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Ramalingam

Ramalingam Kalirajan  |7100 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 28, 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
Stats Question by Stats on May 28, 2024Hindi
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Hi, I am 22 years old doing SIP of Rs. 16,000 in following funds :- 1. Quant Flexi Cap Fund:- Rs. 4000 2. Parag Parikh Flexi Cap:- Rs. 3000 3. Nippon India Large Cap Fund:- 2000 4. HDFC Balanced Advantage Fund:- 2000 5. Quant Mid Cap Fund:- 1500 6. Motilal Oswal Mid Cap Fund:- 1500 7. Bandhan Small Cap Fund:- 1000 8. Axis Small Cap Fund:- 1000 Please do a review my portfolio as well as these selected funds. Also please give your suggestions. Thank you!

Ans: Your dedication to investing at such a young age is impressive and sets a strong foundation for your financial future. Let’s review your current portfolio and provide suggestions for optimization.

Portfolio Review
Diversification Across Funds
You have diversified across various categories, including flexi cap, large cap, balanced advantage, mid cap, and small cap funds. Diversification helps in spreading risk and capturing growth from different market segments.

Fund Categories and Allocation
Flexi Cap Funds: These funds offer flexibility to invest across market capitalizations. They balance risk and reward effectively.

Large Cap Funds: Large cap funds are stable and less volatile, providing consistent returns over time.

Balanced Advantage Funds: These funds dynamically manage equity and debt, offering a balanced approach to growth and stability.

Mid Cap Funds: Mid cap funds are riskier but can deliver higher returns than large cap funds. They offer growth potential.

Small Cap Funds: Small cap funds are the most volatile but can provide significant growth over the long term.

Recommendations for Portfolio Optimization
Assessing Risk and Returns
Your portfolio is well-diversified but leans towards higher risk with significant exposure to mid and small cap funds. At your age, a higher risk tolerance is understandable, but it’s crucial to maintain a balance.

Adjusting Fund Allocation
Increase Allocation to Large Cap and Balanced Advantage Funds: These funds provide stability and consistent returns. Increasing your investment in these funds can balance the risk from mid and small cap funds.

Review Flexi Cap Funds Allocation: You have a substantial allocation to flexi cap funds. Ensure these funds are performing well and meeting your investment goals.

Monitor Mid and Small Cap Funds: Keep an eye on the performance of mid and small cap funds. Consider reducing exposure if they are too volatile for your risk tolerance.

Regular vs. Direct Funds
Investing through regular funds with the help of a Certified Financial Planner ensures you receive expert guidance. This helps in making informed decisions and optimizing your investment strategy.

Long-Term Investment Strategy
Goals and Time Horizon
Identify your financial goals and time horizon. Long-term goals like retirement or buying a house can tolerate higher risks. Short-term goals require safer investments.

Systematic Investment Plan (SIP)
Continue with your SIPs to benefit from rupee cost averaging. This reduces the impact of market volatility and helps in disciplined investing.

Emergency Fund
Ensure you have an emergency fund covering 6-12 months of expenses. This provides financial security in case of unforeseen events.

Health and Life Insurance
Consider getting adequate health and life insurance coverage. This protects your investments and provides financial security to your family.

Conclusion
Your proactive approach to investing is excellent. By adjusting your fund allocation and maintaining a balanced risk profile, you can achieve your financial goals more effectively. Regular reviews and guidance from a Certified Financial Planner will ensure your investments stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
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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Hi, I am 22 years old doing SIP of Rs. 16,000 per month in these following funds:- 1. Parag Parikh Flexi Cap Fund :- 4500 2. Quant Flexi Cap Fund :- 4500 3. Nippon India Large Cap Fund:- 2000 4. Motilal Oswal Mid Cap Fund:- 1500 5. Quant Mid Cap Fund:- 1500 6. Axis Small Cap Fund:- 1000 7. Bandhan Small Cap Fund:- 1000 Please do a review of my portfolio and give your suggestions. Thank you!
Ans: You have a well-diversified SIP portfolio. Investing Rs. 16,000 monthly at 22 is a commendable step. This shows your commitment to building wealth over time. Let’s review your portfolio and provide suggestions for improvement.

Current Portfolio Analysis
Your current SIP investments include:

Parag Parikh Flexi Cap Fund: Rs. 4,500

Quant Flexi Cap Fund: Rs. 4,500

Nippon India Large Cap Fund: Rs. 2,000

Motilal Oswal Mid Cap Fund: Rs. 1,500

Quant Mid Cap Fund: Rs. 1,500

Axis Small Cap Fund: Rs. 1,000

Bandhan Small Cap Fund: Rs. 1,000

Diversification and Allocation
Flexi Cap Funds
Parag Parikh Flexi Cap Fund and Quant Flexi Cap Fund:

Advantages: Flexi cap funds invest across all market capitalizations. They provide flexibility to capture growth opportunities.

Risk and Return: These funds balance risk and return by diversifying investments across large, mid, and small cap stocks.

Evaluation:

Sufficient Exposure: Investing in two flexi cap funds provides adequate exposure to diverse market segments.

Potential Overlap: Check for overlapping stocks to ensure true diversification.

Large Cap Fund
Nippon India Large Cap Fund:

Advantages: Large cap funds invest in established companies. They offer stability and lower volatility compared to mid and small cap funds.

Risk and Return: Lower risk with moderate returns. Suitable for long-term stability in the portfolio.

Evaluation:

Stability Factor: Including a large cap fund adds stability to your portfolio.

Maintain Allocation: Continue with your current allocation to ensure balance.

Mid Cap Funds
Motilal Oswal Mid Cap Fund and Quant Mid Cap Fund:

Advantages: Mid cap funds invest in growing companies. They have the potential for higher returns than large caps but with higher risk.

Risk and Return: Higher volatility with the potential for significant returns.

Evaluation:

Growth Potential: Two mid cap funds provide a good balance of growth potential.

Diversification: Ensure there is minimal overlap between the funds to maximize diversification.

Small Cap Funds
Axis Small Cap Fund and Bandhan Small Cap Fund:

Advantages: Small cap funds invest in emerging companies. They offer high growth potential but come with higher risk.

Risk and Return: High volatility with the possibility of substantial returns.

Evaluation:

Aggressive Growth: Small cap funds are suitable for aggressive growth in your portfolio.

Monitor Performance: Regularly monitor these funds due to their high volatility.

Recommendations for Improvement
Review Fund Overlaps
Diversification Check: Ensure there is minimal overlap among stocks in your flexi cap, mid cap, and small cap funds.

Balanced Exposure: Aim for a balanced exposure to different sectors and industries.

Rebalance Portfolio
Current Allocation: Your portfolio is skewed towards flexi cap funds.

Suggested Allocation: Consider increasing the allocation to large cap funds for stability. This ensures a balanced risk-return profile.

Long-Term Strategy
Stay Invested: Continue your SIPs for the long term to benefit from rupee cost averaging and compounding.

Periodic Review: Review your portfolio periodically to ensure it aligns with your financial goals.

Additional Suggestions
Emergency Fund
Liquidity: Maintain an emergency fund equivalent to 6-12 months of your expenses. This ensures liquidity for unforeseen circumstances.
Health and Term Insurance
Health Insurance: Ensure you have adequate health insurance coverage. This protects you against medical emergencies.

Term Insurance: Consider term insurance for financial security of your dependents in case of an untimely demise.

Education and Learning
Continuous Learning: Keep learning about personal finance and investments. This helps you make informed decisions.

Seek Advice: Consider consulting a Certified Financial Planner (CFP) for personalized advice tailored to your financial goals.

Conclusion
Your current SIP portfolio is well-diversified and on the right track. A balanced approach with adjustments can further optimize it. Investing in mutual funds through SIPs is a commendable strategy for wealth creation. Regularly review and rebalance your portfolio. This ensures it aligns with your financial goals and risk tolerance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Radheshyam

Radheshyam Zanwar  |1056 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Nov 22, 2024

Asked by Anonymous - Nov 22, 2024Hindi
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My son secured CRL below 800 in Jee advance 2024 but did not take admission in IIT rather took admission in a third grade college and currently pursuing Btech CSE. I am worried about his future. Can he get success in future?
Ans: Hello.
You did not mention which IIT college and course your son was getting. You also did not mention which college he has been admitted to. It seems that there is a wide communication gap between you and your son. Surprisingly, a candidate getting admission to IIT rejected it and went to a 3rd-grade college (as per your opinion). You are also not clear about, what was role when your son was denied to take admission to IIT and chose a 3rd-grade engineering college. There are lots of possibilities that your son has been denied IIT college which can't be discussed on this public platform.
It seems that your son is a talented, hard worker which is already reflected in his JEE result, there is no need to worry about his future. These types of candidates are less dependent on the college and faculty. They have their inbuilt capability to learn and excel in the life. There is no need to worry much about the decision taken by your son. Just observe that, whether he is attending college regularly and engaged in extracurricular activities. If he scores well in CSE, a bright future is waiting for him. Remember, a job career is less dependent on the college name! Nowadays, show your extraordinary skills and get the job!

If satisfied, please like and follow me.
If dissatisfied with the reply, please ask again without hesitation.
Thanks.

Radheshyam

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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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