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Ramalingam

Ramalingam Kalirajan  |3763 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 27, 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
Krishan Question by Krishan on May 27, 2024Hindi
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I am 38 years old currently investing 4000 in quant small cap 6500 in quant mid cap 6000 in sbi small cap 2000 in quant flexi cap 2000 in quant infrastructure fund need a corpus of 2 crore how much time i will do the sip.

Ans: You are currently investing Rs 20,500 monthly in a mix of small cap, mid cap, flexi cap, and infrastructure funds. This diversified approach is commendable, as it balances risk and potential returns.

Understanding Your Financial Goal
Your goal is to accumulate a corpus of Rs 2 crores. Achieving this goal depends on various factors such as the rate of return, investment duration, and consistency in your SIP (Systematic Investment Plan) contributions.

Estimating Time to Reach Your Goal
To estimate the time required to reach your goal, we need to consider an average rate of return for your investments. Typically, equity mutual funds can provide annual returns between 10% to 15%.

Assuming an average annual return of 12%, let's evaluate the duration.

Benefits of SIP Investments
SIP investments are an excellent way to accumulate wealth over time. They offer benefits like rupee cost averaging and the power of compounding.

Advantages of Actively Managed Funds
Actively managed funds have professional fund managers who adjust the portfolio based on market conditions. This can potentially yield higher returns compared to passive funds.

Importance of Consistency in SIPs
Consistency is crucial in SIP investments. Regular contributions help in accumulating wealth over the long term, regardless of market volatility.

Potential Growth of Your Investments
With a consistent SIP and an average return rate, your investments can grow substantially over time. Regular reviews and adjustments are necessary to stay aligned with your financial goals.

Regular Monitoring and Rebalancing
Review your portfolio regularly to ensure it remains aligned with your goals. Rebalancing helps in maintaining the desired asset allocation and managing risk.

Seeking Professional Guidance
Consulting a Certified Financial Planner (CFP) can provide personalized advice. They can help you create a strategic plan and make informed decisions.

Calculating the Duration
Assuming an average annual return of 12%, your monthly SIP of Rs 20,500 needs to be invested consistently. Using financial planning tools and assumptions, we can estimate the duration required to achieve Rs 2 crores.

Enhancing Your Investment Strategy
Consider increasing your SIP contributions as your income grows. This will accelerate the wealth accumulation process and help you reach your goal sooner.

Balancing Risk and Returns
Diversification across different types of funds helps in balancing risk and returns. Avoid putting all your money in high-risk funds.

Avoiding Common Pitfalls
Stay disciplined and avoid withdrawing from your investments prematurely. Market fluctuations are normal, and staying invested for the long term is key to achieving your financial goals.

Importance of Emergency Fund
Maintain an emergency fund to cover unforeseen expenses. This ensures you don't have to dip into your investments during emergencies.

Tax Implications
Be aware of the tax implications on mutual fund investments. Long-term capital gains (LTCG) tax and short-term capital gains (STCG) tax can impact your net returns.

Conclusion
To achieve your goal of Rs 2 crores, stay consistent with your SIP contributions and regularly review your portfolio. Consult a CFP for personalized guidance and consider increasing your SIP amounts as your income grows. With discipline and a strategic approach, you can achieve your financial goals.

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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Ramalingam

Ramalingam Kalirajan  |3763 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 01, 2024

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Hi Sir Sangayya hear from Karnataka my age is 43 from last 3 years I started my SIP details r as below 1 ELSS - 5 sips each 1k 2. Large & mid cap fund - 3 sips 1k each 3. Thematic fund - Franklin India opp - 5k 4. Multi asset allocator - Tata 5k 5.Flexi cap fund - 2 Sips 1k each 6. Dynamic Asset - Edelweiss balanced Adv fund 1k 7. Small cap - Nippon India 1k Total monthly 22k is my investment kindly suggest I want to build my corpus 1cr in another 10 year & how much I have to invest more to achieve Target
Ans: Hello Sangayya, it's great to see your commitment to building your financial future through SIP investments. Let's break down your goal of reaching a corpus of 1 crore in 10 years and assess your current investment approach:

Review Current Investments: Evaluate the performance of your existing SIPs relative to their benchmarks and peers. This will help you understand if adjustments are needed to optimize your portfolio for growth.
Assess Required Monthly Investment: To reach a corpus of 1 crore in 10 years, you'll need to calculate the required monthly investment based on your expected rate of return. This depends on factors like the type of funds you're investing in and prevailing market conditions.
Consider Increasing SIP Amount: If your current monthly investment of 22k isn't sufficient to reach your goal, you may need to increase your SIP amounts or explore additional investment avenues. A Certified Financial Planner can help you determine the optimal investment strategy based on your risk tolerance and financial goals.
Stay Consistent and Patient: Building a substantial corpus takes time and discipline. Stay committed to your investment plan, continue SIPs regularly, and avoid making emotional decisions based on short-term market fluctuations.
Regular Portfolio Review: Periodically review your portfolio's performance and make adjustments as needed. Rebalancing your investments and exploring new opportunities can help you stay on track towards achieving your financial goals.
Remember, while setting ambitious targets is commendable, it's essential to ensure that your investment strategy is realistic and aligned with your risk tolerance and financial capacity. With careful planning and perseverance, you can work towards building a significant corpus over the next decade.

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Ramalingam

Ramalingam Kalirajan  |3763 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 18, 2024

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I am 54 yrs old & i have currently 3 SIP's 0f 5000 1) Aditya birla SL small cap fund Reg(G) 2) HSBC small cap fund Reg (G) 3) Mirae asset large and midcap fund reg (G) and Fix in MF 250000 each in Kotak flexi cap fund Reg (G) and Mirae asset large cap fund Reg (G) from last 6yrs 3 months. Also My wife SIP is 10000/month in 1) ICICI Pru MidCap F(G) 2) Mahindra Manulife small Cap F Reg (G) 3) Motilal Oswal Large and Mid cap fund Reg(G) 4) Nippon india Multi cap Fund (G) from last 6 months. I want to 1.2 to 1.5 crore in next 5 yrs. How much investment required to achieve the corpus.
Ans: It's commendable that you and your wife have taken proactive steps towards securing your financial future through systematic investment plans (SIPs) and fixed investments in mutual funds. Let's formulate a strategic plan to achieve your desired corpus of 1.2 to 1.5 crores within the next 5 years.

Assessing Current Investments
Evaluation of SIPs:

Analyze the performance of your current SIPs in small-cap, mid-cap, and large-cap funds to ensure they align with your risk appetite and return expectations.
Review the consistency of fund performance, expense ratios, and fund manager expertise to gauge the suitability of these investments for achieving your financial goals.
Fixed Investments in Mutual Funds:

Assess the performance of your fixed investments in flexi-cap and large-cap funds over the past 6 years and 3 months.
Consider the fund's track record, investment style, and portfolio composition to determine their potential to contribute towards your desired corpus.
Review of Wife's SIPs:

Evaluate the suitability of your wife's SIPs in mid-cap, small-cap, large & mid-cap, and multi-cap funds based on their risk-return profile and investment objectives.
Ensure that the chosen funds complement your overall investment strategy and align with your joint financial goals.
Calculating Required Investment
Goal-Based Investment Calculation:

Calculate the required monthly investment amount based on the targeted corpus of 1.2 to 1.5 crores and the remaining investment horizon of 5 years.
Consider factors such as expected rate of return, inflation, and risk tolerance to arrive at a realistic investment target.
Systematic Increase in Investment:

Determine the incremental increase in SIP amounts and fixed investments required to bridge the gap between your current portfolio value and the desired corpus within the specified timeframe.
Ensure that the revised investment plan is feasible and sustainable within your financial capacity.
Adjusting Investment Strategy
Portfolio Rebalancing:

Consider reallocating your existing investments or introducing new funds to diversify your portfolio and optimize returns.
Monitor the performance of your investments regularly and make necessary adjustments to maintain alignment with your financial goals.
Risk Management:

Mitigate risk by diversifying across different asset classes, market capitalizations, and investment styles.
Review your asset allocation periodically to ensure that it reflects changes in market conditions and your evolving risk tolerance.
Conclusion
By conducting a thorough assessment of your current investments and recalibrating your investment strategy to align with your financial goals, you can work towards achieving your target corpus of 1.2 to 1.5 crores within the next 5 years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Mutual Funds, Financial Planning Expert - Answered on Jun 17, 2024

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Is it safe to invest in gold through Gullak app
Ans: While Gullak offers a seemingly convenient way to invest in gold, there are some potential risks to consider:

Unregulated "Gold+" Program: The "Gold+" program's guaranteed 5% extra gold is a unique feature, but it's not entirely clear how Gullak achieves this. Since this program is unregulated, there's less oversight compared to SEBI-regulated mutual funds.
Counterparty Risk: Gullak mentions a 100% bank guarantee on your gold investment. However, the details of this guarantee and the specific bank involved are crucial. In case of any issue with the bank, there's a chance your investment might be impacted.
Limited Transparency: Compared to mutual funds, Gullak might not be as transparent about their fees and overall investment structure. This can make it difficult to fully understand the associated costs and risks.
Potential Hidden Costs: While Gullak might advertise low fees, there could be hidden costs associated with storage, insurance, or selling your gold holdings. Make sure you understand all the fees involved before investing.

Mutual Fund Gold:

Safety: Mutual funds are regulated by SEBI (Securities and Exchange Board of India) which adds a layer of security. Your investment represents units in the fund, not physical gold, but the underlying gold is typically stored in secure vaults.
Returns: Gold Mutual Funds invest in physical gold, reflecting the market price. You won't get a guaranteed bonus like with Gullak Gold+, but your returns are tied directly to the gold price's performance.
Liquidity: Gold Mutual Funds are generally quite liquid, allowing you to redeem your units on exchange platforms.
Here's why Mutual Fund Gold might be a better choice:

Transparency: Mutual Funds are more transparent in their holdings and fees compared to Gullak's "Gold+" program.
Flexibility: Mutual Funds offer various gold investment options with different expense ratios. You can choose a fund that suits your investment horizon and risk tolerance.
Market Exposure: Mutual Funds can offer exposure to gold along with diversification within the gold sector (e.g., international gold).

Why Consulting a Certified Financial Planner (CFP) is Wise:
A CFP is a financial professional who can provide personalized advice based on your specific financial situation and goals. Here's why consulting a CFP can be beneficial:

Risk Assessment: A CFP can help you assess your risk tolerance and determine if Gullak or Mutual Fund Gold is a suitable investment for you.
Portfolio Diversification: A CFP can advise you on how to incorporate gold into a diversified portfolio to manage risk and meet your long-term goals.
Understanding Gullak's "Gold+" Program: A CFP can help you analyze the details and potential risks associated with Gullak's "Gold+" program.
Comparison with Mutual Funds: A CFP can compare Gullak with various gold mutual fund options, considering factors like fees, expense ratios, and historical performance.
Remember: Financial planning is personal. Consulting a CFP can empower you to make informed investment decisions aligned with your unique circumstances.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...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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