutions is the norm

6. We have better things to do!

7. Solutions for 20-somethings
What % of your take-home pay is left after monthly expenses?
Can you spare 5-10% of your take-home pay for an investment that will not touch?
Save the rest for short-term needs and have fun!

8. Products-last Approach

10. A Personal Timeline
Recurring Needs
Non-recurring Needs

11. Asset Allocation
What is the percentage exposure to each asset class necessary to achieve a certain financial goal?
When should I invest in what asset class?
What to expect from each asset class?
“Deciding on asset allocation for a financial goal”

12. Asset Allocation When should I invest in what asset class?
0 -5 Years: Equity is too volatile and therefore risky.
100% - fixed income.
0-3 years: RD/FDs
3+ years: debt mutual funds

13. Asset Allocation When should I invest in what asset class?
5 -10 Years: Equity is still too volatile and therefore still too risky.
100% - fixed income.
30% Equity, 70% fixed income
40%+ Equity, rest fixed income

14. Asset Allocation When should I invest in what asset class?
10 Years +: Equity will always be volatile but risk can be managed with minimal effort.
100% - fixed income.
60% -70 Equity, 40%-30 fixed income.
100% equity

15. Asset Allocation What to expect from each asset class?
Equity: 10% -12%. Max 14% +/- few % (10Y +)
Fixed income: 6-8% (post tax)
Gold: 6-8% (post tax) (10Y +)

16. Expected Portfolio Return
60% Equity (12% return), 40% fixed income (7% return) (12% x 60%) +(7% x40%) =10% (post tax) … for a 10Y+ goal
“Deciding on asset allocation for a financial goal”

17. Asset Allocation will change with time
Financial Goal Planner with Flexible Asset Allocation

19. Suggestion to 20-somethings
Do not check your portfolio for first 3-5 years. Invest systematically and leave it be

20. Check your portfolio only once a year!
Get rid of that Moneycontrol app. It is evil!
Correct significant deviations from asset allocation once a year initially and then twice a year: Rebalancing

21. Star Ratings

22. You cannot choose the right mutual fund!
Do we have a review strategy in place?

23. Review your portfolio once a year
What is the net return of your portfolio?
What is the net return of each asset class in the portfolio?
What is the accumulated corpus worth?
Are course corrections necessary?
Returns do not matter!

24. Get rid of volatile asset classes!
… as the deadline for the goal nears. Reduce equity allocation to 0% or to something bearably lower. No formula here. Have to play it by the ear and take it as it comes.

25. Review Goal Inputs each year!

26. Invest systematically, Track investments systematically!

28. Patience is the key!

29. Cannot/ Don’t want to DIY?
Avoid conflict of interest. Avoid anyone who gets a commission
Seek out a SEBI registered investment advisor and invest in commission free products.
Pay a flat fee!
Ignore media reports, amc reports, bloggers AIFW, wealth coaches, wealth doctors etc.
Work with the advisor regularly