Many people close to retirement and some people in retirement are calling up – and their portfolios suck! Portfolios have the classic mistake of either being too aggressive or being too defensive with a lot of long term debt.
In most cases I find a slew of mutual funds – opportunities funds, foreign investments, small cap fund – the full range of funds. When many of these IPOs hit the market, I used to wonder who would invest in these schemes, now I know!
In almost all mutual fund houses the flagship scheme has done far, far better than their esoteric offerrings. However thanks to the fund advisor most people have invested in 11- 15 funds. The benefits of portfolio diversification are almost NIL! Or there is too much concentration of securities because of a poor fund selection.
Most of them need a makeover. I believe all you need is a simple index fund, a term insurance, a savings bank account and a card that allows you to make electronic payment (debit or credit)….anything else is an excess!
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