I am substantially invested in mutual funds and shares, as well as ulips, life insurance, NPS etc. Recently my PPF account matured and wondering where should I invest the lumpsome amount? Appreciate your suggestions.
Answer
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There are plenty of ways one can invest lump-sum amount, but to be wise is to think of the tax consequences as well. The best way to invest is not just in one particular segment but to divide the sum into parts and make an investment in different funds.
Such as-
Debt Fund: this is a kind of mutual fund, in this investment is done through fixed income securities like bonds and T bills. It can be done through MIP, Liquid funds, STP and FMP. For higher returns holding period ranges between 3-8 years.
Equity mutual fund: this is a kind of fund in which you are heavily invested in stocks. It can fetch more returns if it is systematically done. Say, there’s a combination of Small Cap, Mid Cap, and Large Cap fund.
Gold ETF: It is basically exchange-traded fund, works similarly to an Individual stock where trade is on an exchange basis. You don't own any gold, instead, receive the returns in this scheme with cash equivalent to a particular amount of Gold.
Therefore you can consider investing in a combination of funds such that the return received is higher and risk is minimized.
Where to invest matured PPFdepends upon your risk appetite and your age. Risky investments comprise equity, real estate etc. Safe investments include bank feposits.Risk and age are inversely related. You seem to have a diversified portfolio. But there is no mention of bank deposits.