How Avadhoot Joshi evaluates his investment portfolio

Published: December 28, 2020 at 10:53 am

As regular readers may be aware, we publish a personal financial audit each December – this is the 2020 edition: How my retirement portfolio has performed in 2020. This time, we asked regular readers to share how they review their investments and track financial goals. Suhas was the first to do this: How Suhas tracks his MF investments and reviews financial goals. This is the second such audit by Avadhoot Joshi. I am delighted to see the strategies discussed in goal-based portfolio management at play

introduction – Hi! Myself Avadhoot Joshi. I am a Mechanical Engineer working at BHEL since 2012 in Chennai. Frankly speaking, even after six years working in BHEL, I was not aware of Personal Finance (except mandatory EPF which was the best thing happened to me) until I joined a Facebook group ‘Asan Ideas For Wealth’. There I was introduced to Ashal Jauhari Sir and Pattamiraman Sir. With guidance from Ashal Sir (through personal chat) and Pattabiraman Sir (through Freefincal), slowly I took control of my finances. 

After reading Pattu Sir’s Personal Finance Audit for the last two years, the thought of making one for my investments came in mind. And here it is. 

ARE THE BASICS COVERED?” – Favourite question from Ashal Jauhari on Facebook group ‘Asan Ideas for Wealth’. This question has changed my financial life totally since I joined the group in Feb’2018, so let’s start my audit with this question.

ARE THE BASICS COVERED?


  • TERM INSURANCE – DONE. With Max Life Insurance. Why? – Premium was the lowest compared to others.
  • HEALTH INSURANCE – Being in PSU, cashless In-Patient health facilities in some reputed hospitals around the posting location. Other hospitals (for both Inpatient & Outpatient) must be reimbursed after the claim (non-medical deductions and TDS). So currently comfortable with this. Not opted for separate Personal Health Insurance. Maybe in future, will opt for separate cover as well.
  • EMERGENCY FUND – Current emergency fund is equal to 4 months’ expenses. I am slowly planning to increase it to 6 months’ expenses by the next audit (Dec’2021), being in PSU, comfortable with current Emergency Fund. 

The Emergency fund is parked as below – 

Saving Account70%
UTI Arbitrage Fund25%
Quantum Liquid Fund5%
  • GOALS – Here comes the next and important part of the audit. Currently focusing mainly on three goals – Retirement (27 years away), Kids Graduation (14 years away) and Car (1 year away).
  • Retirement (Officially 27 years away) – Currently I am 33 years old. Wife is 28 years old homemaker. Since beginning my retirement portfolio is debt-heavy because of 2 reasons – 1. Being in PSU, hefty PF contributions from self and employer. 2. Started investing in equity very late – in 2018, i.e. after almost six years of employment. 

I have to invest as much as possible into equity part of the portfolio to catch up and need not to bother about asset allocation until my Equity Part grows to at least 50% of total retirement corpus. 

I used the opportunity of redeeming my EPF during this COVID Period and invested gradually during Apr-July 2020 in equity to somehow bring equity part up. And equity market upswing from April also helped a lot.

The change in asset allocations from April’20 to Dec’20 is – 

MONTHDEBT %EQUITY %
Apr-2095.24%4.76%
May-2092.78%7.22%
Jun-2091.49%8.51%
Jul-2090.25%9.75%
Aug-2089.33%10.67%
Sep-2088.87%11.13%
Oct-2088.60%11.40%
Nov-2088.21%11.79%
Dec-2086.79%13.21%

Debt Part of Retirement Portfolio – EPF

Equity Part of Retirement Portfolio – UTI Nifty Index Fund (75%) & UTI NN50 Index Fund (25%) – manual SIP every month. 

Current Retirement Corpus is equivalent to 4.5 times the current yearly expenses (Expenses which are likely to be continued after retirement are considered). During last one year, I have added retirement corpus equivalent to six months of expenses.  

  • Kid’s Graduation (14.5 years away) – Currently Kid is 3.5 years old. Started investing for his education corpus when he was 1.5 years old (November’2018) with 100% Equity Allocation. The plan is to reduce equity allocation by 6.25% every year.
Avadhoot Joshi personal finance audit 2020 Plan of asset allocation changes over years
Plan of asset allocation changes over the years

Returns expectations considered while doing the investment plan – Equity 10% & Debt 6%.

Avadhoot Joshi personal finance audit 2020 investment journey showing expected and actual corpus
investment journey showing expected and actual corpus

Since the investment journey is in the initial stage, asset allocation is being taken care of by adjustments in every month manual SIP in Equity/Debt part. So until now, rebalancing is not done as such. 

Debt Part of Kids Education Portfolio – PPF (13.40%) & ICICI Arbitrage Fund (1.45%)

Equity Part of Kids Education Portfolio – Parag Parikh Long Term Equity Fund (85.15%)

  • Car (1 Year Away) – Planning to buy a second-hand car by next year. Being a very short term plan, all amount is being saved in debt instrument only. Currently, 50% of the targeted corpus is accumulated, and balance 50% will be accumulated in the next six months.

The accumulated corpus is equally divided into FD and saving account.

ASSETS-  Since all assets are linked to some goals, it is straightforward to keep track.

LIABILITIES – Only one Loan, i.e. Home Loan, is running since 2017. I am planning to close it by 2027 with increased EMI. This is why accumulating retirement corpus equivalent to only six months’ expenses instead of 1 year as expected during last year. But I am OK with it right now because becoming debt-free as early as possible is an emotional requirement for me.  

The Y-o-Y changes in Assets, Liabilities and Net-worth are – 

DECEMBER 2019DECEMBER 2020
ASSETS100.00129.41
LIABILITIES85.4380.58
NET WORTH14.5748.83

PLAN FOR 2021:

  1. To increase emergency fund from the current four months’ expenses to 6 months’ expenses.
  2. To improve equity portion in the retirement portfolio to 18% from the current 13%.
  3. To add retirement corpus equivalent to at least one year of expenses.
  4. To continue investment for Kid’s education as per plan. 

Thank you!!!
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Editore note: Thank you for sharing your well-laid plans Avadhoot. We wish you all the very best.

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