Choose growth over dividend

PORTFOLIO MAKEOVER

The good news first. You have sufficient funds to meet your goals and time on your side.  The bad news is that your investments are in extremely high risk instruments and your portfolio is in a mess. A high allocation to sector specific funds ought to be avoided. Currently 21.75 per cent of your portfolio is in the diversified power sector and 9.41 per cent in media and entertainment.  Secondly, more than 50 per cent of your mutual fund investments have the dividend option. These payouts amount to profit booking. Are these dividends re-invested or do they go towards consumption? We would strongly advise you to switch to the growth option.  In spite of your long term investment horizon, please steer clear of close-ended funds. These funds have a high exit load, so if the performance of the fund slackens, redeeming units becomes costly.  The wedding fund
Gold forms as much as 20 per cent of the total wedding expenses. We are not recommending that you start hoarding your bank locker with gold bars. The advent of Gold Exchange Traded Funds (ETFs) will bail you out of this problem. The units of these funds are backed by physical gold maintained with a registered custodian.  To finance the first wedding, you could look at routing your direct equity holdings towards a debt oriented equity fund. With the markets are at an all time high and no assurance as to the future direction, it would be wise to book profits. You could pick a certain number of stocks and begin selling 10-15 per cent of your holdings in these companies every month.  For your younger daughter, you can maintain investments in two large-cap oriented equity schemes for the next five odd years. After which you can institute a systematic withdrawal plan (SWP) and route these withdrawals to a capital guarantee instrument.  Of course, you will have to allocate more funds for your elder daughter