I am retired and have Rs 8 lakh surplus cash. I have no liabilities. Can I invest this amount in riskier portfolios such as equities or real estate?
After retirement, one should ideally opt for safer investments that yield a steady income flow. However, since you have zero liabilities and have surplus cash, you could look to invest it in asset classes that could possibly earn you capital appreciation. Make sure you are not dependent on this money for your income and are also prepared to face volatility in this investment. The amount of Rs 8 lakh may be a bit small to invest in real estate in any city. In the case of equities, you could invest through an equity fund that invest in large caps or blue-chips. You could also look to invest in a long-term bond fund, given that interest rates could possibly be headed lower. However, please make informed decisions, since you would not want to lose money after retirement.
I plan to buy two plots of land in Salt Lake area of Kolkata as investment. Is it a good bet? I don't know the city well.
It is imperative that you know the geography where you are investing in, or have some trusted person there. Otherwise, there is a possibility of making uninformed decisions, more so with land. Salt Lake in Kolkata had certain restrictions on land transfer. Although these have recently been relaxed, you will have to find the details. Moreover, it is very difficult to predict whether prices there would move up further and when.
I have held 3,000 Tata Motors shares since 1980. I am retired and have no need for funds. Still, should I start redeeming my holding, maybe in tranches?
Your investments in Tata Motors shares would depend on your overall asset allocation and equity investments. Assuming you have no other equity investments and as you are not dependent on this investment for retirement needs, you could look to gradually exit equities and move this money into fixed income instruments. If you have a higher risk appetite, you could restructure your equity portfolio to replace your single stock portfolio with a more diversified portfolio of blue-chip stocks.
In case you feel you do not possess the expertise for the same, you could choose an equity mutual fund focusing on large-cap or blue-chip stocks. The idea of suggesting this is to remove concentration risk from your equity investments.
Today, Rishi Nathany, CEO, Dalmia Securities, answers your queries
