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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Nov 26, 2021

Mutual Fund Expert... more
Sonal Question by Sonal on Nov 26, 2021Hindi
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I am 38 years old and very new to mutual funds with less knowledge about it.

Please suggest few mutual funds where I can invest a total Rs 6,000 per month in different schemes for 3-5 years.

Should I opt for online or offline mode as a beginner?

Will it benefit me for income tax?

Ans: Offline/Online has no impact on taxes. You can consider Axis ESG Equity Fund (Growth), Parag Parikh Flexi Cap Fund (Growth), SBI Magnum Global Fund (Growth) and DSP Quant Fund (Growth).

 

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  |8005 Answers  |Ask -

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

Asked by Anonymous - May 05, 2024Hindi
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Hi,Sir . Iam currently having Salary of 1 Lac per month. So far I have started my investments into PPF, NPS, Term Life, Health Insurance of both Parents and self. So far having expenses arround 40000. I initially planned to invest in chits but due to frauds I am scared hence looking for Mutual funds as an option.
Ans: It's great to hear that you're actively planning your investments and considering options like mutual funds. Given your monthly salary of Rs. 1 lakh and existing investments in PPF, NPS, and insurance, let's explore how mutual funds can complement your financial strategy.

Mitigating Risks with Mutual Funds:

Considering recent incidents with chits, it's understandable to seek safer investment avenues. Mutual funds offer professional management and regulatory oversight, reducing the risk of fraud or mismanagement.

Diversification and Risk Management:

Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other assets. This diversification helps spread risk and potentially enhances returns compared to individual investments.

Types of Mutual Funds:

Equity Funds: These funds invest primarily in stocks, offering growth potential over the long term. They suit investors with a higher risk tolerance and longer investment horizon.

Debt Funds: Debt funds invest in fixed-income securities such as bonds and government securities. They provide stability and regular income, making them suitable for conservative investors.

Hybrid Funds: Hybrid or balanced funds invest in a mix of equities and debt instruments. They offer a balanced risk-return profile, catering to investors seeking both growth and income.

Investment Considerations:

Risk Appetite: Assess your risk tolerance and investment goals to determine the most suitable mutual fund categories for your portfolio.

Investment Horizon: Mutual funds are ideal for long-term wealth creation. Determine your investment horizon and choose funds aligned with your time horizon.

Expense Management: Mutual funds charge management fees, known as expense ratios. Compare expense ratios and opt for funds with competitive fees to maximize returns.

Tax Efficiency: Consider tax implications when selecting mutual funds. Equity funds held for over one year qualify for long-term capital gains tax benefits, while debt funds are subject to different tax rules.

Consultation and Research:

Before investing, conduct thorough research on different mutual funds, considering factors such as fund performance, track record, and fund manager expertise. Additionally, seek advice from a Certified Financial Planner to tailor your investment strategy to your financial goals and risk profile.

Conclusion:

Mutual funds offer a transparent, regulated, and diversified investment avenue suitable for investors of varying risk profiles. By aligning your investments with your financial objectives and risk tolerance, you can build a robust portfolio for long-term wealth accumulation.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8005 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 03, 2024

Asked by Anonymous - Sep 03, 2024Hindi
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I am 59 yrs old, want to invest Rs 10 lakhs in mutual funds.Pls suggest me the specific funds where I can invest to have a regular monthly income of around 25k.l also had an initial investment of around 15 lakhs in Mutual funds.
Ans: At age 59, your goal is to invest Rs. 10 lakhs in mutual funds to generate a regular monthly income of Rs. 25,000. You also have an existing investment of Rs. 15 lakhs in mutual funds. The challenge is to create a strategy that balances income generation with capital preservation.


Recommending specific mutual fund schemes in an online forum is not advisable for several reasons:

Individual Needs Vary: Every investor has unique financial goals, risk tolerance, and time horizons. A scheme suitable for one person might not be appropriate for another. Providing a specific recommendation without understanding your complete financial situation can lead to unsuitable investment choices.

Dynamic Market Conditions: The performance of mutual funds can vary based on market conditions. What might be a top-performing scheme today might not perform as well in the future. Recommending specific schemes online doesn't consider future market changes.

Need for Personalised Advice: A Certified Financial Planner (CFP) can provide advice tailored to your situation. They will consider your existing investments, income needs, and risk tolerance before suggesting specific funds. This personalized approach is more effective than generic online advice.

Importance of Income-Generating Funds
For your objective, investing in mutual funds that focus on generating regular income is crucial. These funds usually distribute dividends or allow you to set up a Systematic Withdrawal Plan (SWP) to meet your income needs.

Why Actively Managed Funds Are Better
Investing in actively managed funds through a CFP is generally preferable over index funds or direct funds. Here’s why:

Outperformance Potential: Actively managed funds aim to outperform their benchmarks. Experienced fund managers make strategic decisions based on market conditions, which can lead to better returns.

Regular Monitoring: A CFP will regularly monitor your portfolio, ensuring it remains aligned with your financial goals. They can make adjustments based on your evolving needs or market changes.

Guidance on Complex Decisions: With actively managed funds, you receive ongoing guidance. Your CFP can help you navigate market volatility, tax implications, and income strategies, which is crucial as you approach retirement.

Suitable Mutual Fund Categories for Regular Income
Hybrid Funds: These funds invest in a mix of equity and debt. The equity portion offers growth potential, while the debt portion provides stability. Hybrid funds are ideal for generating regular income with moderate risk.

Monthly Income Plans (MIPs): MIPs focus on providing regular income through a combination of fixed income and equity investments. They aim for stable returns with lower risk exposure compared to pure equity funds.

Debt Funds with Systematic Withdrawal Plans (SWPs): Debt funds invest in fixed-income securities, offering lower risk and stable returns. An SWP allows you to withdraw a fixed amount regularly, turning your investment into a source of income. This is often more tax-efficient than traditional fixed deposits.

Considerations for Your Investment Strategy
Review Your Existing Portfolio: Assess your current Rs. 15 lakh mutual fund investment. Ensure it aligns with your income goals. If necessary, consider reallocating to more income-focused funds.

Systematic Withdrawal Plan (SWP): An SWP can be set up to withdraw Rs. 25,000 per month, providing a steady income while allowing the remaining investment to grow.

Risk Management: As you approach retirement, protecting your capital is essential. Focus on funds that offer stability and moderate growth rather than high-risk options like small-cap or sectoral funds.

Tax Efficiency: Income generated from mutual funds, especially through SWP, can be tax-efficient. Long-term capital gains from equity-oriented funds and interest from debt funds are generally taxed at lower rates.

Final Insights
Investing Rs. 10 lakhs to generate a regular monthly income of Rs. 25,000 requires careful planning. While recommending specific mutual fund schemes is not suitable in an online forum, focusing on the right categories—such as hybrid funds, MIPs, and debt funds with SWP—can help achieve your goals. Reviewing your existing Rs. 15 lakh investment and possibly reallocating to more income-focused funds is also crucial.

Consulting with a Certified Financial Planner (CFP) will ensure that your investment strategy is tailored to your specific needs, taking into account your risk tolerance, income requirements, and market conditions.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

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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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