THE ECONOMIC TIMES

“Don’t hit the Panic Button Just Diversify” – 21 June 2013. 

VIshal Dhawan on importance of asset allocation while market conditions may make you feel anxious: 

“In choppy markets like this, diversify and do not go overboard. Stick to your asset allocation.”

“Review your asset allocation periodically. In case it has strayed away more than 5% from the original recommended for you, rebalance your portfolio and bring it back to the original allocation.”

ECONOMIC TIMES WEALTH

“Should you invest in mid- and small-cap funds?” – 17 June 2013. 

(Despite the high risk associated with this category, you should allocate a percentage of your portfolio to this category since it is bound to deliver high returns in a growth market like India.)

Vishal Dhawan holds that this is true only over longer time horizons: “The average fund investor holds a fund for barely two years or less. Over such short time horizons, the volatility of mid- and small-cap funds tends to be higher.”

(Sometimes when a fund’s asset size grows, it moves into the large-cap category, which alters its character. It no longer fulfills the purpose for which it was originally included in the portfolio.)

Vishal Dhawan on choosing such fund: “If a good track record is accompanied by a large AUM size, it could lead to problems.” He suggests that in the mid- and small-cap space, one should invest in a fund with an AUM size that is bigger than 300 crore and smaller than 1,500 crore.

TIMES OF INDIA

“Are retirement homes for you?” – 22 July 2013. 

(These are not run-down old-age homes, where people live in pitiable conditions. Today’s retirement homes take care of all the needs of senior citizens, and do it in style.)

By living on rent initially, you hedge your bets. As financial planner Vishal Dhawan points out: “This is the best model from the point of view of flexibility. You get to keep your capital and can use it to generate a cash flow. If the service provider does not deliver, you have an option to exit.”