fincash logo SOLUTIONS
EXPLORE FUNDS
CALCULATORS
fincash number+91-22-62820123
Best Investment Plan | Best Investment Options - Fincash

Fincash » Mutual Funds » Best Investment Plan

Best Investment Plan: How to Create a Financial Plan?

Updated on March 17, 2019 , 341 views

The best Investment plan is a Financial plan that gives us an opportunity to save money for our future needs by Investing in financial instruments. There is no such thing as a good investment plan or a bad investment plan.

Each plan can be good or bad depending on how well you create your plan basis your needs. You might choose the best investment plan with high returns or a short-term investment plan with minimal returns depending on your goals. Therefore, it is important to create an investment plan wisely keeping in mind your Financial goals. We have listed some of the steps to create the best investment plan.

Ready to Invest?
Talk to our investment specialist
Disclaimer:
By submitting this form I authorize Fincash.com to call/SMS/email me about its products and I accept the terms of Privacy Policy and Terms & Conditions.

Best Investment Plan: How to Create?

The basic steps in creating an investment plan are as follows:

Investment-Plan

Let me try to explain each step mentioned above:

STEP 1: Risk Assessment

One needs to understand his or her risk profile here for investing. Risk profile would depend on various factors such as:

  • Age
  • cash flows (salary, recurring income etc.)
  • Dependents
  • Ability to tolerate the loss
  • Requirement of cash/money in the near term
  • There are basic questionnaires that take an individual through this process and ultimately give a number or a rating which give the risk rating of an individual. The risk rating could be like:
Risk Ratings
Aggressive
Moderately Aggressive
Moderate
Moderately Conservative
Conservative

Once you have your Risk assessment or rating in place, the next step is to choose the Asset Allocation.

STEP 2: Asset Allocation

Putting all your eggs in one basket is never a good idea, and hence one needs to diversify their holdings across asset classes (equity, debt, cash, commodities {Gold}). This asset allocation will ensure that various asset classes perform over time and give a good return on the overall portfolio.

A sample asset allocation could be:

Aggressive Moderate Conservative
Annual return 16% 14% 11%
Annual Standard Deviation 15% 10% 6%
Debt 30% 50% 70%
Equity 60% 40% 20%
Commodity 10% 10% 10%
Total 100% 100% 100%

Given the risk that one can take, different allocations to equity are proposed. The higher the risk-taking ability more the allocation to equity. There are also various thumb rules like equity allocation to be 100 - (age of the person in years) and rest to be in debt.

Best Mutual Funds for Aggressive Investors

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2018 (%)Sub Cat.
Motilal Oswal Multicap 35 Fund Growth ₹25.897
↑ 0.03
₹12,7022.30.11.416.9 -7.8 Multi Cap
Kotak Standard Multicap Fund Growth ₹35.033
↑ 0.18
₹21,6824.23.510.917.519.1-0.9 Multi Cap
Principal Emerging Bluechip Fund Growth ₹103.18
↑ 0.27
₹2,0061-3.9-0.11822-11 Large & Mid Cap
Invesco India Growth Opportunities Fund Growth ₹34.09
↑ 0.13
₹1,1153.51.28.516.816.5-0.2 Large & Mid Cap
DSP BlackRock Equity Opportunities Fund Growth ₹220.034
↑ 1.06
₹5,4164.32.14.41617.6-9.2 Large & Mid Cap
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 19 Mar 19

Best Mutual Funds for Moderately Aggressive Investors

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2018 (%)Debt Yield (YTM)Mod. DurationEff. MaturitySub Cat.
Reliance Gilt Securities Fund Growth ₹24.6148
↓ -0.02
₹9290.86.99.79.187.14%4Y 4M 6D6Y 2M 1D Government Bond
Aditya Birla Sun Life Government Securities Fund Growth ₹51.6999
↓ -0.06
₹2310.36.58.58.86.96.89%2Y 6M3Y 6M 18D Government Bond
ICICI Prudential Gilt Fund Growth ₹63.2908
↑ 0.02
₹9861.24.48.58.66.86.88%2Y 7M 28D3Y 8M 16D Government Bond
UTI Gilt Fund Growth ₹40.4469
↑ 0.02
₹4570.457.78.96.37.15%3Y 6M 14D4Y 11M 5D Government Bond
Axis Strategic Bond Fund Growth ₹18.0726
↓ -0.01
₹1,24824.87.28.66.79.63%2Y 3M 18D3Y 1M 6D Medium term Bond
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 19 Mar 19

Best Mutual Funds for Moderately Conservative Investors

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2018 (%)Debt Yield (YTM)Mod. DurationEff. MaturitySub Cat.
Aditya Birla Sun Life Corporate Bond Fund Growth ₹71.2582
↓ -0.01
₹15,1342.35.27.7878.45%1Y 1M 17D1Y 5M 8D Corporate Bond
HDFC Corporate Bond Fund Growth ₹20.6815
↓ -0.01
₹11,7932.65.47.68.16.58.51%2Y 4M 10D3Y 2M 8D Corporate Bond
HDFC Banking and PSU Debt Fund Growth ₹14.9498
↓ -0.01
₹2,8722.55.46.97.85.98.77%1Y 11M 23D2Y 6M 7D Banking & PSU Debt
DHFL Pramerica Short Maturity Fund Growth ₹33.5246
↑ 0.01
₹3921.93.75.87.45.511.87%9M 18D11M 8D Short term Bond
UTI Banking & PSU Debt Fund Growth ₹14.8779
↓ 0.00
₹403-0.32.357.46.88.08%1Y 5M 16D1Y 10M 17D Banking & PSU Debt
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 19 Mar 19

Best Mutual Funds for Conservative Investors

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2018 (%)Debt Yield (YTM)Mod. DurationEff. MaturitySub Cat.
Franklin India Ultra Short Bond Fund - Super Institutional Plan Growth ₹26.1833
↑ 0.00
₹16,7122.55.29.298.79.53%4M 20D5M 27D Ultrashort Bond
Aditya Birla Sun Life Savings Fund Growth ₹367.735
↑ 0.07
₹14,0182.24.47.98.17.68.39%3M 22D4M 2D Ultrashort Bond
DHFL Pramerica Insta Cash Fund Growth ₹241.35
↑ 0.05
₹1,7941.83.77.67.27.47.48%1M 10D1M 10D Liquid Fund
JM Liquid Fund Growth ₹50.7882
↑ 0.01
₹2,5591.83.77.57.27.47.14%13D13D Liquid Fund
Indiabulls Liquid Fund Growth ₹1,809.57
↑ 0.36
₹5,0451.83.67.47.27.36.93%26D29D Liquid Fund
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 19 Mar 19

The above can be used as a guidance given the type of investor one is. The proposed asset allocation also gives a projection as to the expected annual return per annum and the expected variation in returns (annual standard deviation).

STEP 3: Product Selection

Let’s, for example, take the individual here is aggressive and hence the equity allocation to be 60%. So proposed investment allocations would be (for an investment of 10 lakhs):

Equity (60%) = 6 lakhs

Debt (30%) = 3 lakhs

Gold (10%) = 1 lakh

One should try and do some research to get a good scheme. Various rating agencies like CRISIL, Value research, Morningstar etc. provide funds ratings. Using these ratings and getting some top performing funds would ensure that we try and select good performing funds into the portfolio.

In the example,

  • For equity one can choose a mix of large-cap and mid-cap
  • Debt can be spread into a mix of long term and short term
  • For gold, one can use gold ETF based Mutual Funds

STEP 4: Monitoring & Re-Balancing of Mutual Funds

Monitoring your investment is a critical step and one should review the portfolio at least once a quarter and rebalance at least once a year. Also, looking at scheme performance is also important and if there are performance issues one should replace the scheme with a better performing one (also taking into account the tax considerations).

How to Invest in Mutual Funds Online?

  1. Open Free Investment Account for Lifetime at Fincash.com.

  2. Complete your Registration and KYC Process

  3. Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!

    Get Started

These are the basic steps to create an investment plan for any sum of money. Hope this gives some direction to create an investment plan for a secured future. Happy investing!

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
How helpful was this page ?
Rated 4.5, based on 2 reviews.
POST A COMMENT