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Post my goal of achieving 1 CR, I would continue invest in other funds (non index) with my current salary savings. The intent of SWP was to withdraw only that much money (31K) monthly without any impact due to tax and at the same time allow that money to grow with the index.

My question though remains unanswered. My main worry is do we see the market crashing and not recovering to current levels for about 2-3 decades (which happened with Japan in 1990 and China in 2007). In that case parking the money in a SWP is very very risky.

I have lot of questions on your plan.

- Are you withdrawing 31k per month from the index fund for tax harvesting? i.e. use the 1.25Lakhs Cap gains exemption? What do you plan to do with the withdrawn money? Reinvest in same fund? In another fund? Spend? As long as you have a plan for the above questions, you do whatever works.

- About Indian market having a prolonged period of non performance question - SWP has nothing to do with it. If the market is down - it is down. That is a risk you have to take before investing in equity. If not stick to debt or real estate or gold. But each have their own risks and rewards.
Other option is to invest in multiple countries (say US market and Indian market) to reduce and spread out the risk.

But again, I am not clear - how you can avoid this risk by avoiding SWP. You avoid the risk - by avoiding equity altogether. SWP is only a method of withdrawal.

Yes I would be withdrawing with tax harvesting purpose.

Forget about SWP. I don't intend use the withdrawals for my daily survival. Me and wife would save about 3L after taxes and monthly expenses through our salary. Better question would be, Is it wise enough to park that high sum of money in a index fund and just withdraw as and when necessary/or when market is bullish? Or is it too high a risk, because if the crash happens just after I invest, and it doesn't recover for 2-3 decades, I might as well have invested that elsewhere, be it Gold, Real Estate etc. Do you or any of the other experts believe India is at the apex of stock indexes currently and we may enter a massive decline in the next decade?

If you set up SWP you will be redeeming funds regardless of whether you need it or not, paying tax unnecessarily. So, I do it manually - If for a couple of months I don't need cash, I wouldn't redeem at all. I will then have more cash in the kitty to grow.

Short answer: Yes, you may loose your entire capital any day.

Long answer: No one can see it that far. It's unpredictable. Don't believe anyone giving predictions. Expect a fair return of 12% (the average since 1990) and be content with it. You are investing in the market and this (the fact that you can't predict what might happen) is the inherent risk you pay for the returns from the market.

Yes that's what I intend to do, as quoted in my original post. Even in SIP, I am manually investing the amount every month rather than doing it automated on a fix date.

Makes sense. Thanks for the input.

If you build your investment kitty systematically over a period of 10 years or more (the longer, the better), it will create a "cushion" strong enough to absorb day-to-day market shocks. Such a disciplined approach ensures that your portfolio remains resilient and is likely to stay in the "green" even during severe market downturns, such as a 50% market fall in a single day.

It’s best to avoid large lump-sum investments in equity. While occasional investments of smaller amounts, such as ₹1 lakh, are fine if you are already continuing your SIPs, parking a substantial sum (several lakhs) in one go is risky. Even relatively minor market shocks can lead to significant losses when investing in this manner.

Focus on systematic and disciplined investing over a long-term horizon of 10 years or more. You significantly improve your chances of weathering market volatility and achieving stable, long-term growth.

I don’t believe in either SIP or SWP. What I do is keep liquidity available, when markets are down, I buy NAV’s accordingly. And would remove some when markets are up.

But if you are stuck with SIP/SWP, you will be investing/removing as per the exact date, irrespective of market being up or down on that specific date. In the long run you might end up on the losing side with this strategy.

So if markets are down, I will buy may be 3/4 times in a month and if they are up, I will go without buying for months.

So far this strategy works for me and I continue doing this.

+1. This is actually a best practice to invest manually at every dips in the market. But the personal discipline and mental bias can turn this systematic investment into a unsystematic.

Once, one buys a MF manually at NAV X (on market dip), then in the same month (or week) it creates a mental hinderance to buy the same MF at X.0x Nav. To avoid this one can either choose weekly SIP or fortnight one, this will average out the risks (& return) to some extent. Timing the market is futile exercise.

Great. Decide what you will do with the withdrawal.

What I or anyone else believes has no bearing in this conversation. You should have an asset allocation. And act according to your risk profile.

My Asset allocation: 40% equity, 30% debt, 30% realestate.

So, if equity tanks - you dont lose all your net worth. But I intend to keep increasing my equity portion to about 60% and reduce the others proportionately.

What is the thought process behind this? Ideally, one must decrease the equity allocation and increase in debt or low risk instruments with age.

My target goal is to have 60% equity until I am about 60 years old. I am yet to reach that though. Infact it has taken me about 10 years to go from about 18% equity to 40% equity.

This would be the case for most folks, when they are new to equity world, especially for first generation equity investors. But my son when he starts his own financial journey will probably have a different story.

I would like to add to what @Dry Ice and @Smartcat have already covered.

I'm not sure if you are planning to transfer AUD to India and then invest in Mutual Funds or have an income stream in India in INR that you plan to invest. If it is the former, then I would recommend talking to a good Financial Planner here in Australia to see if you have taken full advantage of all the benefits here that will help to meet your immediate and long-term financial goals.

Example: For long-term/retirement focused investments, have you fully utilized your "Carry forward unused contribution cap amounts" for the previous five years to max out your concessional Superannuation contributions? Have you reviewed your Superannuation investment portfolio and fees? Many funds have the option to choose low cost Index funds. Some of them even offer index funds with hedging for Forex. Basically you can get exposure to overseas markets through your Super without too much effort. However, you can't really access the funds before you are 60, except for exceptional reasons.

My understanding is that, in 2024 one cannot ignore emerging markets like India, China and South Korea and should consider them as part of their equity portfolio. How much and how to execute it is a different topic and you should seek professional advice that meets your personal circumstances. Good luck. :thumbs up

P.S: I'm not an expert. If you are really keen to understand more about investing/wealth building from an Australian perspective, then I would recommend reading/listening to the following,

• Financial Review (Wealth section). If it's behind a paywall, do the following. Copy the title of the article you want to read, paste it in google, click the first AFR link that google provides, and you can read it for free.
• Podcasts: The FIN, Chanticleer, Fear & Greed, Australian Financial Podcast
• Books: The Barefoot Investor. The Ulysses Contract: How to never worry about the share market again.

I am confused. Generally, we lower the equity percentage with age. That's the best practice. Aren't you increasing your risk appetite with age? There is nothing wrong and right in assets allocation, one can do 100% equity life long and still earn well.

Let me explain. My target equity exposure is 60%. I started with equity in 2014 and until then had all my eggs in debt (FDs, PF, etc). As my understanding improved of equities, MF, etc, I have been moving more of my networth to equity. But even today, I am still at 40% equity, 30% debt, 30% realestate.

But I am at a point where, I will not add any more to real estate. I will not add any more voluntary to debt, apart from the mandatory/statutory ones (PF, NPS, etc). No more FDs or VPF.

So, all my new voluntary investments will be in equity (Indian and US markets). With this plan, I expect to reach about 60% networth in equity by the time I turn 60. I will then continue to hold equity-debt-realestate in the same proportion.

Note: I am not including, any expected inheritance in my networth. That will absolutely skew the numbers in favor of real estate.

Please check your assumptions again :). INR has appreciated 3.05% and 2.46% in the last 1 and 2 years respectively against the Australian Dollar. INR has also appreciated against EUR(1.56%) and JPY(5.92%) in the last 1 year.

In fact, since the time Trump got re-elected and USD surged against all currencies, INR has done better than other currencies. INR has appreciated 1.20% against AUD in the last month.