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Chennai DIY Investor Workshop

Chennai DIY Investor Workshop. Objective. Make us think Take action, immediately, consistently and feel in control. Invest for long-term goals. Save for Short-term goals. Cash Flow. Home Loan EMI. Retirement. Unexpected expenses. Monthly expenses. Protection!. Saving. Insurance.

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Chennai DIY Investor Workshop

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  1. Chennai DIY Investor Workshop

  2. Objective • Make us think • Take action, immediately, consistently and feel in control

  3. Invest for long-term goals Save for Short-term goals Cash Flow Home Loan EMI Retirement Unexpected expenses Monthly expenses

  4. Protection! Saving Insurance Investment

  5. 1. Term Life insurance 2. Emergency insurance 3 Health insurance 4. Accident insurance 5. Inflation insurance 6. Action Plan insurance

  6. Power of non-compounding Power of compounding does not matter for ~ 5Y or less

  7. Dividing the goal timeline ~ 5 years Save Invest

  8. Recurring Goals • Insurance premium, School fees, AMC fees etc. • Use RDs, • If comfortable liquid debt fund.

  9. Short-term goal (0-3) years • Only fixed income • Fds and RDs • If comfortable, liquid funds and ultra-short term funds (above 1Y )

  10. Short-term goal (<3-5) years • Only fixed income • Fds and RDs • Consider debt mutual funds – liquid funds, ultra-short term funds

  11. Intermediate term goals (5-10Y) • ‘Some’ equity/stock exposure will help • ‘Less’ for important goals (10-30%) • ‘More’ for less-important goals (30-70%) • Rest in fixed income, debt mutual funds

  12. Long-term goals (10Y+) • Equity/stock exposure essential • About 50-70% • Rest in fixed income, debt funds, PPF (15Y+), EPF (retirement) • (don’t switch to NPS!!) • Do not invest 1.5L in PPF!

  13. Retirement Planning

  14. Pension

  15. Indexed pension

  16. Remaining =investible surplus Fix savings Amt for short-term goals Cash Flow Home Loan EMI Min 10% buffer Monthly expenses

  17. Investible Surplus Son’s education retirement Daughter's education Short-term goals Individual long-term goals

  18. Investible Surplus Short-term goals Singe portfolio For long-term goals

  19. Single long-term portfolio

  20. How Important is Mutual Fund Selection?

  21. Large Cap funds • 10-year old funds: 34 • 13 index + LIC Nomura+ JM fund • 10 year SIP XIRR • Baroda Pioneer Growth: 13.44% • UTI Equity: 16.82%

  22. Mid and Small-cap funds • 10-year old funds: 20 • 17 + Sahara+Escorts+Taurus • 10 year SIP XIRR • Can Rob Emer Eq: 23.26% • Kotak Mid-cap: 17.68%

  23. How to select an equity mutual fund? • Decide on the strategy. • Why are you investing? • What kind of portfolio will you be using?

  24. Minimalist equity portfolios • 1 large cap mutual fund + 1 mid/small cap fund • 1 large and mid-cap fund • 1 equity-oriented balanced fund

  25. Mutual Fund Screener

  26. An approach to understanding investment risk

  27. A lump sum investment in ICICI Top 100 Rs. 10,000 invested on 1st Jan 2003 would have grown to Rs. 1.19 Lakhs on Dec 31st 2014. Return = 22.91%

  28. Annual Returns of ICICI Top 100

  29. Understanding the 22.9% CAGR = 22.9%

  30. Annual Returns of ICICI Top 100 Average: 29.3%Standard Deviation: 38.6%

  31. What can I expect from ICIC Top 100? Average: 17.5% Stdev: 13.7% 17.5% +/- 13.7%

  32. Sensex Total Returns Index: 1979 to 2013

  33. Sensex Total Returns Index: 1979 to 2013 0% 10-30% 50-70%

  34. Equity mf investing: What to expect!

  35. Equity mf investing: What to expect!

  36. Journey of a Mutual Fund SIP  Oct 2001, after 6+ years and 74 SIP installments, FIBCF had an XIRR of …..0%

  37. How to select a debt mutual fund?

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