Investment strategy review (Long term)

Hi Tushar,
There are a few things that concern me but I would like to understand a few things before proceeding.

1. How did you decide the allocation % as 17k / 13k? Why not 12k/18k -or- 10k/20k?
2. Continuing along the same lines, how did you get the numbers of 6/4/3k for SIPs?
3. You wrote

a. What is the objective here? What’s driving the need for safe investment?
b. What do you mean by safe here (zero volatility? low chance of capital erosion? else?)?

Imo, this could be a very contradictory statement. If looking for a safe investment then one needs to give up the return expectation. Further, if your largest allocation is looking for safety, you must have a reason. What’s the reason? What’s driving this? From the information you have shared, this part is not clear.

Further, this contradicts your entire approach. On one hand, there is something that is causing you to put ~55% of your PF (17/30k) in safe investments. On the other hand, you seem unconcerned in erasing 10% of PF (3/30k). It’s okay if you want to learn, but in that case, 3k can’t be considered as a part of the PF since you’re going to lose it (analogy: you invest in college tuition fees to learn but would you consider it as a part of PF?).

I am assuming your risk appetite is towards the lower end but you’ll need to clarify it. There are several ways to measure it and I suggest that you spend some time reading more here.

I am not a SEBI registered research analyst or an institution. I am very hesitant to comment on the selection of the funds. I do feel that for a risk-averse investor, there can be better spaces than small-cap funds but then again it’s very difficult to comment on anything without understanding your profile and needs that are driving your investments.

The allocation strategy imo should be very person-specific. One can start from a random strategy but with time, it could get very difficult to practice (and sometimes optimize it)

In general, there are several ways to allocate. The ones that I find easy to practice are:

1. Goal-based
2. Ambition based (I forgot the exact jargon here)

For goal-based, you first define the amount of capital you would need in the future and then back-calculate your investments making some realistic assumptions on the returns.
For ambition-based, the goal is to maximize returns. One doesn’t have a target in mind but looks to mix and match the best combination of his risk appetite and returns.

Disclaimer: I am not a SEBI registered research analyst or an institution. These are my personal views. My views keep on changing with learnings and time and I often go wrong.