How much exposure should you take to gold and mid- and small-cap funds?

I have read that gold will deliver over 15 per cent return in the next six months. On the higher side, how much exposure should I take to gold? If I wish to take tactical exposure with limited money, are exchange-traded (ETFs) funds a good option?

Whenever there is fear and uncertainty around the world, people turn to gold. I don't think that you should go beyond 10 per cent of your total net worth into gold and please do not have any definite expectations of returns. Gold seems to follow collective emotions: It could go up for a long time, and it may remain flat for many years. We have seen both in the past. ETFs are ideal. 

Mid- and small-caps have seen a deep correction. Does it make sense to increase exposure to mid- and small-caps fund now? I am 33, and my equity portfolio consists of 60 per cent large and multi-cap funds. The rest is in mid-cap and small-cap funds.

Do take advantage of this deep correction. There is much money to be made out of mid- and small-cap funds. And, that's the right way, because professionals managing these funds will be more vigilant than us. Don't give in to the greed of taking direct exposure into such stocks on your own. I would suggest that you look at some sectoral exposures too.

My spouse doesn't control his spending. I am a saver, and he's a spender. We have had fights about it. We are a working couple. How do I make him control his spends?

Not spending is compromising. No one would want to compromise unnecessarily. But being a spendthrift and sacrificing the future for current and frivolous satisfaction should be plugged. Set up direct debits on his account. The moment the salary or earning comes in, get it debited towards a systematic withdrawal plan (SIP) or insurance premiums immediately, or move a chunk to another account from which you can control household expenses. Let him also have a fair amount in his account so that he is not left feeling deprived. You could also divide responsibilities for expenses and investments in the same ratio as your incomes.

My fixed deposit is going mature next month. Please suggest the best instrument where I can lock this money for 8.5-9 per cent monthly returns for the long term.

Have you considered perpetual bonds and corporate bonds? These will give you higher returns than fixed deposits, however, the capital value fluctuates between 2-5 per cent or more and sometimes adversely. But you need not worry because you are simply going to hold till the next milestone/maturity date which would easily be five to seven years or more. These bonds will require you to have a demat account. Also, you may not get monthly payouts; however, you will get half-yearly or annual payouts.

My wedding has been fixed. I earn Rs 14 lakh a month and have Rs  5 lakh savings as of now. I will have to go for a loan to fund my wedding. I just wanted to know is there some way I can decide on a budget for my wedding based on my current circumstances?

Wedding is one area that I do not comment on, even while I am planning cash flows for families I work with. It is an extremely emotional and a family decision, also based on your society, background, social obligation, status, ego, etc. Be sensible is all I can say. Why would you want to borrow to feed people in a four or five-star hotel? That said, if you need to borrow, then borrow, but see if you can repay your debt within a year or so. That could be a yardstick to go by.

The writer is director, Transcend Consulting. The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in