Balanced investing is the equivalent of putting your eggs in different baskets. The greater the variety of investments you have, the less you will be hurt by poor performance of a single investment. Because investment markets generally move independently - and unpredictably - balanced investing, to some degre, ensures that at least one part of your portfolio is performing relatively better than the others.

Experts estimate that the investment mix - the combination of money market, income, and growth investments - accounts for more than 80% of a portfolio's return over the long term. In other, words the allocation of investment to each investment type is far more important than the selection or timing of individual investments.

This Personal Investment Planner is speciafically designed to help you determine an investment mix that might be right for you. The PIP enables you to ask yourself all the questions that need to be answered and think of the things that hadn't occured to you earlier. In three easy steps you'll be on your way to managing your money more effectively. Once you have discovered the kind of investor you are, the PIP will suggest investment balance that would be right for your profile, along with tips on available investments that would best cater to your needs. Once you select a portfolio, review it at least semi-annually, or when your goals or lifestyle change, to ensure the investment mix remains right for you.

• Your goals for your money.
• Your investment time horizon.
• Your risk tolerance.

Step 1: First, identify your investment goals.Why would you want to invest today?(Please tick the ones that apply to you.)

Save for retirement Care for parents or elders.
Supplement my income Pay off or reduce debt.
Build an investment account Specific purchase(car, vacation, etc.)
Provide estate for heirs Save for higher education
Buy a home Other

Emergency fund
Have you considered unforseen expenses? Bacause an unexpected expense such as house repairs/renovation, medical expenses, or maybe car repairs can be a serious setback if you are not financially prepared. You should maintain an emergency fund of a size that suits your current life style and expenses. It should consist of liquid investments to ensure money is available when it is needed.

Step 2 :

A) The statement that most clearly defines my investment objective is:

I want to ensure my capital is safe and I so not need income at this time.
I require a steady income from my investments.
I have some need for income from my investments.
I would like long-term growth and I am less conserned about income at this time
I am only intrested in growth over the long term.

B) I plan to start withdrawing money from my investment plan in:

Under 2 years (short-term)
2-5 years (mid-term)
6-10 years(mid-to-long term)
More than 10 years (long-term)

C) My current investments are best described as follows:

Mostly stocks or equity mutual funds
Mostly bonds or income funds
A mix of investment in money market, bonds, stocks and mutual funds
Mostly government securities or fixed income securities
I have few or no investments

D) Investments with higher returns typically involve greater risk. With this in mind, if I held a Rs. 10,000 investment for 4 years, with widely varying risk/reward potential which of the following options would I choose? (Best outcome/Worst outcome in Rs.):


E) I respond to fluctions in my investments in the following manner:

I will sell quickly anytime my investment loses value or money.
Day-to-day market movements make me uncomfortable. If an investment loses value over a 3 to 6 month period. I am likely to sell it and look for a better alternative.
I realise that markets may rise and fall randomly. I usually watch mu investment for at least a year before making changes.
I realise that markets may rise and fall randomly. I usually watch mu investment for at least a year before making changes.

F) I am:

Under 30 years
30 - 45 years
46 - 55 years
56 - 65 years
Over 65 years

G) The current value (in Rs.) of my investment portfolio, including investments held at other institutions(e.g. mutual funds, stocks, bonds, fixed income, savings/cheque accounts) but excluding real estate is

Under 50,000
50,000 -150,000
150,000 - 300,000
300,000 - 500,000
Over 500,000

H) My income (in Rs.) per month is in the following range :

Under 15,000
15,000 - 30,000
30,000 - 50,000
50,000 - 75,000
Over 75,000

Cash/Money Market Fund : The aim of money market funds is to provide easy liquidity, preservation of capital, and moderate income. These schemes generally invest in safer short term instruments such as treasury bills, certificates of deposit, commercial paper, and inter - bank call money. Returns on these schemes may fluctuate depending upon the intrest rates prevailing in the market. These are ideal for corporate and individual investors as a means to park their surplus funds for short periods.

Fixed Income/Income Fund : The aim of income funds is to provide regular and steady income. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, and government securities. Income funds are ideal for stability and regular income. Capital appreciation in such schemes may be limited.

Balanced Fund : The aim of balanced funds to provide both growth and regualr income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities inthe proportion indicated in their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace, or fall equally when he market falls. These are ideal for investors looking for a combination of income and moderate growth.

Blue Chip Equity : This comprises shares of particularly well-known and well-established companies, which have shown consistent growth over the years, have bright future prospects, and are expected to continue sustained growth in the future.

Growth Stocks/Growth Fund : The aim of growth/equity funds is to provide capital appreciation over the medium-to-long term. Such schemes normally invest a majority of their corpus in equities. It has been provided that stocks have outperformed most other kinds of investments held over the long term. Growth schemes are ideal for investors having a long-term outlook;seeking growth over a period of time. Stocks usually entail higher short-term risk than bonds, but have historically produced the best long-term returns. Equity funds often hold small amounts of money market investment to meet redemptions; some hold larger amounts of money market investments when they cannot find any stock worth inveting in or if they believe the market is about to head downward. These schemes are not for investors who seek regular income or need their money back in short term.

Emerging Stocks/Sectoral Fund : Industry/sector-specific schemes invest only in the industries or sectors specified, or various segments such as 'A' Group shares, or initial public offerings as specified in theoffer document. The investment of theses funds is limited to specific industries like infotech,FMCG, pharmaceuticals, etc.