Vidyasagar is the sole bread winner to four dependants — septuagenarian parents, 35-year-old homemaker wife Sushmita and four-year-old son Mihir. Being a finance professional (he works as finance manager in an auto ancillary company), he understands the need for efficient risk management. Though he has medical insurance from his company, he has bought a personal cover as well, along with adequate home and contents insurance.

The five-member family is currently squeezed into a one bedroom-hall-kitchen flat. Vidyasagar wants to upgrade to a bigger house, which would cost him roughly Rs 25 lakh. He recently paid off the loan he took for his house and wants to sell it to raise money for the new house. While the proceeds from the sale of his house and his investments will go into the down payment, Vidyasagar is hopeful of getting another home loan. However, an EMI of over Rs 10,000 would hurt the finances of the family.

My advice is to wait a little longer till the family's finances can sustain the larger EMI. The other goal that needs a bit of rationalisation is the Rs 30 lakh goal for four-year-old Mihir's education. I want to do the best for my son, says the committed father. I would tone down the goal to Rs 5 lakh in terms of present value. Hike the sum put away for the son as income rises.

The usual suspect of too much cash in the portfolio plagues this family's finances as well. There's also very little equity in the portfolio. ‘‘I burnt my fingers in the Harshad Mehta time and have kept away from stocks. I do have some SIPs in funds and would like to expand on this,'' says Vidyasagar. Though he is keen to look at some debt funds, my advice is to focus on PF, PPF and other zero risk government products for his debt allocation.

Being a finance professional Vidyasagar is in position to know which way interest rates will move in the future. It would be a great time to enter a debt fund when interest rates go down.

For the equity part he needs to have a core and satellite approach. The core — about 50 per cent of the equity portfolio — should be in diversified equity funds that have a relatively lower risk. The rest should go in either sector specific (Vidyasagar likes pharma) or style specific schemes for higher growth. As always look for fund houses with a good track record and lower costs.

It's 12k. But what's amazing is the speed at which the market made it to this new milestone. It took just 16 trading sessions for the Sensex to reach the 12,000 mark. From 10k to 11k, the Sensex took 29 trading sessions.

What's even more amazing is that the Sensex bounced back swiftly from what seemed to be a certain corrective phase. Last week, the Sensex lost about 700 points and appeared like it would go below the 11,000 mark. But just as swiftly the market bounced back a whopping 800 points.

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