About Michael A. Weiss, CFA Expertise I can provide high quality answers to questions about mutual funds domiciled in the United States. Overall, I have 15 years of investment experience. I am currently the Editor of <a href="http://www.mutualfundinvestor.net/">The Mutual Fund Investor</a>, a quarterly publication that provides recommendations and commentary on various no-load mutual funds. I am also currently the Chief Investment Officer of a state registered investment advisory firm that specializes in no-load mutual funds.
Experience Overall, I have 15 years of investment experience. I am currently the Editor of The Mutual Fund Investor, a quarterly publication that provides recommendations and commentary on various no-load mutual funds. To learn more about The Mutual Fund Investor, please visit <a href="http://www.mutualfundinvestor.net/">http://www.mutualfundinvestor.net/</a>. I am also currently the Chief Investment Officer of a state registered investment advisory firm that specializes in no-load mutual funds.My mutual fund experience began at a company called Lipper Analytical Services, where I researched and wrote about mutual funds. Lipper is one of the premier mutual fund research and ratings organizations. After Lipper, I worked as an investment analyst for Merrill Lynch’s multi-billion dollar Mutual Fund Advisor and Selects Programs. I also have experience working with individual stocks and bonds. I have managed investment portfolios for both Merrill Lynch Investment Managers as well as Evergreen Investments.<BR><BR><B>Organizations</B><BR>CFA Institute
CFA Society of Philadelphia
<BR><BR><B>Publications</B><BR>The Mutual Fund Investor
<BR><BR><B>Education/Credentials</B><BR>CFA charterholder
MBA in Finance and Investments from the Zicklin School of Business at Baruch College<BR>
Expert: Michael A. Weiss, CFA Date: 7/6/2007 Subject: Investing
Question I live in India...my grandfather who is octogenarian gets a handsome pension each month.However,all his money is invested in bank Fixed Deposits,or National Saving Certificates.
I want to know what kind of a portfolio should he have,in order to maximize his returns?Are Mutual Funds a feasible option?He doesn't have too much appetite for risk.
Thank you.
Answer Hi A. Verma,
Thank you very much for your question. I think its great that you are concerned about your grandfather’s welfare and congratulations to him for being an octogenarian. Please understand that the information that I provide can only be general in nature, as I do not have all of the details regarding your grandfather’s investment objectives, investable assets, preferences or others factors necessary to provide personalized advice.
On the surface, someone your grandfather’s age would be most suited to fairly conservative investments, whether they be in individual securities or mutual funds. Your grandfather could get higher returns by simply investing in a few high quality conservative fixed-income mutual funds offered by top tier companies. While fixed income mutual funds do not have the same risk profile as fixed deposits, the additional risk is rather low. Fixed-income funds can also provide excellent diversification.
In order to maximize or get a substantially higher return for your grandfather, he would need to introduce equity investments to his mix of assets. If he agreed to invest in equities, then a small allocation to conservative equity mutual funds would be a very good option, also due to the diversification benefits and the higher return potential. He should also make sure that he is comfortable with the risk associated with equities prior to adding even a small allocation.
I do not know your grandfather’s investment objectives. Sometimes people have enough money to live on and invest their own portfolios for their children. In this case, he could take a little more risk so as to not erode the principal of the portfolio.
Whatever your grandfather decides should be consistent with his investment objectives, preferences and other financial circumstances. It is important to note that a person’s risk tolerance is the most factor to consider when constructing an investment portfolio. This is something that I have learned from business school, the CFA program and from managing investment portfolios for individuals.
Please feel free to follow up with any additional questions you may have.
