Q1. I’m Ayesha, and I’m interested in diversifying my portfolio by investing in international markets. What should be my strategy? What are the potential risks? How do I manage geopolitical and currency factors?
It is a healthy diversification move to invest in international markets, Ayesha! However, you must first assess your risk profile and be clear about your long-term investment goals. You will also need to decide what percentage of your portfolio you wish to commit to foreign investments. Once you are set, please keep in mind the following factors:
Select the right products: Choose products that align with your investment objectives. Look for funds that invest in countries or sectors that you believe have growth potential. Conduct thorough research on the markets and companies that your target fund invests in. Perform due diligence on the fund manager‘s track record and the fund’s historical performance—rolling returns, risk ratios, etc.
Diversification: Instead of concentrating your investments in a single region or country, diversify across countries and sectors to reduce risk. Pick funds that provide exposure to a broad range of international markets.
Expenses: Compare the expense ratios and fees of different funds. Lower expenses can have a significant positive impact on your long-term returns. Choose funds that charge reasonable fees.
Monitor Regularly: Review your portfolio to ensure it remains aligned with your investment objectives.
Q2. I’m Ankit. My wife and I both have children from previous marriages. We want to ensure that our estate planning is fair to all children and consider their needs fairly. How do we ensure this?
Ankit, it is appreciable that you and your wife are keen on a fair WILL. As you must know, creating a WILL for a blended family will need you both to address several complex factors.
- Please be very open about the assets each of you possesses. Transparently work out the share that will go to the spouse, the biological child, the stepchild, the respective parents, and other beneficiaries.
- Be clear about who will be the guardian for each child in the event of the death of one or both parents. Who will hold the assets in custody for the child?
- Get competent legal help to draft the WILL to ensure the intent of the testator is clear and the Will complies with the law of the land.
- Appoint an executor who is fully familiar with your intentions and the relationships within the family.
- Explore other estate planning tools like trusts or life insurance policies that will help fair distribution of the assets among the children.
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Updated: 26 Oct 2023, 01:21 PM IST