A perfect balance

R K Agrawal is not one of those retirees who always want to play safe. In fact, he started fund investments primarily out of his voluntary retirement benefits. Hailing from the temple town of Varanasi, Agrawal is a voracious reader today in his retired life. This interest stems from the simple fact that he wants to be on top of key investments trends. Agrawal's long-term goal during the last 15 years has been to build a retirement corpus for his own old age without having to depend on his sons.

Humble beginning
Agrawal has an MBA degree from BHU, Varanasi, and is an arts graduate. He began his professional career in 1980 as a marketing executive with a public-sector company and retired in 2005 as general manager with a private-sector enterprise. His work experience spans 25 years in marketing. It was in 2010 that he settled in Pune.

It was some time around 2003 when he started fund investments. He also became a regular subscriber of Wealth Insight. He confesses that he is now an avid daily reader of almost all the articles on Value Research Online.

"After retirement, I became a long-term equity-fund investor, trading stocks occasionally for short-term gains," he said.

His earliest fund investments were in form of Rs 2 lakh each in HDFC Tax Saver, ICICI Pru Dynamic (now ICICI Prudential Multi Asset Fund), Kotak Opportunities (now Kotak Equity Opportunities), Reliance Vision (now Nippon India Vision) and SBI Bluechip funds. Are these funds still with him? "No, I redeemed all of them after three-five years, at various intervals, during periodic rebalancing of my portfolio and for initiating new purchases. Those funds had fulfilled their role of helping me realise my medium-term goals," says a confident Agrawal.

Return-wise, he has nothing to complain. His ten-year CAGR (2016) returns are at 15 per cent on HDFC Capital Builder (now HDFC Capital Builder Value Fund) and 18 per cent on ICICI Pru Value Discovery. He credits this show to good homework.

"Frankly speaking, I have not faced any worrisome turbulence in my portfolio, although I know that the market has been on a roller coaster in most of the years during the last decade. I attribute this solely to stringent rebalancing, which takes greed out of the investment equation," he adds.

His mutual-fund portfolio comprises a basket of diversified equity funds, balanced funds and thematic funds. He has around 2 per cent of the corpus in a liquid fund. Around 5 per cent is in his bank as an emergency flexi deposit.

Don't be surprised when you hear that his current regular monthly investment in mutual funds is around Rs 1 lakh, which includes fresh and rebalanced amounts.

Lesson from parents
Agrawal wants to stay focused. "I have remained a serious investor from the time I started mutual-fund investments in 2003. Prior to that, I had done short-term equity trading for several years. The profits generated from them, along with my salary savings in bank and post-office instruments, had enabled me to buy my residential flat without taking any home loan. This risky style was largely possible as I was young and with a secure employment," he admits.

A responsible son, Agrawal planned an early retirement to take care of his ailing parents. His aim was to always remain debt-free and this required a solemn commitment. For him, the term 'investment' means assessing your real net worth and then growing it through products which you understand for meeting your goals in a disciplined manner by regularly monitoring, reviewing and rebalancing your portfolio.

His father unknowingly played a big role in his investment experience. "I had observed that my father, a self-made small-town businessman, kept all his savings in bank and post-office instruments, which were not contributing towards my parents' welfare when they needed them in their old age," Agrawal says.

"My primary goal till 2015 was to take care of all the expenses of my ailing father, who had retired at the age of 48 but lived till he was 82. He had no health insurance but recurring medical expenses. My current goal is to continue taking care of my ailing mother, who is now 81 and faces the same predicament. My concurrent long-term goal during the last 15 years has been to build a retirement corpus for my own old age, aiming for 90, without having to depend on my sons," the investor says.

Agrawal hopes to achieve this goal in the next ten years, when he will turn 70.

Are there any other goals that are left? Agrawal says he is satisfied that all his other short-term and mid-term goals have already been fulfilled during the last 15 years. Some of them were: a two-wheeler, a four-wheeler, health insurance, emergency corpus, sons' higher education and a second home for rental income and asset diversification.

Being a Value Research fan
Talking about Value Research, Agrawal says Dhirendra Kumar's column 'First Page' is the USP of Value Research as it explains complex financial and economic concerns in a lucid manner. Sharing one's ideas with various readers through the Disqus forum also helps in rejuvenating one's thought process.

"Further, all the 15 tools on Value Research Online are of immense value to a DIY investor like me. Lastly, the Learn and Ask sections are extremely helpful," he said.

"Since I have been a DIY fund investor for more than a decade, I now have nine funds in three sets; the first comprising multi-cap (now flexi-cap), mid-cap and sectoral funds; the second, large-cap, small-cap and thematic funds; and the last, balanced funds. All these funds are considerably diversified and have been selected with the help of VRO tools. They have specific medium-term and long-term targets assigned to them," he said. "I maintain several analytical datasheets to monitor their fund managers' allocation patterns and trends, and this continuous process enables me to aim for optimal returns, along with regular rebalancing," Agrawal signs off.

This story first appeared in the November 2016 issue of Mutual Fund Insight.

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