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Ramalingam

Ramalingam Kalirajan  |7953 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 04, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Vishal Question by Vishal on Dec 06, 2023Hindi
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I have 20 lakh Rs. to invest only in Equity for 10 Years. Kindly suggest the sectors which could see significant growth in next 10-12Y..If possible kindly suggest some stock from these sectors. I already have SIP of 60K per month diversified in large Mid and small cap.

Ans: Considering your long-term investment horizon of 10 years and the desire for substantial growth, I would recommend focusing on diversified equity funds rather than investing directly in sectoral stocks. Diversified equity funds offer exposure to a wide range of sectors and companies, helping to spread risk and maximize long-term returns.

Instead of trying to predict which specific sectors will outperform over the next decade, diversified equity funds provide a balanced approach by investing in a diversified portfolio of stocks across various sectors. These funds are managed by experienced fund managers who carefully select and rebalance the portfolio to capture opportunities while mitigating risks.

By investing in diversified equity funds, you can benefit from the growth potential of multiple sectors without the need to pick individual stocks. Additionally, these funds offer convenience, liquidity, and professional management, making them suitable for long-term investors seeking capital appreciation.

I would suggest considering reputable diversified equity funds with a track record of consistent performance and aligned with your risk tolerance and investment goals. It's essential to conduct thorough research or seek advice from a financial advisor to select funds that suit your requirements and align with your overall investment strategy.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Vivek

Vivek Shah  |60 Answers  |Ask -

Financial Planner - Answered on Feb 13, 2023

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Sir, i am an investor of about 10 year horizon. Which stocks can i invest.
Ans: First of all as an investor and also managing your family finances, you need to answer following questions before deciding on which instrument you want to invest

1) Goal or financial goal or purpose of doing investment.
This will matter a lot as a goal of child education and retirement needs to see with different perspective and also should have asset allocation and market cap exposure accordingly.

2) Time Horizon of your goals- this is very important as it will help you to select the asset class and it's allocation based on your time period of financial goals. This is where investor makes biggest mistake of misalignment of asset time cycle and goals time period. If you allign this properly, your journey will be quite smooth.

3) Optimum Return expectations on your capital invested-
If you are saving and investing for some better future to fulfill your goals offcourse you will ask something in return which should be respectable higher returns than inflation for long term period( more than 7 years). If you are investing in India than equity return assumptions and calculations should be based on 12% return expectations and debt it should be 6.5%. Remember that you should assume practical return assumptions ( not the highest or what your friend says) as you can put any number in the excel sheet for your mental satisfaction😃

4) Risk taken on your capital-
Risk is a very negative word being taken in india but actually it's the risk appetite and risk acceptance of an investor which makes his outcome/ returns favourable. Understand one thing that if you want high returns you have to assume high risk and there is no option for it or an investor has to be happy with sub optimal returns if he is not ready to take risk.

Risk according to me is the capacity of a person until where and when he will not have any palpation in his stomach and he can absorb the downside easily( both realised and majority of time unrealised).

After looking at all these parameters you can think of taking allocations to stocks or equity mutual funds and decide how much allocation to stocks or mutual funds is comfortable to you. If you dont have any prior expertise in investing in stocks, its better to hire an advisor to help you do that or start with allocation in Equity Diversified mutual funds which will help you to take exposure in stocks.

And after all that, i would say it's your behaviour and emotions management which will help you create wealth in the equity market.

I hope this helps. Happy investing

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |7953 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 13, 2025

Asked by Anonymous - Feb 13, 2025Hindi
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Why do Debt Funds offer lower returns as compared to Equity Mutual Funds?
Ans: Debt funds and equity mutual funds serve different purposes in an investor's portfolio. Debt funds offer stability and lower risk, while equity mutual funds focus on high growth with higher risk.

Below are the key reasons why debt funds provide lower returns than equity funds.

1. Nature of Underlying Investments
Debt funds invest in bonds, government securities, corporate debt, and fixed-income instruments.

These instruments provide fixed interest, leading to predictable but lower returns.

Equity mutual funds invest in company stocks, which have the potential for higher capital appreciation over time.

2. Risk-Return Tradeoff
Lower risk means lower return potential in debt funds.

Debt investments focus on preserving capital rather than aggressive growth.

Equities are volatile, but over the long term, they tend to generate higher returns.

3. Interest Rate Sensitivity
Debt fund returns depend on interest rate movements in the economy.

Rising interest rates reduce bond prices, lowering returns in debt funds.

Equity funds are less impacted by interest rate changes and benefit from economic growth.

4. Inflation-Adjusted Returns
Debt funds often fail to beat inflation in the long run.

Equity investments provide inflation-adjusted growth due to rising corporate earnings.

Holding equities for longer durations results in compounding benefits.

5. Growth Potential
Equities represent ownership in businesses that expand over time.

Business growth translates to higher share prices and higher returns.

Debt instruments provide fixed interest, which limits potential upside.

6. Tax Efficiency
Equity mutual funds enjoy lower long-term capital gains (LTCG) tax rates compared to debt funds.

Debt fund gains are taxed as per the investor’s income tax slab, reducing post-tax returns.

This tax treatment makes equities more attractive for long-term wealth creation.

7. Market Performance
During economic growth, companies generate higher profits, leading to higher equity returns.

Debt fund returns depend on interest rate cycles, making them less rewarding in growth periods.

Equities have historically outperformed debt over longer durations.

Finally
Debt funds provide safety and stability but offer lower returns.

Equity mutual funds outperform over time due to business expansion and compounding.

A well-balanced portfolio should include both debt and equity, based on financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment

...Read more

Harsh

Harsh Bharwani  |75 Answers  |Ask -

Entrepreneurship Expert - Answered on Feb 13, 2025

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Sir I am a Engineer by profession snd working in Qatar. Same time i had Cost accountant Degree and passed out way back at 2009. After that no touch with Cost Accounts. Now i am 48 yrs and after few yrs i want to move back to India. But that time if want open a cost accounting firm, what would be the best move i can do to open the consulting firm?
Ans: Hello Mr. Heman,
Reestablishing your career in cost accounting and setting up a consulting firm in India requires careful planning. Start by updating your knowledge through ICAI’s continuing education programs, industry seminars, and professional courses to stay current with evolving regulations and industry practices. Reactivating your ICAI membership and obtaining a Certificate of Practice (CoP) is essential to offer consulting services legally. While still in Qatar, gaining practical exposure by offering freelance or part-time cost auditing or GST advisory services to Indian firms will help establish credibility.

Next, choose a suitable business structure - Sole Proprietorship, LLP, or Private Limited Company - based on your growth plans and compliance preferences. Register your firm with the Ministry of Corporate Affairs and obtain the necessary licenses. Conduct thorough market research to identify your target clients, understand industry needs, and define your service offerings, such as cost audits, financial consulting, and management advisory. A well-structured business plan with clear financial projections will help ensure long-term sustainability.

Investing in technology and infrastructure is crucial. Setting up a professional office, adopting modern accounting software, and leveraging cloud-based financial solutions will enhance efficiency. Building a strong professional network is equally important - reconnect with former colleagues, join industry associations, attend networking events, and establish a digital presence through a website and social media to attract clients.

Lastly, focus on compliance and quality assurance. Adhering to ICAI regulations, tax laws, and ethical standards is critical for maintaining credibility and trust. By systematically following these steps, you can successfully transition back into cost accounting and establish a reputable consulting firm in India, ensuring a stable and rewarding career.

...Read more

Milind

Milind Vadjikar  |1013 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Feb 13, 2025

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Can I change my plan from star FOH to Star Assure. In plan migration form What I write in PED column. my policy number was taken on 19 February 2021, in the first week of March 2021 suddenly my blood pressure increased, due to which the doctor asked me to undergo angiography. After that the doctor asked to do angioplasty immediately and thus on 18 March 2021 I got angioplasty done. Now I am completely healthy, since my illness occurred within 31 days of taking the policy, company agent told me that there is no provision to cover any health related problem within 31 days. Company agent told me that there is no provision to declare any illness midway. Now I am completely healthy. Company not include my above mentioned health condition in my policy. And compny given me reply "Dear Mr. Jain, We acknowledge the receipt of your mail. With reference to our previous telcon, this is to inform that any disease or ailment/illness if found after inception of policy. It is not required to disclose under policy. But if you still wish to disclose the disease then kindly find the attached PED inclusion form, fill and submit us for further evaluation. Note : To note the disease in the policy PED form is mandatory. We request you to provide the Medical reports/ Discharge summary /any relevant /First consultation paper / medical document of the said procedure/diagnosis, which shall be kept for our reference. " What can I do.
Ans: Hello;

Regarding plan migration feasibility you may check with your insurer/insurance agent.

If you want to inform the insurer about your later acquired illness you may furnish the details to them as per their requirement and check their feedback on the same.

Their feedback will decide your next course of action.

Best wishes;

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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