Which mutual fund is best for long term investment as I am jobless

I lost job in January 2017 and since waiting to get a new one. I was working in Saudi Arabia. But in last 5 years I was saving and keeping all money in my bank savings account. Now I am investing that money in Mutual fund. My purpose of investment are; 1. Invest in Mutual Funds to grow the money for at least for 5 to 10 year while I will review my portfolio after every completed year, 2. To get some monthly dividend to manage home (school fees, house loan EMI, insurance instalments, Bill pay and day to day expenses etc) for 1 year or until I get job, 3. What ever I earn from mutual fund should be tax free, 4. I am 38 so taking a term insurance on 1.25 Crore, 5. Medical Insurance is already there for self and family, 6. Keeping 50,000 in savings account, 7. If any major emergency comes so I will liquidate one the large cap fund. Here is my Plan 1. HDFC Prudence Fund - Direct Plan - Monthly Dividend Payout - Invest 7 Lakh, 2. ICICI Prudential Balanced Fund - Direct Plan - Monthly Dividend Payout - Invest 5 Lakh, 3. Reliance Regular Savings Balanced Fund - Monthly Dividend Payout - Invest 8 Lakh, 4. HDFC Balanced Fund - Direct Plan - Dividend Payout - Invest 2 Lakh, 5. DSP BlackRock Opportunities Fund - Direct Plan - Dividend Payout - Invest 2 Lakh, 6. Motilal Oswal Most Focused MultiCap 35 - Direct Plan - Dividend Payout - Invest 2 Lakh, 7. Birla SL Top 100 - Direct Plan - Dividend Payout - Invest 2 Lakh, 8. Birla SL Frontline Equity - Direct Plan - Dividend Payout - Invest 2 Lakh, 9. ICICI Prudential Focused Bluechip Equity - Direct Plan - Dividend Payout - Invest 2 Lakh, 10. SBI Bluechip - Direct Plan - Dividend Payout - Invest 2 Lakh, 11. L&T Midcap - Direct Plan - Dividend Payout - Invest 1 Lakh. I have not opted for Debt Funds as I don't want short term investment and I don't want to have head ache of Taxes. Kindly advice on * above selection of funds, * number of funds, * my strategy, * if I should replace any fund with your best advice?

Aug 14, 2017 by Kumar, Delhi | Mutual Fund

While we feel sorry to hear that you have lost your job, we hope that you will get one soon.

You have rightly invested in mutual funds to built up a second income especially when you do not have a salary income now.

You have also opted for dividend payout plan so that you get some income from your investments. But what about when you get a new job? Then these dividends will be surplus income for you and you will again have to invest them. Therefore, a better idea would have been to invest in growth option and opt for monthly SWP. This way you could have drawn the SWPs till such time you required the regular earning flow and post getting the job you could have stopped it.

However, as you have already opted for the dividend payout option let it continue till you get a steady job. When you do not need the dividend income any more, do switch from the 'dividend payout option' to 'dividend reinvestment option'. In the dividend reinvestment option, instead of dividend payouts, you will get additional units whenever the dividend is announced.

You have selected good schemes from balanced fund, large cap funds. mid & small cap funds and diversified equity funds and the current allocation is 63% in balanced funds, 11% in diversified equity funds, 23% in large cap Funds and 3% in midcap Funds. This makes the portfolio quite balanced which suits your current risk profile and investment needs. Given your investment horizon, which is 5 to 10 years, this selection looks good.

You need not invest in debt funds as you already have good exposure towards debt through balanced funds. However, you can invest in liquid funds to park funds for your emergency needs or the surplus that is lying in your bank account.

Hope you find the above suggestions useful. Thanks for writing to Advisorkhoj.

View All Queries

You haven't found the answer for your queries? Do post your queries to us.
POST A QUERY