TLDR;
This video provides three distinct investment strategies—Starter, Balanced, and Aggressive—for investing ₹10 lakh, tailored to different risk appetites and levels of investment experience. It details specific asset allocations within each strategy, including balanced funds, midcap funds, international funds, and gold, and explains the rationale behind each allocation. The video also highlights the historical performance of these strategies compared to the Nifty50, emphasizing the importance of diversification and managing risk. Additionally, it touches on the use of Systematic Transfer Plans (STPs) to mitigate entry risk and the significance of staying invested for long-term growth.
- Starter Strategy: Focuses on wealth building with minimal risk, allocating funds into balanced funds, midcap funds, international funds and gold.
- Balanced Strategy: Aims for higher returns by increasing exposure to midcap and small cap funds while still managing risk.
- Aggressive Strategy: Maximizes growth potential with a higher allocation to midcap and small cap funds, suitable for investors with a high-risk tolerance.
Introduction [0:01]
The video introduces three investment strategies designed to guide viewers on how to invest ₹10 lakh effectively. These strategies—Starter, Balanced, and Aggressive—are tailored to different risk profiles and investment experiences. The presenter emphasizes that these strategies have been tested and refined since 2015, helping numerous clients achieve significant portfolio growth while managing risk. The goal is to provide viewers with a clear understanding of which strategy aligns best with their individual circumstances.
Starter Strategy [0:34]
The Starter strategy is designed for individuals new to investing who want to build wealth without significant risk. It involves allocating ₹6 lakh to a balanced fund, ₹2 lakh to a midcap fund, ₹1 lakh to international funds, and ₹1 lakh to gold. Balanced funds automatically adjust between stocks and bonds based on market conditions, providing a buffer against potential losses. The midcap fund offers growth potential, while international exposure protects against India-specific economic shocks. Gold adds stability to the portfolio, typically performing well when the stock market declines. Historically, this portfolio would have grown to ₹42 lakh in 10 years, compared to ₹35 lakh for the Nifty50.
Performance of Starter Strategy [4:13]
A review of the portfolio's performance over the past 15 years shows that it has consistently outperformed the Nifty50 on a 5-year rolling basis. The 5-year median rolling return demonstrates that an initial investment of ₹10 lakh would have grown to ₹42 lakh, compared to ₹35 lakh in the Nifty50. The standard deviation, a measure of risk, is similar for both the portfolio and the Nifty50, indicating comparable risk levels with higher returns. This strategy is designed to build investing confidence, preparing investors to handle larger investments in the future.
Personal Finance Master Class [6:25]
The host announces a personal finance master class scheduled for September 20, 2025, covering various topics such as mutual fund selection, short-term and long-term goal planning (including retirement), health insurance, term insurance, and emergency fund management. Participants will also gain access to eight proprietary personal finance calculators used by the host in managing client funds. Registration details are provided, emphasizing limited seat availability.
Balanced Strategy [7:25]
The Balanced strategy is for investors with some understanding of investing who seek higher returns while managing risk. The allocation includes ₹4.5 lakh in a balanced mutual fund, ₹2.5 lakh in a midcap mutual fund, and ₹1 lakh each in a small cap mutual fund, international fund, and gold. This strategy reduces the allocation to balanced funds, thereby decreasing bond exposure, and introduces small cap mutual funds for potentially explosive growth. Small cap companies are ranked between 250 and 500 in the Indian stock market.
Small Cap and Mid Cap Performance [8:27]
Historical data over the past 20 years reveals that small caps and midcaps have higher return potential compared to the Nifty50. The 5-year rolling returns for SIPs show that small caps have an average return of 18.2% and midcaps 19.4%, versus 13.1% for the Nifty50. However, this higher growth potential comes with increased risk, as indicated by the higher standard deviation for small and midcaps. A ₹10,000 per month SIP at 18.2% would grow to ₹2.41 crore over 20 years, compared to ₹1.16 crore at 13.1%.
Performance of Balanced Strategy [10:13]
An investment of ₹10 lakh in the Balanced strategy would have grown to ₹44.4 lakh over the last 10 years, compared to ₹35.7 lakh in the Nifty50. The portfolio has consistently outperformed the Nifty50, with rolling returns of 16% compared to 13.6% for the Nifty50. While the standard deviation is slightly higher at 4.8 compared to 3.7 for the Nifty50, the returns justify the increased volatility. The strategy aims to teach investors to stay invested during market downturns, a valuable skill for long-term success.
Aggressive Strategy [12:14]
The Aggressive strategy is designed for investors with a high-risk tolerance seeking maximum growth. It involves allocating ₹2.5 lakh to large cap funds (or balanced funds), ₹3 lakh to midcap funds, ₹2.5 lakh to small cap funds, and ₹1 lakh each to international mutual funds and gold. This strategy maximizes exposure to the stock market, particularly in mid and small cap segments. An investment of ₹10 lakh in this portfolio would have grown to over ₹47 lakh in 10 years.
Performance and Risks of Aggressive Strategy [13:19]
The Aggressive strategy has consistently outperformed the Nifty50 on a 5-year rolling basis, with rolling returns of 16.7% compared to 13.6% for the Nifty50. However, this strategy comes with significant volatility and can test investors' nerves. Historical data shows that small caps can experience substantial declines over extended periods. For instance, small caps were down by 45% during a specific window, highlighting the importance of being able to handle market fluctuations. It's recommended to rebalance the portfolio every 2-3 years to maintain the desired asset allocation.
Importance of Starting and STP [16:07]
The presenter emphasizes that the most important thing is to start investing, regardless of the chosen strategy. A Systematic Transfer Plan (STP) is recommended for deploying large sums of money. Instead of investing the entire amount at once, the funds are invested in a liquid or short-term debt fund and then systematically transferred to the target funds over 6-12 months. This approach mitigates entry risk by averaging out the investment over time, reducing the anxiety associated with market volatility.
Fund Recommendations [18:24]
The video concludes by providing specific fund recommendations for each asset category. For balanced funds, the HDFC Balanced Fund is suggested. For large caps, a Nifty50 index fund is recommended. For midcaps and small caps, the Nifty Midcap 150 index fund and Nifty Small cap 250 index fund are advised, respectively. The international allocation is directed towards the NASDAQ 100 via the Motilal Oswal NASDAQ 100 ETF fund of fund, and the gold allocation is through the Nippon India Gold Fund.