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Ramalingam

Ramalingam Kalirajan  |8880 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 17, 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 - Apr 20, 2024Hindi
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I am 28 years old and investing 1k in quant small cap, 1k in quant infrastructure fund and 1k in Aditya Birla PSU fund. It's good for long term like 20 years. Please advise me.

Ans: Current Investment Overview
You have chosen a small cap, infrastructure, and PSU fund for your investments. Each fund focuses on different sectors, providing a degree of diversification.

Analysis of Selected Funds
Quant Small Cap Fund: Small cap funds invest in smaller companies with high growth potential but are also highly volatile. They can offer substantial returns over the long term but come with higher risks.

Quant Infrastructure Fund: Infrastructure funds invest in companies involved in the infrastructure sector. These funds can benefit from economic development and government spending but can be sensitive to economic cycles and regulatory changes.

Aditya Birla PSU Fund: PSU funds invest in public sector undertakings (PSUs). These can provide stability and regular dividends but may face slower growth compared to private sector companies.

Diversification and Risk Management
Your current portfolio covers various sectors, but it may still be more concentrated than desired. Balancing investments in small cap, infrastructure, and PSU funds can provide some diversification, yet it may not be enough to reduce overall risk effectively.

Considerations for Long-Term Investment
Risk Tolerance: At 28, you have a long investment horizon, which allows for higher risk tolerance. However, balancing high-risk investments with more stable options is crucial for long-term growth.

Regular Monitoring: Keep an eye on the performance of your funds. Regular reviews can help you make necessary adjustments based on market conditions and fund performance.

Rebalancing: Periodic rebalancing is essential to maintain your desired asset allocation. This ensures that your portfolio remains aligned with your risk tolerance and investment goals.

Potential Modifications
Add Diversification: Consider adding funds that cover large-cap and mid-cap stocks for better diversification. This can reduce the overall volatility of your portfolio.

Sector Balance: While sector-specific funds can provide growth, adding more balanced equity funds or diversified mutual funds can help spread risk.

Benefits of Actively Managed Funds
Actively managed funds provide professional management and the potential to outperform the market. They offer flexibility in adjusting to market conditions, which can be beneficial for long-term growth.

Regular vs. Direct Funds
Direct funds have lower expense ratios but require more effort in fund selection and monitoring. Regular funds through a Mutual Fund Distributor (MFD) with a Certified Financial Planner (CFP) can provide valuable guidance and professional management, balancing risks and returns effectively.

Recommendations
Add Large-Cap or Multi-Cap Funds: Consider adding a large-cap or multi-cap fund to your portfolio. These funds provide stability and steady growth.

Consult a CFP: For tailored advice, consult a Certified Financial Planner (CFP). They can help you optimize your investment strategy based on your goals and risk tolerance.

Long-Term Perspective: Keep a long-term perspective and avoid frequent changes based on short-term market fluctuations. Consistent investing and patience are key to achieving long-term financial goals.

Conclusion
Your current investments in small cap, infrastructure, and PSU funds are a good start. Adding more diversified funds and consulting with a CFP can help you achieve a balanced and robust portfolio for long-term growth.

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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Vivek

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Financial Planner - Answered on Apr 19, 2024

Asked by Anonymous - Apr 18, 2024Hindi
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I am 25 years old and investing 2k in quant small cap, 2k in Nippon small cap, 1k in parag Parikh flexi, 1k in Motilal Oswal midcap, 1k in HDFC mid cap. Is it good for long term like 30 years. Plz advice me
Ans: Hello,

Your portfolio seems to be well-diversified across different sectors and market caps, which is generally a good approach for long-term investing. Here are a few things to consider:

Performance History: Look at the historical performance of each mutual fund scheme over various time frames (1 year, 3 years, 5 years, and since inception). Compare it with relevant benchmarks and peer group averages to assess how well the fund has performed.

Fund Manager Experience: Evaluate the experience and track record of the fund manager. A skilled and experienced fund manager can significantly impact the performance of the fund.

Expense Ratio: Consider the expense ratio of each mutual fund scheme. Lower expense ratios mean more of your investment returns stay with you rather than being eaten up by fees.

Investment Strategy: Understand the investment strategy of each mutual fund scheme. Make sure it aligns with your risk tolerance, investment goals, and time horizon. For example, small-cap funds tend to be riskier but offer higher growth potential, while flexi-cap funds offer more flexibility in asset allocation.

Asset Allocation: Ensure that your overall portfolio is well-diversified across different asset classes, sectors, and market caps. Avoid overconcentration in any single fund or sector.

Risk Management: Assess the risk management practices of each mutual fund scheme. Look for funds with a disciplined approach to risk management and a focus on preserving capital during market downturns.
Fund House Reputation: Consider the reputation and credibility of the mutual fund house managing the scheme. A well-established and reputable fund house is more likely to have robust investment processes and governance standards.

Regular Review: Regularly review the performance and portfolio composition of each mutual fund scheme. Make adjustments to your portfolio as needed based on changes in your investment objectives, market conditions, and fund performance.
It's also a good idea to consult with a SEBI registered investment advisor who can provide personalized advice based on your financial situation, goals, and risk tolerance. They can help you build a well-structured investment portfolio tailored to your needs.

It's also a good idea to consult with a SEBI registeredinvestment advisor who can provide personalized advice based on your financial situation, goals, and risk tolerance. They can help you build a well-structured investment portfolio tailored to your needs.

..Read more

Ramalingam

Ramalingam Kalirajan  |8880 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2024

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Hello, I am 32 years old and have started investing in following funds. Please review. I am investing with a horizon of 10 - 15 years and ready to take risk. The investment is not linked to any specific goal but to save and create wealth. 1. Parag Parik - 10k 2. Kotak Multicap - 10k 3. Canra Rebocco Small Cap - 5k 4. Canara rebocco blue chip - 5k 5. ICICI PRU value discovery - 10k 6. AXIS Growth Opportunities - 9k 7. HDFC Balance Advantage - 7k 8. Groww Index Fund - 7k 6. Axis ELSS - 2.5k
Ans: It's great to see your proactive approach towards investing at the age of 32, with a clear horizon of 10-15 years and a willingness to take on risk to achieve your wealth creation goals. Let's review your investment portfolio to ensure alignment with your objectives.

Assessment of Fund Selection:

Parag Parikh Long Term Equity Fund (PPLTEF): This fund follows a flexible investment strategy, investing in a mix of Indian and foreign equities. It's known for its consistent performance and focus on quality stocks.

Kotak Standard Multicap Fund: Multicap funds offer diversification across market capitalizations. Kotak is a reputable AMC, and this fund has a strong track record of delivering steady returns over the long term.

Canara Robeco Small Cap Fund: Small-cap funds have the potential for high growth but come with higher volatility. Canara Robeco has a decent reputation, but small-cap investments require careful monitoring due to their inherent risk.

Canara Robeco Bluechip Equity Fund: Blue-chip funds invest in large-cap stocks known for their stability and reliability. This fund offers a conservative approach within your portfolio, balancing the risk associated with small-cap investments.

ICICI Prudential Value Discovery Fund: Value-oriented funds focus on undervalued stocks with growth potential. ICICI Pru is a trusted AMC, and this fund aims to deliver long-term capital appreciation.

Axis Growth Opportunities Fund: This fund targets growth-oriented companies across sectors. With a focus on mid and small-cap stocks, it adds diversification to your portfolio but may come with higher volatility.

HDFC Balanced Advantage Fund: Balanced advantage funds dynamically manage equity exposure based on market conditions. This can provide stability during market downturns while capturing growth opportunities during upswings.

Groww Index Fund: Index funds passively track market indices. While they offer low expense ratios and broad market exposure, they may underperform actively managed funds during certain market conditions.

Axis Long Term Equity Fund (ELSS): ELSS funds offer tax benefits under Section 80C of the Income Tax Act. Axis is a reputable AMC, and this fund invests predominantly in equity, providing potential for capital appreciation along with tax savings.

Overall Portfolio Assessment:

Your portfolio reflects a diversified mix of equity funds across market capitalizations and investment styles. It's well-suited for long-term wealth creation, considering your risk appetite and investment horizon.

Recommendation:

Regularly review your portfolio's performance and rebalance if necessary to maintain your desired asset allocation. Consider consulting with a Certified Financial Planner periodically to ensure your investments remain aligned with your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8880 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 24, 2024

Asked by Anonymous - Jul 12, 2024Hindi
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I'm 39 yr and investing 1 k in parag flexi cap 1 k in quant active fund lumsum in SBI Magnum mid cap , sips in SBI contra, motilal midcap, HDFC midcap, icic debt and equity , lumsum in quant small cap, pgim mid cap and sips in SBI opportunity technology fund ICICI technology and tata digital fund Lumsum in uti nift index fund Pl advise me
Ans: You are currently investing across a diverse range of mutual funds, including equity, mid-cap, and technology funds, as well as some debt funds. This diversified approach is beneficial for managing risk and capturing different market opportunities. However, it’s essential to review your portfolio to ensure it aligns with your financial goals and risk tolerance.

Analysis of Fund Types
1. Equity Funds

Flexi Cap, Mid Cap, and Small Cap Funds:

Investing in flexi cap, mid cap, and small cap funds provides growth potential. These funds tend to be more volatile but offer higher returns over the long term.
Ensure your investments are balanced across various market capitalizations to avoid overexposure to any single segment.
Technology Funds:

Technology funds focus on the technology sector. They can offer high growth potential but may also be more volatile.
Having multiple technology-focused funds can lead to overlapping investments. Consider consolidating into one or two technology funds to reduce redundancy.
2. Debt Funds

Debt Funds:
Debt funds offer stability and lower risk compared to equity funds. They are suitable for balancing your portfolio and providing steady returns.
Ensure you have an appropriate mix of short-term and long-term debt funds based on your investment horizon and risk appetite.
3. Index Funds

Index Funds:
Index funds track the performance of a market index. While they offer broad market exposure and low expense ratios, they do not provide the potential for higher returns that actively managed funds might.
Actively managed funds, although with slightly higher expense ratios, offer the opportunity for better returns through expert stock selection and management.
Advantages of Actively Managed Funds
Expert Management:

Actively managed funds benefit from professional fund managers who research and select stocks to achieve superior returns.
Flexibility:

Fund managers can adjust portfolios based on market conditions, potentially providing better performance in volatile markets.
Tailored Investment Strategies:

Actively managed funds can adapt strategies to capitalize on market opportunities, which index funds cannot do.
Recommendations for Optimization
1. Consolidate and Simplify

Review your investments in technology and mid-cap funds. You have several overlapping investments. Consolidate into fewer funds to simplify your portfolio and avoid redundancy.
2. Increase SIP Contributions

Consider increasing your SIP amounts gradually. This will enhance your long-term growth potential through the power of compounding.
3. Regular Reviews

Regularly review your portfolio to ensure it aligns with your financial goals and risk tolerance. Adjust your investments based on market conditions and personal circumstances.
4. Seek Professional Advice

If you are not satisfied with your current MFD or if you need more tailored advice, consider consulting a Certified Financial Planner. They can offer personalized recommendations based on your specific financial goals and risk profile.
5. Avoid Overdiversification

While diversification is important, overdiversification can lead to diluted returns. Ensure your portfolio is balanced but not overly complex.
Final Insights
Your current investment strategy shows a good mix of equity, mid-cap, technology, and debt funds. Simplifying and consolidating your investments can reduce complexity and improve management. Regular reviews and increasing SIP contributions can enhance your portfolio’s performance. Consulting a Certified Financial Planner can provide additional personalized guidance to align your investments with your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8880 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 09, 2025

Asked by Anonymous - Jun 09, 2025
Money
Hello Sir, I am 43 years, I have around 2 cr in stock market, 1cr in government bonds and mutual funds, a flat in Bangalore worth 70 lakhs and recently I sold around 1.6 cr worth stocks and savings to purchase a house in the outskirts of a two tier city where I am currently residing. Was it worth investing in this property? I have taken a break from my job
Ans: You have made many financial moves with clarity and purpose. Your asset base is strong.

You sold Rs.?1.6 crore worth of financial assets to buy a house. Let us now assess this decision. We’ll look at all angles to guide you.

This detailed review will help you make smart, balanced, long-term decisions.

Was Buying the Property a Good Decision?

Owning a house offers emotional comfort and stability.

It also lowers rent cost and gives more space.

But property is not a flexible investment.

It is hard to sell fast when money is needed.

Property needs repairs, tax payments and legal care.

Financial investments do not have such burdens.

Your earlier financial assets were more liquid.

You had Rs.?2 crore in stocks and Rs.?1 crore in bonds and mutual funds.

After this new property, your real estate share is now very high.

This can impact long-term growth and flexibility.

Financial assets like mutual funds often grow faster.

Properties in outskirts grow slowly and depend on area development.

This growth is not guaranteed.

You must check if the area has good infrastructure plans.

Is Real Estate the Best Wealth-Building Tool?

Property is not the fastest wealth builder.

Equity mutual funds grow faster over time.

Property needs high capital, low returns and long holding periods.

You may also face legal or title issues.

Rent income is also not guaranteed.

Real estate is hard to sell when you need cash.

Stocks and bonds are easier to exit.

Real estate gives pride, but less profit.

You must not depend only on property for wealth.

How Your Asset Mix Looks Now

Your assets are now heavy in real estate.

Rs.?70 lakhs flat in Bangalore plus Rs.?1.6 crore new house.

That’s over Rs.?2.3 crore in property.

Stock and mutual fund holding is now Rs.?2 crore approx.

This makes the ratio about 55% in real estate.

For financial growth, this is very high.

Financial assets give compounding and flexibility.

Too much in real estate may hurt long-term goals.

You may face difficulty accessing funds in emergencies.

Liquidity is now lower than before.

You are on a job break, so liquidity is more important now.

During Career Break, Liquidity is Vital

When you are not earning, liquidity is your protection.

Property cannot give you quick funds in emergencies.

But mutual funds and stocks can be sold in 1-3 days.

You must protect cash flow till income resumes.

Emergency fund should be 12 months’ living cost.

Ensure you are not over-relying on property.

What You Could Have Considered Instead

You could rent in outskirts instead of buying.

Renting keeps your money invested in mutual funds.

You could have earned higher returns with flexibility.

Money in mutual funds can help meet multiple goals.

Renting avoids repair, tax and legal costs.

Ownership is not always necessary.

Emotional satisfaction from a house is valid.

But it must not reduce your long-term growth.

Why Mutual Funds Are a Better Tool for Growth

Mutual funds give professional fund management.

They offer better diversification than any property.

Regular mutual fund plans offer expert support.

A Certified Financial Planner can help choose better funds.

Actively managed funds adjust to market changes.

Index funds just copy the market.

Index funds don’t protect against sharp market falls.

They do not beat the market in tough times.

Direct mutual funds also have no personal help.

If you invest directly, you get no strategy or advice.

Regular plans give human support and help in planning.

Investment without expert help is like driving without direction.

Choose mutual funds through MFD with CFP support.

What You Should Do Next

Review if the new house is for self-use or investment.

If self-use, then it meets emotional comfort, not wealth goals.

If investment, then rethink its growth and returns.

Keep some funds in high-quality mutual funds.

Avoid putting more into real estate.

Resume SIPs once cash flow starts again.

Avoid index funds and direct funds going forward.

Focus on active funds with proper advice.

Set goals for retirement, health, and other needs.

Adjust asset mix to support those goals.

Keep financial assets above 50% for better future growth.

Plan your tax-saving investments every year.

Don’t depend only on property or insurance-based plans.

If you hold any LIC, ULIP, or combo plans, review them.

If returns are poor, consider surrendering and investing in mutual funds.

Property must be need-based, not return-based.

Let financial products drive long-term growth.

Take insurance for risk protection, not investment.

Continue asset review every 6 months.

Choose Certified Financial Planner to keep you on track.

Finally

Your decision to buy the house brings peace, but lowers growth.

It’s fine if emotional security is your key goal now.

But make sure you don’t lose financial strength.

Property is hard to manage, and slow to grow.

Your asset allocation needs rebalancing toward financial investments.

Start investing again when income resumes.

Reduce dependence on physical assets.

Trust actively managed mutual funds via regular plans.

Seek professional guidance to ensure your long-term success.

You’ve done well so far. With a few changes, you can go further.

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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