ASK OUR PLANNERan asset allocation approach for
your financial goals, including
retirement. With such a long
term time horizon, you can your
monthly savings in equity
oriented funds (Large Cap /
Multi Cap / Mid Cap sub
categories), as the debt portion
can be fulfilled through your
EPF. Timely rebalancing
(shifting gains from Equity to
Fixed Income upon reaching
certain threshold - % in
deviation - and vice versa) of
your portfolios is equally
important to reduce portfolio
risk. If you do not mind the
liquidity restrictions, you can
also open NPS and invest some
portion into it, as the basic
investment process is the same
as those of mutual funds & auto
rebalancing is possible.
It is also important that you are
able to achieve your other
financial goals, apart from
retirement, as and when they
occur. This would mean
budgeting for your needs and
investing as per different
financial goals at the same time,
in appropriate instruments and
proportion. A comprehensive
financial plan will take into
consideration all financial goals
of your life, protection
requirements (insurance) and
suggest you optimal strategies
to achieve them. ICICIdirect
offers a customized financial
planning service to its
customers. To know more
about this service, you may
write to us at
[email protected].Q. I have a ULIP plan taken since a
year. As the plan has an an option of
4 switching of funds in a year, can
you guide me as to what factors
should be looked out while
switching funds?- Chirag Joshi
A. Option of switching funds
highlights an important feature
of ULIPs as an investment
product. Policyholders have the
flexibility to move from
underperforming fund/asset to
outperforming fund/asset.
However as exciting it may
sound, it is very difficult to time
the perfect entry and exit. Ill
timed switches can significantly
deteriorate the long term
performance of your ULIP. 4 free
switches in a year do not mean
you have to act on it
necessarily.