1. At 40, a well-diversified asset allocation plan that addresses your personal risk comfort foremost is desirable.
2. You could allocate upto 75% of your monthly investible surplus to Equity MFs and 25% to a short-term Debt MF.
3. Activate your Equity MFs SIPs as:-
a) 10% in large cap fund,
b) 15% in large & midcap fund,
c) 50% in multicap fund, and
d) 25% in small cap fund.
4. Utilize your short-term Debt MF for:-
a) Maintaining your contingency fund of 6 months expenses,
b) Investing your 25% monthly debt allocation,
c) Periodic rebalancing of your Equity MFs for retaining your debt and equity ratios,
d) Funding your short-term goals, and
e) Fulfilling your medium- and long-term goals by channelling redemption of your Equity MFs into it.
5. Aim for continuous SIPs up to 25% of your pre-tax monthly income during your earning years, say for the next 20 years, irrespective of market volatility and economic cycles.
6. Ensure that the portfolio is also diversified across AMCs, which helps to reduce risk if any of them go downhill for an AMC's own unique reasons.
7. Redeem only for fulfilling goals earmarked against each of your MFs.
8. While nearing retirement, you could moderate your age-related risk by shifting a part of your corpus to a Hybrid Aggressive fund, as a rebalancing exercise.
9. At 40, you should also review your contingency fund, term and health insurance, besides making efforts to start reducing your borrowings, if any.
2. You could allocate upto 75% of your monthly investible surplus to Equity MFs and 25% to a short-term Debt MF.
3. Activate your Equity MFs SIPs as:-
a) 10% in large cap fund,
b) 15% in large & midcap fund,
c) 50% in multicap fund, and
d) 25% in small cap fund.
4. Utilize your short-term Debt MF for:-
a) Maintaining your contingency fund of 6 months expenses,
b) Investing your 25% monthly debt allocation,
c) Periodic rebalancing of your Equity MFs for retaining your debt and equity ratios,
d) Funding your short-term goals, and
e) Fulfilling your medium- and long-term goals by channelling redemption of your Equity MFs into it.
5. Aim for continuous SIPs up to 25% of your pre-tax monthly income during your earning years, say for the next 20 years, irrespective of market volatility and economic cycles.
6. Ensure that the portfolio is also diversified across AMCs, which helps to reduce risk if any of them go downhill for an AMC's own unique reasons.
7. Redeem only for fulfilling goals earmarked against each of your MFs.
8. While nearing retirement, you could moderate your age-related risk by shifting a part of your corpus to a Hybrid Aggressive fund, as a rebalancing exercise.
9. At 40, you should also review your contingency fund, term and health insurance, besides making efforts to start reducing your borrowings, if any.