India versus global: A balanced approach for NRI investors

livemint.com:

Subscribe to enjoy similar stories. MUMBAI : Rohan, a successful non-resident Indian (NRI) tech professional, believed he was taking the right steps toward financial growth by diversifying his investments. Over time, his portfolio expanded to include a rental property in India bought at peak prices, global ETFs (exchange-traded funds) acquired during a bull run, and high-risk debt instruments.

His Indian portfolio was equally scattered, featuring 25-30 mutual fund schemes and random stocks chosen based on tips from friends and online forums. Despite his proactive approach, Rohan’s investments lacked direction and alignment with his financial goals. His story highlights a common challenge faced by NRIs: balancing investments between India and global markets effectively.

When we analyzed Rohan’s portfolio, it became evident that his strategy was reactive rather than goal-oriented. He was overexposed to high-risk assets, underinsured, and lacked contingency planning. More importantly, his investments didn’t align with his aspirations, such as funding his children’s education abroad, creating a retirement corpus, or establishing an emergency fund.

This imbalance was compounded by uncertainty about where his children might study or where he might retire, making it difficult to decide how much to allocate between Indian and global investments. Additionally, concerns about the rupee’s depreciation (approximately 3% annually in recent years) further complicated his decision-making process. Rohan’s experience reflects a broader trend among NRIs.