In financial planning, drawing up monthly individual budgets is of great help. “Putting them on paper will be very useful in avoiding unnecessary expenditure. The inflationary impact, too, should be factored into savings. What was ₹1,000 in the year 2000 is now ₹28,000, which indicates the inflationary impact,” said KS Rao, Head - Investor Education and Distribution Development, Aditya Birla Sun Life Mutual Fund.
He was speaking at a panel discussion on ‘Wealth Creation in Turbulent Times’, organised as part of the SURGE SME Conclave by BusinessLine in association Aditya Birla Sun Life Mutual Fund here on Friday.
Prediction is difficult, but having goals will help tide over market turbulence, Rao said. Asset allocation into the right baskets — say gold, house, funds and equities — is the way forward, he said.
Planning early for retirement is also vital and 23 per cent of Indians are now thinking about retirement savings, Rao said, further suggesting the need for men to discuss with their spouses and children, too.
Satish Kantheti, Managing Director, Zen Wealth, said asset allocation is a key decision in the equities market as it determines 80 per cent of the returns.
He advised retail investors to start with mutual funds with a proven track record of about 10 years of different business cycles. Thereafter, it is better to get into the equities market, he said.
Short-term bull runs
Markets tend to move in cycles, and one shouldn’t get too excited in short-term bull runs, said Kantheti. Responding to queries, he said real estate tends to be an attractive investment as it is easy to understand and manage an asset. Also, there are big success stories being told. Equities are harder for investors because just about 3 per cent of the people are involved directly in it, and it requires some study and tracking, he added.
“Invest in your health. Preventive healthcare is a good bet for individuals. An annual health check will go a long way,” was the advice of Sunitha Lingareddy, Managing Director, Lucid Medical Diagnostics, a fast expanding diagnostics chain.
Ajita Yogesh, Principal CEO of Hamstech Institute of Fashion and Interior Design Technology, narrated how the company’s finances plummeted at one point, but her husband Yogesh, an angel investor who is into stock broking, and careful planning, helped the company turn around and emerge strong.
KV Kurmanath, Senior Deputy Editor, BusinessLine , moderated the discussion.