Single man, 41, seeks investment advice: How to start with SIPs in mutual funds?

Ans: Large cap fund: HDFC Top 100 – Growth plan OR SBI Blue chip fund  - Growth

Flexi Cap Growth option: Parag Parikh Flexi Cap Fund- Growth OR Samco Flexi Cap Fund – Growth

Ans: Hi Jitendra. Considering your existing concerns and multiple requirements, I would recommend investing 50 lakh using STP mode instead of lump sum.

If you invest 10-20k as a monthly sip after your monthly expenses, in 10 years you will have a corpus of 26-50 lakh with a CAGR of 14%. To achieve your financial goals, you can also invest (SIP & lump sum) in the schemes below.

• Nippon India Large Cap Fund
• ICICI Pru Value Discovery Fund
• Canara Robeco Flexi cap Fund
• Quant Absolute Fund
• HDFC Balanced Advantage Fund

Ans: Firstly i would suggest you to earmark a particular amount every month from your salary for MF SIP.
Then make a basket of funds such as emergency funds, short term , mid term and long term funds.
The break up can be 5L - 10L in emergency funds kept aside and post that the % can be 20% in small caps , 20% in mid caps, 20% in multi caps, 10% in thematic funds, 20% in large caps and 10% can be optional. Email me for a lenghty discussion on this topic

Ans: Yes, Investing in mutual funds through a SIP mode is a good way to start building wealth over the long term. Here's a step-by-step guide on how to invest in mutual funds SIP:

1. Identify Financial Goals: Before investing, determine your financial goals and the time horizon for each goal. This will help you choose the right mutual funds that align with your objectives.

2. Determine Risk Tolerance: Since you mentioned you are looking for moderate to high-risk returns, it's important to assess your risk tolerance. Higher-risk funds have the potential for higher returns but also come with increased volatility.

3. Selection of Mutual Funds: Based on your risk profile and financial goals, select mutual funds that match your investment criteria. The selection should be based on risk and reward factor of the particular mutual fund or you can consult with financial advisor if you feel unsure about making investment decisions.

4. Investment Platform: There are various platforms available on which you can start your investments after completion of KYC. You'll need to provide identity proof, address proof, and other relevant documents as per the guidelines of the platform. This is a one-time process and ensures regulatory compliance. Then, you can start your investments in the selected mutual funds.

5. Monitor and Review: Regularly review the performance of your mutual funds to ensure they are meeting your expectations. However, avoid making impulsive decisions based on short-term fluctuations in the market. Stay focused on your long-term investment objectives.

Remember, investing in mutual funds carries some degree of risk. It's important to understand the risks and potential returns associated with each fund before investing. Also, consider diversifying your investments across multiple funds to mitigate risk.

Disclaimer:
• I have just no idea about your age, future financial goals, your risk profile, other investments and whether you would have the nerves to not get unduly perturbed if stock markets go temporarily down.
• Hence, please note that I am answering your question in absolute isolation to other parameters which should definitely be considered when answering a question of this type.
• I recommend you to also consult a good financial advisor who would look at your complete profile in totality before you act on this advice given by me.

Ans: It's fantastic that you're considering mutual fund investments for your financial future. Let's craft a strategy to invest your lump sum amount of ?10 lakhs and set up a SIP of ?20,000 per month.

Investing the Lump Sum Amount
Diversification
Diversifying your lump sum investment is crucial to manage risk and maximize returns. Consider allocating the amount across different types of mutual funds based on your risk tolerance and investment goals.

Asset Allocation
Allocate a portion of your lump sum to equity funds for long-term growth potential. Additionally, allocate a portion to debt funds for stability and capital preservation.

Fund Selection
Choose funds with a proven track record of consistent performance and aligned with your risk profile. Opt for a mix of large-cap, mid-cap, and multi-cap equity funds, along with quality debt funds.

Setting Up SIPs
Monthly Contribution
A SIP of ?20,000 per month is a significant commitment and can help you achieve your financial goals over time. Ensure that the SIP amount is comfortably affordable and does not strain your monthly budget.

Fund Selection
Select SIPs in mutual funds that complement your lump sum investments. Maintain a diversified portfolio with exposure to various sectors and market caps to spread risk.

Consistent Investing
Commit to regular and disciplined investing through SIPs, regardless of market conditions. Stay invested for the long term to benefit from the power of compounding and rupee-cost averaging.

Monitoring and Review
Regular Assessment
Monitor the performance of your mutual fund investments periodically. Review your portfolio at least once a year and make adjustments if required based on changes in market dynamics or personal financial goals.

Rebalancing
Consider rebalancing your portfolio if the asset allocation deviates significantly from your target allocation. Realign your investments to maintain the desired risk-return profile.

Conclusion
By investing ?10 lakhs lump sum and setting up a SIP of ?20,000 per month in mutual funds, you're taking proactive steps towards building wealth for your future. Stay committed to your investment plan, and consult with a financial advisor if needed to ensure your investments are in line with your financial goals.

If you need further assistance or have any questions along the way, feel free to reach out. I'm here to help you navigate your investment journey and achieve financial success.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in