I am from Kerala and I have a gold- and real estate-heavy portfolio. I have inherited 2 acres of land ( ₹25 lakh). I also have two flats—one in Kochi ( ₹70 lakh) and one in Pune ( ₹45 lakh)—on rent ( ₹50,000 in total). I live in my own flat in Bengaluru ( ₹1.3 crore). Apart from this, my wife has a small ancestral plot ( ₹15 lakh) and a villa ( ₹90 lakh) in her name. She also has gold jewellery worth nearly ₹1 crore. We also have fixed deposits (FDs) of ₹2 crore and bank deposits of ₹15 lakh. We want to move at least 60% to equity investments and the rest to debt instruments. Apart from our land parcels and our Bengaluru flat, we don’t mind liquidating the rest. We can liquidate 70% of the gold too and keep the rest for our daughter’s marriage. Please advise.
—Name withheld on request
As you rightly said, your asset exposure is skewed towards real estate and gold. The third asset class you have is fixed income in the form of bank deposits and FDs. It is good that you are aware of the same and want to tweak the asset mix. You can withhold the two land parcels along with your own residential asset. Likewise, gold exposure which is in the form of jewellery can also be brought down to ₹30 lakh.
Also, the bank deposits including FDs can be pruned and can be held purely from an investment perspective. At best, you may hold a small deposit to maintain a liquidity basket for yourself. This will open up your asset classes.
You can consider investing via mutual funds in the equity as well as debt asset classes. Since you will have a lump sum to invest, you can consider investing in a staggered manner via systematic transfer plans (STP), i.e., you invest the money in a debt scheme and a fixed amount at a fixed interval gets transferred to an equity scheme. This transfer can be done over, let’s say 12 months. If you are a conservative investor, you can further spread this to 24 months.
The equity exposure can be invested in large-cap, multi-cap and mid-cap funds and for the debt asset class, you can consider buying a short-term debt fund and opening a Public Provident Fund account, provided you are okay with locking the funds for the long term.
Surya Bhatia is managing partner of Asset Managers.