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Best fund allocation strategy? Keep it simple and safe, says Dhirendra Kumar

In a recent interview with The Economic Times, Dhirendra Kumar, CEO, Value Research said that most new investors and small capital funds have fallen the most and the lesson here is that despite the relatively higher decline of 7% over the last three months, one will still be sitting on a gain of nearly 30%. Investors should just keep calm and invest more as and when they can and they should not try and increase it in any manner linked to the market and make sure that they do not need this money for a few years.

According to Dhirendra Kumar, if somebody is a first time investor and somebody who is 40 years old should always start with something which has a significant fixed income allocation because all long-term stories and everything is fine but when you are faced with 20% decline of your investment in a brief period of time, it is quite unnerving. So choose your vehicle carefully to begin with and that is needed only for the first two, three years.

The ideal strategy is that one should be a little more conservative. Maybe go for a balanced advantage or the equity saving fund because the idea should be to beat inflation and maybe a little more but one may not be with the balance fund. According to him the actual SIP number will be about 15-20% but it will keep rising if it is not getting fixed and one has to look at it in terms of the monthly inflow which is non SIP. So, SIP reporting might get increased by 10-15%.

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