BUSINESS LINE's INVESTMENT WORLD
From THE HINDU group of publications
Sunday, February 25, 2001













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Investing for a secure future


A SURVEY on personal financial planning was carried out recently, which revealed two interesting findings:

*Saving for retirement was not among the top priorities of investors, more so, if the investors were below 50 years of age.

*`Safe' options such as bank deposits and fixed income instruments were considered more suitable when investing for retirement, whereas equities were considered more `risky'.

We believe such an approach towards retirement planning will lead to sub-optimal results and, perhaps, even an unsettled retired life. When peace of mind and enjoyment should be ruling our lives, worries about finances will remain. Why do we adopt such an attitude? Rising life expectations means we will have to provide for ourselves, long after our employment ends. In other words, we should save enough to maintain our life styles, even 20-30 years post-retirement.

When we invest in fixed income, we do not get ahead with time, we only stand in the same place. Chances are that bank deposits and fixed income investment will not just give us the returns we need to build the kind of lumpsum funds we will need for retirement. So what do we need to do?

*Start early: The earlier we start, the more you can build up a nest.

*Invest in growth assets: Well-managed equity funds are the ideal way to beat inflation and build a substantial lumpsum.

To sum up, start saving for retirement now -- it is never too early or too late. And invest in well-managed growth and balanced funds.

(Source: Views of Mr Vivek Reddy, CEO, Kothari Pioneer AMC, as expressed in the latest performance report of Kothari Pioneer Mutual Fund.)


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