Stay invested, avoid timing the market: Deepak Shenoy

livemint.com:

Edited excerpts from the interview: Currently, my investment portfolio is primarily focused on equity and debt instruments. I don’t hold any gold or real estate investments at the moment. Approximately 75% of my portfolio is allocated to equity, while the remaining 25% is diversified in arbitrage funds.

Within this allocation, there’s a small portion of around 2% allocated to opportunistic debt, such as direct government bonds or GILT mutual funds.. However, I’ve been cautious with debt investments due to changes in taxation laws, particularly since the removal of indexation benefits. While my equity exposure used to be higher, I’ve adjusted it to 75% due to upcoming liquidity needs related to my son’s college expenses.

Going forward, I plan to increase my international exposure through a portfolio management service (PMS), which will allow Indian investors like myself to access overseas markets. As of now, approximately 97% is invested in Indian markets. The remaining 3% is allocated to international markets through Indian mutual funds.

However, direct investment in the US poses challenges due to tax implications. For instance, upon an individual’s demise, assets exceeding $60,000 are subject to a hefty 40% tax before being transferred to heirs. This taxation applies to both non-resident Indians (NRIs) and Indian residents.

Similarly, US residents and green card holders face a similar tax on assets exceeding about $4 million. To address this issue and expand international investment opportunities, we’re awaiting the introduction of new financial products. In fact, we’re in the process of launching a PMS that will enable us to invest in the US without being subjected to heavy tax implications.