Wealth Management Services Provide Guidance to Investors

KOTTAYAM: An investor Mathew Varghese lost money in a fixed deposit investment five years ago and is now reluctant to invest in mutual funds, but he is tempted by the returns. However, he does not know what is the right investment.

There are many others like Mr Varghese, who want to get good returns on their investment, that's where wealth management services help by guiding them where to invest and in what proportion.

K Sudheer Kumar, Senior manager of Geojit Financial Services Ltd said, "The risk taking capability of an investor depends on his age and is calculated by subtracting it from 100."

If an investor is 22, and is investing in mutual funds, 78 per cent of his savings should be in high risk funds such as equities and the rest of it in balanced, liquid and debt funds, which are less risky.

Consequently, an investor should adjust his portfolio (group of assets - such as stocks, bonds and mutual funds) according to his age to reduce the risk and increase the return, said Mr Kumar.

An investor in the age group of 25-30 should take more risk by investing almost 75 per cent in equities and as he reaches 50 his portfolio should have more debt fund and capital protection funds (base investment is guaranteed).

DBS Cholamandalam Branch manager Jilis Tom said that for long-term investors (who are ready to stay invested for three to five years), the risk reduces significantly and the returns are also handsome. Funds like UTI Infrastructure Fund growth and Sundaram Select Focus growth have given more than 300 per cent return in three years.

"Never keep all your eggs in one basket," says Mr Tom, explaining how an investor needs to diversify his investments, which could easily be done by making his portfolio a combination of fixed deposits and different types of mutual funds.

Author: Anand Basu
Source: Geojit Financial service and DBS Cholamandalam office in Kottayam.