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Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 20, 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
Nikhilesh Question by Nikhilesh on May 05, 2024Hindi
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Hi .. I am 42 years old.. Have accumulated around 1.3 Crores as of today in MF(51.5 L), PPF/SSY (36 L) and EPF(46 L). Target is to reach around 10 crores in the next 13-15 years. I am a High Risk investor. I am investing in the below mutual funds for a minimum tenure of another 13 years.. UTI Nifty 50 Index (12k), Mirae Asset Large and Midcap (3k), UTI Nifty 200 Momentum 30 (12k), Quant Midcap (35k), Invesco India Midcap (35k) , Quant Small cap (12k), Axis Small Cap (12k), Parag Parikh Flexicap (20k) and Quant Flexicap (20k). Apart from this will continue investing in PPF (1.5 L yearly), Sukanya Samriddhi Yojana (1.5 L yearly) and EPF (3.4 L yearly). Am I aligned to reach the goal with the funds selected or any changes needs to be done. Pls. suggest.

Ans: Your commitment to financial planning and goal-setting is commendable. Let's assess your investment portfolio and strategize for achieving your target of reaching ?10 crores in the next 13-15 years.

Your disciplined approach to savings and investment, coupled with clear long-term goals, sets a solid foundation for financial success.

Assessing Current Portfolio Alignment
Your current portfolio comprises a mix of mutual funds, PPF/SSY, and EPF, catering to your high-risk appetite. Let's evaluate the alignment of your portfolio with your target goal.

Analyzing Mutual Fund Selection
Your mutual fund selection reflects a diverse mix across large-cap, mid-cap, and small-cap segments. However, it's essential to consider the following aspects:

Performance History: Regularly monitor the performance of selected funds to ensure they consistently outperform their benchmarks.

Risk Management: Given your high-risk tolerance, focus on funds with a proven track record of managing volatility and delivering superior returns over the long term.

Evaluating PPF/SSY and EPF Contributions
Your continued contributions to PPF/SSY and EPF are prudent, considering their tax benefits and stability. However, ensure that the contribution amounts align with your overall investment strategy and target goal.

Adjustments and Recommendations
Based on the current portfolio and target goal, consider the following adjustments:

Review Fund Selection: Periodically review the performance of mutual funds and make adjustments if any funds underperform or fail to meet expectations.

Consider Additional Asset Classes: Explore diversification opportunities by incorporating other asset classes like international funds or thematic funds to further enhance portfolio growth potential.

Regular Portfolio Monitoring: Stay proactive in monitoring your portfolio's performance and make necessary adjustments to maintain alignment with your financial objectives.

Benefits of Regular Funds Investing through MFD with CFP Credential
Engaging a Mutual Fund Distributor (MFD) with a Certified Financial Planner (CFP) credential offers several benefits:

Tailored Advice: A CFP can provide personalized advice based on your financial goals, risk tolerance, and investment horizon.

Holistic Financial Planning: Benefit from comprehensive financial planning that considers all aspects of your financial life, including retirement, taxation, and estate planning.

Continuous Monitoring: An MFD with CFP credential can monitor your investments regularly and recommend adjustments as needed to keep your portfolio on track.

Conclusion
Your current investment portfolio exhibits a well-thought-out strategy geared towards long-term growth. However, periodic review and adjustments are essential to ensure alignment with your target goal of reaching ?10 crores in the next 13-15 years. Engaging a Certified Financial Planner can provide valuable guidance and support in optimizing your investment strategy for optimal outcomes.

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  |7101 Answers  |Ask -

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

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Hi Sunil.. I am 42 years old.. Have accumulated around 1.3 Crores as of today in MF(51.5 L), PPF/SSY (36 L) and EPF(46 L). Target is to reach around 10 crores in the next 13-15 years. I am a High Risk investor. I am investing in the below mutual funds for a minimum tenure of another 13 years.. UTI Nifty 50 Index (13k), Mirae Asset Large and Midcap (3k), UTI Nifty 200 Momentum 30 (18k), Quant Midcap (35k), Invesco India Midcap (35k) , Axis Small Cap (18k), Parag Parikh Flexicap (20k) and Quant Flexicap (20k) and Mirae Asset MidSmall400 Momentum Quality 100 ETF FoF (18k). Apart from this will continue investing in PPF (1.5 L yearly), Sukanya Samriddhi Yojana (1.5 L yearly) and EPF (3.4 L yearly). Am I aligned to reach the goal with the funds selected or any changes needs to be done. Pls. suggest.
Ans: Current Financial Position
You are 42 years old.

You have accumulated Rs 1.3 crores in various investments.

Mutual Funds: Rs 51.5 lakhs

PPF/SSY: Rs 36 lakhs

EPF: Rs 46 lakhs

You are a high-risk investor.

Your goal is to reach Rs 10 crores in the next 13-15 years.

Assessment of Current Investments
Mutual Funds
Your mutual fund portfolio includes:

Large-cap, mid-cap, and small-cap funds

Flexicap funds

An ETF fund of funds

You are investing significant amounts monthly.

Provident Fund (PF) and Public Provident Fund (PPF)
You have Rs 36 lakhs in PPF/SSY and Rs 46 lakhs in EPF.

These are safe, long-term investments.

Monthly Contributions
You invest:

Rs 1.5 lakhs yearly in PPF

Rs 1.5 lakhs yearly in SSY

Rs 3.4 lakhs yearly in EPF

Evaluating Future Investment Needs
Mutual Fund Selection
Your mutual fund selection is diversified.

You have exposure to large-cap, mid-cap, and small-cap segments.

Index Funds and ETFs
You have invested in an index fund and ETF fund of funds.

Index funds and ETFs follow the market. They do not aim to outperform it.

Actively managed funds aim to outperform the market.

They provide professional management and potentially higher returns.

Consider focusing more on actively managed funds.

Recommendations for Portfolio Optimization
Increase Allocation to Actively Managed Funds
Consider increasing your allocation to actively managed funds.

They offer potential for higher returns and professional management.

Regular Review and Rebalancing
Review and rebalance your portfolio regularly.

Ensure it aligns with your goals and risk tolerance.

Focus on High-Growth Funds
Given your high-risk appetite, focus on high-growth mutual funds.

Mid-cap and small-cap funds can offer significant growth.

Maintain Safe Investments
Continue your investments in PPF, SSY, and EPF.

These provide stability and guaranteed returns.

Evaluate ULIPs
If you have ULIPs, consider their charges and returns.

Surrendering ULIPs and reinvesting in mutual funds might be beneficial.

Professional Guidance
Seek advice from a Certified Financial Planner.

They can provide tailored advice and ensure your investments align with your goals.

Final Insights
You have a well-diversified portfolio.

Focus more on actively managed funds for potential higher returns.

Review and rebalance your portfolio regularly.

Continue with safe investments like PPF, SSY, and EPF.

Consider professional guidance for optimized investment strategies.

Stay focused on your goal of reaching Rs 10 crores.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 05, 2024

Money
Hi Dev.. I am 42 years old.. Have accumulated around 1.3 Crores as of today in MF(51.5 L), PPF/SSY (36 L) and EPF(46 L). Target is to reach around 10 crores in the next 13-15 years. I am a High Risk investor. I am investing in the below mutual funds for a minimum tenure of another 13 years.. UTI Nifty 50 Index (13k), Mirae Asset Large and Midcap (3k), UTI Nifty 200 Momentum 30 (18k), Quant Midcap (35k), Invesco India Midcap (35k) , Axis Small Cap (18k), Parag Parikh Flexicap (20k) and Quant Flexicap (20k) and Mirae Asset MidSmall400 Momentum Quality 100 ETF FoF (18k). Apart from this will continue investing in PPF (1.5 L yearly), Sukanya Samriddhi Yojana (1.5 L yearly) and EPF (3.4 L yearly). Am I aligned to reach the goal with the funds selected or any changes needs to be done. Pls. suggest.
Ans: You're doing a great job with your investments. At 42 years old, you've accumulated around Rs 1.3 crores in various investment avenues. That's commendable. You're on the right track towards your goal of Rs 10 crores in the next 13-15 years. Let’s analyze and evaluate your current investment strategy, its alignment with your goals, and potential areas of improvement.

Mutual Fund Investments: A Deep Dive
Overview and Assessment
You've diversified your mutual fund investments across various categories, which is a good strategy. Here's a closer look:

UTI Nifty 50 Index and UTI Nifty 200 Momentum 30: These funds focus on large-cap stocks and momentum strategies. While they offer stability, they might not match your high-risk appetite. Actively managed funds could provide better returns.

Mirae Asset Large and Midcap: This fund offers a balance between large and mid-cap stocks, providing a mix of stability and growth potential.

Quant Midcap and Invesco India Midcap: Midcap funds offer higher growth potential but come with increased volatility.

Axis Small Cap: Small-cap funds can offer high returns but are riskier. Given your high-risk tolerance, this fits well in your portfolio.

Parag Parikh Flexicap and Quant Flexicap: Flexicap funds provide the flexibility to invest across market capitalizations, which can be beneficial in changing market conditions.

Mirae Asset MidSmall400 Momentum Quality 100 ETF FoF: This fund focuses on momentum and quality factors, aligning with your aggressive investment style.

Analysis and Recommendations
Actively Managed Funds Over Index Funds

Your portfolio includes index funds like UTI Nifty 50 Index. Index funds track market indices, offering average market returns. Actively managed funds can potentially outperform index funds due to skilled fund management, especially in a high-risk strategy. Consider reallocating some investments from index funds to actively managed large-cap funds.

Risk and Reward Balance

You're heavily invested in midcap and small-cap funds, which aligns with your high-risk tolerance. However, ensure you're comfortable with the potential volatility. Maintaining a balance with some stable large-cap or balanced advantage funds could cushion against market downturns.

Regular Monitoring and Adjustments

It's essential to regularly review and adjust your portfolio based on market conditions and fund performance. Consider consulting a Certified Financial Planner (CFP) for personalized advice.

Power of Compounding and Long-Term Growth
Compounding: Your Best Ally
The power of compounding is your best ally in achieving your Rs 10 crore goal. Reinvesting earnings generates earnings on earnings, exponentially increasing your wealth over time. With a 13-15 year horizon, your investments have ample time to grow significantly through compounding.

Systematic Investment Plans (SIPs)
Your SIPs in mutual funds are a disciplined approach to investing, mitigating market volatility and averaging cost. Continue this strategy, as it leverages the power of compounding effectively.

Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY)
Stability and Tax Benefits
Your annual investments in PPF (Rs 1.5 lakh) and SSY (Rs 1.5 lakh) offer stability and tax benefits under Section 80C. These instruments provide guaranteed returns and are risk-free, balancing your high-risk mutual fund investments.

Employee Provident Fund (EPF)
Secure and Reliable
Your EPF contributions (Rs 3.4 lakh yearly) offer a secure, long-term saving avenue with tax benefits. The EPF is a cornerstone for retirement planning, providing a steady growth rate.

Evaluating Your Current Strategy
Alignment with Goals
Your current strategy is robust, focusing on a mix of high-risk, high-reward mutual funds and stable, tax-efficient instruments like PPF, SSY, and EPF. This diversified approach aligns well with your Rs 10 crore goal.

Potential Adjustments
Increase Allocation to Actively Managed Funds: Shift some investments from index funds to actively managed funds to potentially enhance returns.
Diversify Within High-Risk Funds: Ensure your high-risk mutual fund portfolio is diversified across various sectors to mitigate specific sector risks.
Regular Reviews: Conduct regular portfolio reviews and rebalancing to stay aligned with market conditions and personal goals.
Final Insights
Your proactive approach to financial planning is commendable. You've created a diversified portfolio with a mix of high-risk mutual funds and stable, tax-efficient investments. This strategy is well-aligned with your goal of accumulating Rs 10 crores in the next 13-15 years.

Consider the following:

Reallocate some investments from index funds to actively managed funds for potentially higher returns.
Maintain a balance between high-risk and stable investments to cushion against market volatility.
Regularly review and adjust your portfolio to stay on track with your goals.
Stay disciplined with your SIPs and leverage the power of compounding. Your commitment to a long-term investment horizon will pay off.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

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Ravi

Ravi Mittal  |431 Answers  |Ask -

Dating, Relationships Expert - Answered on Nov 22, 2024

Asked by Anonymous - Nov 22, 2024Hindi
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Relationship
A bit long story I'm 21 student preparing for medical competative entrance exam for past 3 years (21-24).2 year ago this phase I was in a long distance relationship for 4 months with a girl I met in my class .But it didn't last long due to the problems created due to distance as she couldn't understand myself and I couldn't understand herself.so there was a misunderstanding and I couldn't hold on as I was in heavy pressure by exams and financial problems.so I couldn't handle and I felt like too early and broke up with her by losing my mind.she was completely disappointed as I didn't speak to her for more than an year due to one more year preparation.i missed her very much but I didnt tell her.I missed govt seat in border mark and the same year she got into a relationship with another guy in her class.i don't blame her. But I feel like my entire life is shattered and I couldn't move on from that girl till now.I couldn't concentrate on my career too.im kind of person who is always confident in all aspects but I have totally lost my mind .I can see that in an danger situation as age is running and family pressure, everyone of my classmates are far ahead of me I couldn't withstand this situation and couldn't make proper decision in any aspect. Mam please help me out.
Ans: Dear Anonymous,
I understand your concerns. The first step is to focus on moving on; she has, and you should too. Prioritize your career, your family, and your future. Next, what has happened to your career progress has already happened. It's unfortunate, but there's no way to change that. But give yourself a second chance; work harder and achieve greater things than you even imagined before. Trust me, you are not the only person who is standing in a situation like this. Many have, and many more will. But the ones who have passed this time will give you the same advice that I did.

Best Wishes.

...Read more

Milind

Milind Vadjikar  |682 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 22, 2024

Asked by Anonymous - Nov 13, 2024Hindi
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Sir, I am 40yrs old. Having monthly takehome salary of 1.1 lakh and rental income of 36000. My investment are 2 flats worth of 1cr. 4 plots in Bhubaneswar worth of 2crs. EPF balance 50 lakh, LIC policies worth of 16 lakhs, NPS worth of 10 lakhs. My monthly saving commitments are - EPF (employee+employer) 28000 NPS 15000 MF 7500 Gold scheme 5000 Financial burden - HL emi of 24000 Monthly expanses 50000 I would like to retire at 50. Please advise for retirement plan with life expectancy of 80yrs.
Ans: Hello;

The value of your investments after 10 years;

A. EPF Corpus+Contribution: 1.6 Cr
B. NPS Corpus+Contribution: 53 L
C. MF(sip) + Gold(sip): 25 L
D. Real estate (land): 3.26 Cr

So sum of A, C & D gives us a corpus of 5.11 Cr

Since you will withdraw NPS before 60 age 80% of corpus will go into annuity while 20% will be available to you.

So you may expect monthly income of around 21 K from annuity(42.4 L).

Balance 10.6 L get added to 5.11L taking your total corpus to ~ 5.2 Cr.

If you invest 5 Cr in a conservative hybrid debt fund and do a SWP at the rate of 3%, you may expect a monthly income of around 1.1 L(post-tax).

Add your monthly rental income of 36 K(No growth factored) and annuity income of 21 K to this and you have total monthly income of 1.67 L after 10 years.

Your current monthly expenses of 50 K after 10 years would be around 90 K and 1.6 L after 20 years.

Considering return of around 7-7.5% from the conservative hybrid debt fund you will still generate inflation adjusted return at 3% SWP after 80 years of age.

Assumptions:
Inflation rate-6%
Return from EPF-8%
Return from NPS-9%
Return from MF-10%
Return from gold-7%
Return from Land-5%
Annuity rate-6%

The spare flat is not considered in this because it will continue to yield you rental income in retirement.

Since real estate(land) returns may fluctuate over 10 years suggest to increase MF sip(6X) as a back-up, also in this case you may decide to retain & invest in NPS upto 60 age.

Of course MF returns are also not assured but you are improving the odds by backing two appreciable assets(RE & equity) over long-term.

Happy Investing;
X: @mars_invest

...Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 22, 2024

Money
My age 62, male, getting rental income Rs. 90k nett. Already subscribing 12.5k in PPF for the past 2 1/2 years. No other investments. My target is 5 crores in 10 years. I already have Mediclaim Rs.50 lakhs for me & wife . Please advice me what to do.
Ans: Your current financial foundation is strong and shows promise:

A rental income of Rs. 90,000 per month provides consistent and predictable cash flow. This stability can serve as the backbone for your investment strategy.

PPF contributions of Rs. 12,500 per month for 2.5 years reflect disciplined saving. However, its returns may be insufficient to achieve a high-growth target like Rs. 5 crores in 10 years.

A robust Mediclaim policy of Rs. 50 lakhs for you and your wife ensures adequate health coverage. This safeguard allows you to focus on wealth-building without worrying about medical emergencies.

Despite these positive factors, achieving Rs. 5 crores in 10 years requires a carefully crafted and growth-oriented strategy.

Defining and Prioritising Your Financial Goals
Achieving Rs. 5 crores is ambitious yet achievable with a focused approach:

Define this target as your primary financial goal over the next decade.

Break it into manageable milestones: for example, Rs. 50 lakhs every 1-2 years in cumulative investments and growth.

Prioritise high-return investments that align with your risk tolerance and financial capacity.

Optimising Existing PPF Contributions
While PPF is a secure investment, its growth potential is limited:

Returns: PPF currently offers an interest rate of approximately 7-7.5%, which barely outpaces inflation.

Contribution Review: Consider capping your PPF contributions at Rs. 1.5 lakh annually (to utilise the Section 80C benefit). This ensures that excess funds are redirected to higher-return investments.

PPF can serve as a low-risk component of your portfolio but should not dominate your investment strategy.

Building a Diversified Investment Portfolio
A diversified portfolio will provide a balance of risk and reward. Include the following components:

1. Equity Mutual Funds for Growth
Equity mutual funds are essential for achieving high returns over the long term:

Large-Cap Funds: These invest in established companies and offer stability with moderate growth. They are ideal for a portion of your portfolio to reduce risk.

Multi-Cap or Flexi-Cap Funds: These provide exposure to companies of all sizes, offering growth and diversification.

Sectoral and Thematic Funds: Avoid these unless you have a high risk tolerance and understand market dynamics.

ELSS Funds: These not only provide tax savings under Section 80C but also deliver market-linked returns.

Why Avoid Index Funds?

Index funds may offer simplicity and lower expense ratios, but they lack flexibility. They cannot adapt to market conditions or capitalise on outperforming sectors. Actively managed funds, on the other hand, have the potential to outperform the market, especially in a developing economy like India.

Start with a Systematic Investment Plan (SIP) in selected funds to build wealth steadily.

2. Debt Mutual Funds for Stability
Debt funds add stability to your portfolio and reduce overall risk:

Choose funds with low credit risk and moderate duration to ensure safety and predictable returns.

Debt funds are suitable for short- to medium-term goals or as a fallback during market corrections.

Taxation Note: Both LTCG and STCG on debt funds are taxed as per your income tax slab. This should be factored into your planning.

3. Balanced Advantage Funds
Balanced advantage funds (BAFs) dynamically allocate assets between equity and debt. They:

Provide exposure to equity while minimising downside risk.

Offer a suitable option for someone nearing retirement but seeking growth.

4. Gold Investments for Diversification
Allocate a small portion (5-10%) of your portfolio to gold:

Gold serves as a hedge against inflation and currency depreciation.

Choose gold ETFs or sovereign gold bonds for ease of liquidity and better returns.

Emergency Fund Creation
Having an emergency fund is non-negotiable:

Maintain at least 6-12 months of expenses in liquid investments like liquid mutual funds or high-interest savings accounts.

This ensures liquidity for unforeseen events without disturbing your long-term investments.

Focus on Retirement Planning
At 62, balancing growth and safety becomes critical:

Estimate your monthly retirement expenses, considering inflation over the next 10-15 years.

Your target of Rs. 5 crores should primarily serve as your retirement corpus.

Allocate assets thoughtfully:

60-70% in equity funds for growth.
30-40% in debt funds for stability.
Periodically rebalance your portfolio to maintain this allocation.

Strategic Tax Planning
Tax efficiency can significantly impact your returns:

Continue using Section 80C to its full potential, including ELSS funds and PPF.

Consider the National Pension System (NPS) for an additional Rs. 50,000 deduction under Section 80CCD(1B).

Be mindful of the new taxation rules for mutual funds:

Equity Mutual Funds: LTCG above Rs. 1.25 lakh is taxed at 12.5%; STCG at 20%.
Debt Funds: LTCG and STCG are taxed as per your income slab.
Consult a Certified Financial Planner to optimise your tax strategy.

Regular Portfolio Monitoring and Rebalancing
Investing is not a one-time activity:

Review your portfolio every six months or annually to track performance.

Rebalance your asset allocation periodically to align with your financial goals and risk appetite.

Stay committed to SIPs even during market downturns, as this ensures cost-averaging.

Additional Suggestions
Avoid Over-Reliance on PPF
While PPF is safe, it is not sufficient for wealth creation. Shift excess contributions to equity-based investments for better returns.

Avoid Direct Stocks
Direct equity investing requires time, expertise, and constant monitoring. It carries higher risk and may lead to losses without proper research. Instead, rely on equity mutual funds managed by professionals.

Avoid Mixing Insurance and Investments
Do not invest in ULIPs or endowment plans, as they offer suboptimal returns. Stick to pure insurance products for protection and mutual funds for growth.

The Role of a Certified Financial Planner
To achieve Rs. 5 crores, a well-crafted financial plan is essential. A Certified Financial Planner (CFP) can:

Analyse your current investments and recommend improvements.

Design a customised strategy tailored to your income, expenses, and goals.

Provide periodic reviews to ensure you stay on track.

Finally
Achieving Rs. 5 crores in 10 years is a realistic goal if you adopt a disciplined and diversified approach.

Optimise your PPF contributions and channel excess funds into higher-growth investments.

Build a diversified portfolio with equity and debt mutual funds.

Include a small allocation to gold and maintain an emergency fund.

Stay consistent with your SIPs and review your investments regularly.

Work with a Certified Financial Planner to create a personalised roadmap.

By following these steps, you can secure your financial future and meet your goals.

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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