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Ramalingam

Ramalingam Kalirajan  |8342 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 18, 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
Asked by Anonymous - Nov 16, 2023Hindi
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Hi sir, I am 24, Goal 1 cr in next 10 year MONTHLY total SIP @ 7000 ,( PPFS 2 , MOTILAL Oswal midcap1.5k , axis small cap2.5k, ICICI valu discovery1k) step up 30% per year Lump sum - 10000 NipponPower fund 10000 - HDFC REQUIREMENT FUND EQUITY. ( Step up 15-30% each half year as per performance PLS SUGGEST. Any deletion or addition.

Ans: Your investment strategy looks well-diversified with a mix of large-cap, mid-cap, and small-cap funds. To achieve your goal of 1 crore in 10 years, consider the following suggestions:

SIP Step-up: Increase SIP amounts annually by 10-15% instead of 30% to maintain consistency and reduce the risk of overcommitting.
Fund Selection:
Large Cap: Consider adding a large-cap fund for stability.
Diversified: Add a multicap or flexi-cap fund for broader market exposure.
Lump Sum Investments: Continue with lump sum investments based on performance, but avoid high-risk strategies. Ensure proper research before investing.
Review and Rebalance: Regularly review your portfolio and rebalance if required to align with your financial goals and risk tolerance.
Consider consulting with a Certified Financial Planner for personalized advice tailored to your financial goals and risk profile.
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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Ramalingam

Ramalingam Kalirajan  |8342 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 29, 2024

Asked by Anonymous - Jun 30, 2023Hindi
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Hello Sir, I am 43 yrs old and have 35k monthly SIP as below.. Kindly suggest if any changes needed. I am planning to increase it to 10% by next month. Asset Class/Scheme Name Category Risk Appetite Existing sip amount Mirae Asset Emerging Bluechip-Reg(G) Blend Very High 3000 Parag Parikh Flexi Cap Fund-Reg(G) Blend Very High 3000 ICICI Pru Value Discovery Fund(G) Value / Contra Very High 3000 Aditya Birla SL Floating Rate Fund(G) Floater Fund Low To Moderate 1500 DSP Global Innovation FoF-Reg(G) Global Very High 3000 HDFC Short Term Debt Fund(G) Short Duration Fund Moderate 2000 Kotak Balanced Advantage Fund-Reg(G) Hybrid Very High 2000 Kotak Small Cap Fund(G) Mid / Small Very High 3000 ICICI Pru Savings Fund(G) Low Duration Fund Moderate 1500 HDFC Flexi Cap Fund(G) Value / Contra Very High 3000 DSP Midcap Fund-Reg(G) Mid / Small Very High 3000 ICICI Pru Balanced Advantage Fund(G) Hybrid High 2000 Mirae Asset Equity Savings Fund-Reg(G) Hybrid Moderately High 2000 DSP Quant Fund-Reg(G) Quality Very High 3000
Ans: Optimizing Your Monthly SIP Portfolio for Long-Term Growth

Your proactive approach to investing through monthly SIPs reflects a commitment to building wealth and achieving your financial goals. Let's review your current portfolio and make informed recommendations for potential adjustments.

Assessing Your Existing SIP Portfolio

Your SIP portfolio comprises a diverse mix of asset classes and fund categories, catering to various risk appetites and investment objectives. Here's a brief overview:

Blend Funds: Mirae Asset Emerging Bluechip Fund and Parag Parikh Flexi Cap Fund offer exposure to both large and mid-cap segments, providing growth potential with a blend of stability.
Value/Contra Funds: ICICI Pru Value Discovery Fund and HDFC Flexi Cap Fund focus on identifying undervalued stocks, potentially offering attractive returns over the long term.
Floater Fund: Aditya Birla SL Floating Rate Fund provides stability and income generation through investments in floating-rate securities.
Global Fund: DSP Global Innovation FoF offers exposure to global innovation-driven companies, diversifying geographical risk and tapping into international growth opportunities.
Debt Funds: HDFC Short Term Debt Fund and ICICI Pru Savings Fund provide stability and income generation with moderate risk exposure.
Identifying Areas for Potential Adjustment

Risk Assessment: Given the high-risk nature of several funds in your portfolio, it's essential to ensure alignment with your risk tolerance and investment horizon. Reassess your risk appetite and consider rebalancing your portfolio accordingly.

Overlapping Holdings: Review your portfolio for any overlapping holdings or duplicate exposures across funds. Consolidating similar investments can streamline your portfolio and optimize diversification.

Performance Evaluation: Evaluate the historical performance of each fund relative to its benchmark and peer group. Identify underperforming funds and consider replacing them with alternatives that offer better prospects for growth.

Asset Allocation: Maintain a balanced asset allocation across equity, debt, and hybrid funds to manage risk effectively and achieve your long-term financial goals.

Recommendations for Adjustments

Increase SIP Amount: As you plan to increase your SIP allocation by 10%, consider allocating additional funds to well-performing funds with proven track records and growth potential.

Streamline Portfolio: Consider consolidating your portfolio by trimming or eliminating underperforming funds. Focus on retaining funds that align with your investment objectives and risk tolerance.

Explore New Opportunities: With the additional investment amount, consider exploring new funds or asset classes that complement your existing holdings and provide opportunities for diversification and growth.

Seeking Professional Guidance

As a Certified Financial Planner, I recommend conducting a comprehensive portfolio review to identify areas for optimization and align your investments with your financial goals. Professional guidance can help navigate market uncertainties and maximize your investment outcomes.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8342 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 23, 2024

Asked by Anonymous - Apr 23, 2024Hindi
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Sir, I am 35, following are my SIPs per month: I have just started investment 1. Canara Robeco ELSS Tax Saver- Rs. 1000/- 2. HDFC Large and Mid Cap Fund Regular Growth- Rs. 1000/- 3.HDFC Flexicap Fund Regular Plan Growth- 1000/- 4. HDFC Retirement Saving Fund- Regular Plan Growth-1000/- 5. HDFC Balanced Advantage Fund - Regular Plan Growth- 1000/-. 6. Icici prudential Balanced Advantage Fund Regular-1000 7. Icici prudential Dividend Yield Fund-1000 8. Icici prudential Equity and Debt fund-1000 9. Icici prudential Value and Discovery fund-1000 10. Nippon small and multi cap-1000 Please suggest whether if any changes needed or should I continue investing on above mf
Ans: You've set a strong foundation with a diverse range of funds, showing a proactive approach to investing. However, there are a few considerations to keep in mind to optimize your portfolio:

Diversification: While diversifying across fund types is good, ensure you're not over-diversifying within similar categories. Consolidating similar funds can simplify your portfolio.
Consistency: Regular review is essential. Keep an eye on fund performance, and if a fund consistently underperforms its benchmark or peers, consider replacing it.
Goals Alignment: Ensure your investment choices align with your financial goals. For example, ELSS for tax-saving should ideally be held for the long term, while balanced funds can offer a mix of growth and stability.
Risk Tolerance: Understand your risk tolerance. Some funds like small and mid-cap or value discovery can be more volatile but offer higher growth potential. Ensure your portfolio aligns with your risk appetite.
Costs: Keep an eye on the expense ratio. Lower expense ratios can improve your returns over the long term.
Considering these factors, you might consider:

Consolidating funds with similar objectives.
Reviewing the performance of Icici prudential Dividend Yield Fund and Nippon small and multi-cap, as these categories can be volatile.
Rebalancing your portfolio periodically to ensure alignment with your goals and risk tolerance.
Remember, while it's essential to stay invested for the long term, regular reviews and adjustments can help optimize your returns and keep your portfolio aligned with your financial goals. Consult with a financial advisor for personalized advice tailored to your needs.

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8342 Answers  |Ask -

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

Asked by Anonymous - May 13, 2025
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Greetings!!!! I am 43 years Old, I had started 10k per month TATA AIA SIP in previous year for total 7years Plan. I want to education plan for my 1 kid who is 6 years old now. Please advice and guide me about more investments plan, as i am still confused about future growth and any plan for my wife age 38years.
Ans: You're at a critical financial stage. Planning for your child’s education and securing your family’s future are both top priorities. You've already started a ULIP, which is a start. But let’s take a deeper 360-degree view of your situation.

Below is a detailed plan, broken into simple sections for better clarity.



Assessment of Your Current ULIP Investment

You're investing Rs. 10,000 per month in a 7-year ULIP.



ULIPs mix insurance with investment. That reduces the growth power of your money.



Charges like premium allocation, fund management, and mortality charges reduce returns.



Your actual invested amount is much lower in the first few years.



ULIPs have limited flexibility in fund switching and partial withdrawal rules.



Maturity benefits are taxed if the annual premium exceeds Rs. 2.5 lakh. Be cautious of this.



A ULIP is not ideal for education goals or long-term wealth building.



As a Certified Financial Planner, I suggest surrendering this policy and moving funds to mutual funds.



You can continue till 5 years to avoid surrender charges if already started.



But do not renew after the 7-year term. Don't increase contributions in this ULIP.



Planning for Your Child’s Higher Education

Your child is 6 years old. You have around 11-12 years.



College education in India or abroad can cost Rs. 30–60 lakhs or more.



Instead of ULIPs, invest in diversified mutual funds. This will give better inflation-adjusted returns.



Use a mix of large cap, flexi cap and small cap mutual funds.



Start SIPs in these funds with a long-term horizon of 10-12 years.



You may also consider goal-based child education funds that are actively managed.



Don't invest in direct funds. They look cheaper, but don’t offer guidance.



Always invest through a Certified Financial Planner via a regular plan.



Your investment will stay aligned with your goal as the planner will guide with rebalancing.



Use a dedicated SIP only for child’s education goal. Don’t merge it with retirement planning.



Suggested Action Plan for Child’s Education

Shift future contributions from ULIP to SIPs in active funds.



Start with Rs. 20,000 per month SIP only for education.



Review this SIP every year and increase it by 10%-15% annually.



Add lump sums like bonuses or yearly increments into the same goal fund.



In the last 2 years before the education goal, shift to debt funds slowly.



This will protect your accumulated amount from equity volatility.



Investment Plan for Your Wife (Age 38)

She has a long horizon. She can invest for both retirement and her independent needs.



Open a separate mutual fund folio in her name.



Start SIPs in flexi cap, large & midcap, and hybrid funds in regular plans.



You can start with Rs. 10,000 per month and increase gradually.



You may also use her PPF account for additional tax-free corpus.



Avoid investing in gold, insurance policies, or real estate for her.



Ensure she has her own health insurance and a term insurance if she’s working.



If she’s not working, then create an emergency fund in her name.



That gives her independence and safety if she needs cash.



Family Protection with Insurance

You did not mention your term cover. You must have it if not already.



Ideal cover should be 15–20 times your yearly income.



ULIPs or LIC endowment policies should not be considered for protection.



Avoid investment-linked insurance plans. Keep insurance and investment separate.



Review your existing insurance covers. Add riders like critical illness and accident if needed.



Tax Efficient Planning

Use Section 80C wisely. Don’t just rely on ULIP or LIC plans.



Max out PPF, ELSS mutual funds, and children tuition for tax saving.



Invest in actively managed ELSS funds for better returns than ULIPs.



Avoid index funds for tax planning. They may underperform in volatile markets.



Debt funds are taxed as per slab now. Use carefully if short horizon.



Track capital gains if you sell mutual funds. Use new tax rules for equity funds:



  - LTCG above Rs. 1.25 lakh taxed at 12.5%

  

  - STCG taxed at 20%



Plan redemptions well in advance to manage taxes efficiently.



Retirement Planning (For You and Wife)

Start a separate SIP for your retirement corpus. Do not merge with other goals.



You have 17 years for retirement. That’s good for wealth accumulation.



Invest in a mix of actively managed flexi-cap and large-cap funds.



Add hybrid funds to reduce volatility as you near retirement.



Continue EPF, and increase VPF if possible. It is tax-free and safe.



Don't consider NPS if liquidity is important. Maturity rules are rigid.



Use mutual funds with regular advice to stay on track till age 60.



Exit ULIPs and Poor Insurance Products

You mentioned TATA AIA ULIP. Continue for 5 years to avoid penalty.



After that, exit and move funds to SIP in mutual funds.



If you or wife have LIC endowment, Jeevan Saral, or ULIPs, surrender them.



Reinvest maturity amount into SIPs in regular mutual fund plans.



Do not fall for insurance agents who pitch plans as tax saving or guaranteed.



Emergency Fund and Liquidity

Keep at least 6 months of family expenses in a liquid mutual fund.



Don’t use your SIP or education fund as emergency source.



You may open a separate savings bank linked sweep account for this.



This fund will help if there is any job loss, health issue, or urgent need.



What Not to Do

Don’t invest in new ULIPs or insurance-linked plans.



Avoid direct mutual fund investments. You won’t get guided rebalancing.



Do not use your child’s education fund for house down payment.



Don’t pick index funds. They underperform in sideways or bear markets.



Don’t buy land or gold as an investment for your goals.



Final Insights

You are at a very strategic life stage. You have time and income strength.



ULIPs will not help you grow wealth. Shift to goal-based mutual fund SIPs.



Separate goals: child education, your retirement, wife’s security, and emergencies.



Invest only through a Certified Financial Planner for customised long-term support.



Review all goals every year. Increase SIPs with income.



Protect family with pure term insurance and health insurance.



Focus on building wealth in regular mutual funds, not through insurance products.



Real financial freedom comes when goals are funded without stress.



You have a clear head start. Use it with discipline and right guidance.



Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...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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