What should be debt to equity ratio for mutual funds?

The ratio between debt and equity depends on your age. So, if you are 40 years old, 40 per cent of your portfolio should be in debt. You should also consider your short and long term financial goals before investing. It will further help you to identify ideal investments to achieve those goals.

What is a good portfolio allocation?

For example, if you’re 30, you should keep 70\% of your portfolio in stocks. If you’re 70, you should keep 30\% of your portfolio in stocks. However, with Americans living longer and longer, many financial planners are now recommending that the rule should be closer to 110 or 120 minus your age.

How much of your savings should be in equity?

The remaining 20\% of your income must be saved to build an emergency corpus which is at least thrice your monthly salary. Once that is done, you can start investing. Therefore, your investments in mutual funds should be 20\% of your monthly salary.

What is a good debt to asset ratio for an individual?

Generally, though, a ratio of 40 percent or lower is considered ideal, while a ratio of 60 percent or higher is considered poor. You may notice a struggle to meet obligations as your debt ratio gets closer to 60 percent.

Is a debt-to-equity ratio below 1 GOOD?

A ratio greater than 1 implies that the majority of the assets are funded through debt. A ratio less than 1 implies that the assets are financed mainly through equity. A lower debt to equity ratio means the company primarily relies on wholly-owned funds to leverage its finances.

What is a 60/40 portfolio?

The “60/40 portfolio” has long been revered as a trusty guidepost for a moderate risk investor—a 60\% allocation to equities with the intention of providing capital appreciation and a 40\% allocation to fixed income to potentially offer income and risk mitigation.

What is the average return on a 60/40 portfolio?

roughly 9.16\%
A historical winner Since 1987, an average global 60/40 portfolio has posted annualized returns of roughly 9.16\%. Despite ever-falling interest rates, the portfolio managed to produce a 9.76\% compound annual return with an 8.45\% standard deviation.

What percentage of my money should I invest?

Experts generally recommend setting aside at least 10\% to 20\% of your after-tax income for investing in stocks, bonds and other assets (but note that there are different “rules” during times of inflation, which we will discuss below). But your current financial situation and goals may dictate a different plan.

What makes ELSS different from other equity mutual fund schemes?

What makes ELSS different from other equity mutual fund schemes is that investment upto ₹1.5 lakh in ELSS is eligible for deduction from taxable income in a financial year. The scheme comes with a statutory lock-in period of 3 years for each SIP. It is the only mutual fund scheme that qualifies for tax deduction under Section 80 (C) of the IT Act.

What are the best ELSS funds to invest in 2020?

Best ELSS Funds to Invest in 2020 Fund Name Returns (\%) Returns (\%) Returns (\%) Returns (\%) Fund Name 1 year 3 year 5 year 10 year Axis Long Term Equity -0.44 6.29 8.82 14.02 Mirae Asset Tax Saver 10.12 7.52 — — Invesco India Tax Plan 5.82 5.83 8.76 11.21

What are the tax implications of switching between equity and debt funds?

Since, the switching between equity and debt happens in the fund, there is no tax incidence until you actually withdraw the money to use it.

How much ELSS investment is eligible for tax deduction?

As it has been mentioned above, investment upto ₹1.5 lakh in ELSS is eligible for deduction from taxable income in the financial year. We can understand ELSS taxation with the help of following example: