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Last Updated : May 15, 2018 01:31 PM IST | Source: Moneycontrol.com

Managing Money with Moneycontrol: Rules of investing in various asset classes across age groups

In this episode of Managing Money with Moneycontrol, we tell you about the six new classifications of hybrid mutual funds categories and the best scheme suited for you

Moneycontrol PF Team

Investment plan and creation of portfolio is an ongoing process and should adjust to your various life-stages since your risk factor varies with age. In this episode of Managing Money with Moneycontrol, we tell you about the six new classifications of hybrid mutual funds categories and the best scheme suited for you. In the accompanying video, Sameer Rana, founder and Managing Partner of Compass Financial Partners, shares insights on various rules of investing in equities, debts, real estate and other assets classes at different age groups.

Here are some takeaways for you to adopt the right investment strategy at the different life-stages:


Between 20-30 years

The 20-30 age group are mostly single and have started their careers and don’t have too many liabilities. Therefore, one must not fall into a debt trap in order to get more money. When you are in this age, it is the time to take risks and make money since during this period you have fewer responsibilities towards family and higher risk-taking capability. Hence, it is the right time to start an equity SIP.

Between 30-40 years

During this phase, your responsibilities towards your family increases. However, this is a time when you earn a good amount of money. But this is also a stage when you need to look after your family expenses rather than just your own. Your risk appetite starts reducing. However, to get good returns and to create a good corpus for your children’s education in the future, you need to keep the equity exposure on a higher side. Aggressive hybrid funds or balanced funds having an allocation of around 70-80% in equities will give investors the leverage of holding the funds for a long time without changing their allocation from time to time. Real estate exposure could be limited but it should not be increased beyond a certain level or beyond the need.

Between 40-50 years

This is the time when your children are grown up and you will be thinking of saving funds for your retirement as well as funding your children’s higher education goals. During this tenure you cannot take many risks with this investment and also, you need some sense of security. Therefore, after the forties, you should ideally keep a balanced approach by investing 50% each in equity and debt while planning to save money for retirement.

Between 50-60 years

During this age, you need to consolidate your assets as you are nearing your retirement and any market volatility should not affect the investment you have created throughout the accumulation phase. You know that during this period, the accumulated money is very important for you and without that, you might face serious hardships. Therefore, strategies should be made during these ten years in such a way that you can effectively use your money post-retirement.

Above 60 years

At this age, you don’t need to be dependent on others. However, you need to manage your funds effectively as you eventually need pension income after retirement. So your main goal is to ensure that your money flow from investments suffices your daily needs. So you need to have investments that provide decent returns along with security. You should ideally go for investments avenues having a low risk or no risk such as investments in bonds followed by debt category mutual funds and real estate.

(You can send in your queries to moneycontrolpf@nw18.com)
First Published on May 15, 2018 01:22 pm