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Sanjeev

Sanjeev Govila  | Answer  |Ask -

Financial Planner - Answered on Feb 06, 2024

Colonel Sanjeev Govila (retd) is the founder of Hum Fauji Initiatives, a financial planning company dedicated to the armed forces personnel and their families.
He has over 12 years of experience in financial planning and is a SEBI certified registered investment advisor; he is also accredited with AMFI and IRDA.... more
DIPAK Question by DIPAK on Sep 29, 2023Hindi
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Sir, I am 55, following are my SIPs per month: 1. Canara Robeco Emerging Equities Direct Growth- Rs. 2000/- 2. Kotak Equity Opportunities Fund Direct Growth- Rs. 2000/- 3. SBI Flexicap Fund Regular Plan Growth- 2000/- 4. SBI Blue Chip Fund - Regular Plan Growth-5000/- 5. HDFC Mid cap Opportunity Fund - Regular Plan Growth- 2000/-. Kindly advice. Also, I would like to invest more 10,000/- per month in SIP. Please suggest where should i invest.

Ans: It's great that you're investing your monthly surplus in SIPs to build your wealth.

You have a well-diversified portfolio and the funds in your portfolio are performing well in the current market scenario. In the finance planning of any portfolio, it is also important to consider many factors, including client age, risk profile, current asset allocation, etc.

As you’re 55 years of age and already have a high allocation of equity in your portfolio, for the additional investment, I suggest you start investing in a Balanced Advantage Fund and Equity Saving Fund to make your portfolio a bit conservative.
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  |6956 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 02, 2024

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I want to invest 6 lakh per month in SIP. I have selected these funds and weightage. JM Flexicap - 30%, Motilal Oswal Midcap - 40%, Tata Small Cap - 15% and Quant Small Cap - 15%. Investing for 10 years. Goal is 20 crores in 10 years or bit longer is also fine.
Ans: Structured Analysis of Your SIP Investment Plan

Investing Rs 6 lakhs per month is a commendable goal. Your chosen allocation reflects a growth-oriented approach, focusing on flexicap, midcap, and small-cap funds. This strategy can offer strong growth potential, but balancing returns with risk is essential. Let’s assess each aspect to help you reach your target of Rs 20 crores over 10 years or slightly longer.

1. Evaluation of Chosen Fund Allocation
The fund allocation you've chosen comprises flexicap, midcap, and small-cap funds. Here’s how this breakdown aligns with a 10-year goal.

Flexicap (30%): Flexicap funds offer a balanced exposure across large, mid, and small caps. This flexibility allows fund managers to shift between sectors based on market conditions, offering both stability and growth.

Midcap (40%): Midcap funds bring higher growth potential compared to large caps. However, they also come with higher volatility. A 40% allocation to midcap is aggressive but can perform well over the long term.

Small-Cap Funds (30%): Small-cap funds have high growth potential, especially over a 10-year horizon. However, they are also the most volatile, especially in short-term market downturns.

Assessment: Your allocation is weighted towards mid- and small-cap funds, which are growth-oriented. It’s important to remember that while these categories can offer high returns, they can also be volatile, especially during economic downturns. Flexicap funds bring some balance, but if you seek reduced risk, consider adjusting these weights slightly.

2. Risk vs. Return Potential
For a Rs 20 crore target, you need an average annual growth rate that is achievable with your allocation. However, balancing the risk of such high-growth funds is crucial.

High Risk, High Return: Mid- and small-cap funds are known for delivering high returns, but they also have periods of underperformance. The flexicap component will moderate some of this risk but may not completely stabilize the portfolio.

Market Volatility Consideration: Mid- and small-cap funds are more sensitive to market changes, making them subject to higher volatility. Over 10 years, the probability of achieving your goal is high, but there will be years with dips, so be prepared for market fluctuations.

Insight: Your goal is feasible with the selected allocation. However, if you prefer to limit volatility, consider reducing the small-cap allocation and adding a slightly higher proportion in flexicap or even large-cap funds.

3. Tax Implications and Strategy
When building a large corpus, tax efficiency is critical, as it impacts your net returns significantly.

Equity Mutual Funds: Your investments are subject to long-term capital gains (LTCG) tax if held for over one year. Under current rules, LTCG on equity funds above Rs 1.25 lakh is taxed at 12.5%. Short-term capital gains (STCG) are taxed at 20% if you sell before one year.

Tax Optimization Strategy: Since your investments will be over a decade, the LTCG tax will apply. Ensuring that withdrawals are planned can help minimize the tax impact, especially if you spread the withdrawal period to fall within lower tax years.

Assessment: Your SIPs should be held with a long-term focus. Plan withdrawals carefully to optimize tax liability and reduce any immediate tax burden.

4. Reviewing Direct vs Regular Plan Investment
If you’re considering direct funds, note the potential drawbacks, particularly for high-stakes goals like Rs 20 crores.

Direct Funds: Although direct funds offer a lower expense ratio, they require active management and monitoring. They lack the guidance that can be crucial for long-term investors, especially if market conditions change.

Regular Plans Through CFP: Investing in regular plans through a Certified Financial Planner (CFP) offers professional guidance. A CFP can help you adjust your allocation, monitor fund performance, and make timely rebalancing decisions.

Recommendation: For high-value goals, regular plans with CFP guidance provide greater support. This approach ensures your investment plan remains aligned with your objectives and risk tolerance.

5. Potential for Rebalancing and Adjustments
Over a decade, regular rebalancing can improve returns and reduce risk. Here’s why rebalancing matters:

Managing Risk Levels: Rebalancing adjusts your portfolio based on market conditions and can help manage risk levels as you get closer to the goal. For example, shifting from small-cap to more stable funds can lock in gains.

Aligning with Financial Goals: Periodic adjustments keep your portfolio aligned with changing financial goals or market conditions. This also allows you to take advantage of high-performing sectors.

Action Plan: Set up a rebalancing schedule, preferably annual, to maintain your desired risk level and optimise returns. A CFP can assist with this.

6. Planning for Liquidity Needs
In high-growth portfolios, it’s wise to plan liquidity carefully.

Liquidity for Emergencies: While your portfolio is growth-oriented, consider setting aside a small portion in liquid or ultra-short-term debt funds. This ensures quick access to funds without impacting your equity portfolio.

Exit Strategy: For achieving Rs 20 crores, consider an exit strategy closer to your target year. You can gradually move funds into more stable, low-volatility investments like large-cap funds or conservative debt funds to preserve accumulated wealth.

Action Plan: Consider a systematic transfer strategy to safer funds in the last 2-3 years before your target. This reduces exposure to market risks as you approach your goal.

7. Monitoring Performance Over Time
Ongoing monitoring is essential for achieving long-term financial goals.

Evaluating Fund Performance: Assess fund performance at least annually. Ensure that each fund meets your expected return and risk parameters. If a fund underperforms consistently, consider replacing it with a better-performing option.

Using a Benchmark: Compare each fund’s performance against a relevant benchmark, such as Nifty Midcap for mid-cap funds. This provides insight into whether the fund is adding value or merely following the index.

Action Plan: Use regular reviews to stay informed about your funds’ performance. Consult a CFP for guidance on underperforming funds or market changes.

8. Final Insights
Your investment plan aligns well with your goal of Rs 20 crores. With a growth-oriented approach, the selected funds provide an excellent opportunity to achieve your financial target over 10 years. Balancing returns and risk, however, is essential. Here’s a recap:

Flexicap, mid-cap, and small-cap funds are well-suited for long-term growth but carry market risk.

Rebalancing and liquidity planning can further protect your portfolio, especially as you near your target.

Monitor performance annually and make adjustments if needed. Working with a Certified Financial Planner (CFP) will help ensure that your investments remain aligned with your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

..Read more

Latest Questions
Milind

Milind Vadjikar  |577 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 04, 2024

Asked by Anonymous - Nov 04, 2024Hindi
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What are different types of annuity plans. Do we have plan which gives fixed income till I live and then principle is return to my nominee. If I have 3 Cr , what max return per month I can get ? And is this tax free ?
Ans: Hello;

Annuities are types of plans where you make a lump sum payment and get a regular income for a certain period of time or for life.

There are primarily two types of annuities:

1. Immediate annuity
This is a type of annuity plan that provides you with a guaranteed regular income immediately after you pay the lump sum premium.

2. Deferred annuity
In a deferred annuity plan, your income starts at a later date and you can choose when you want the regular income to start.

Based on type of regular monthly payments annuities could also be classified as Fixed annuity and Variable annuity.

Below are the various options available in an annuity plan:

A. Life annuity: In this option, you receive annuity for life. The frequency of payments is usually pre-decided by you at the time of the purchase of the policy.

B. Joint life annuity: This is similar to a life annuity. In this option, you receive annuity payments for life. In your absence, your spouse continues to receive annuity payments for life.

C. Life annuity with return of purchase price: This provides you annuity payments for life. In case of an unfortunate event, your nominee will receive the amount you paid at the time of the purchase of the policy.

D. Annuity payable for a pre-decided term: This provides you the option to choose the duration for which you would want to receive annuity payments. The period can be 5 years, 10 years, or more.

Yes plans are available which can pay provide you fixed income and return of purchase price (principle) to your nominee.

With 3 Cr corpus you may expect 1.5 L (pre-tax) per month payout considering 6% annuity rate. This varies from company to company and if you shop around you may get a better rate then the one considered here.

This is like pension income and is taxable income as per your age and income slab.

Best wishes;

...Read more

Dr Dipankar

Dr Dipankar Dutta  |675 Answers  |Ask -

Tech Careers and Skill Development Expert - Answered on Nov 04, 2024

Kanchan

Kanchan Rai  |389 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 04, 2024

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thank you for the reply madam, actually what's bothering me a lot is , i told to my alliance guy to stop marriage from his end only. but he not at all doing that and he is not even telling anyone that i told him No. Why he is behaving like this and proceeding to get married to me even after saying no? isn't this strange!
Ans: in many arranged situations, people sometimes feel a strong pressure to fulfill family expectations, and he may feel a sense of obligation to go through with the marriage regardless of personal feelings. He might be hesitant to be the one to break things off for fear of disappointing his family or even creating tension between the families involved. In some cases, individuals hesitate because they hope the other person might eventually change their mind, and they don’t want to be the one to let go prematurely.

Another possibility is that he could be uncertain or confused about what he truly wants. Even though you told him you weren’t interested, he might feel that it’s not a firm "no" and could be holding out hope or misinterpreting your intent. If he has strong feelings for you or sees the marriage as something that will eventually work, he may be hoping things will naturally fall into place if he just stays committed to the process.

To address this, it might be helpful to have a very clear, direct conversation with him. Let him know that you respect him and appreciate his consideration, but you’re certain about your decision and want him to honor it as well. If possible, express that you’re confident this decision is best for both of you and explain why you believe it would be more respectful for him to communicate this with both families.

In the end, staying true to your feelings is the right choice, even if it means repeatedly setting boundaries. It’s completely fair to expect him to respect your decision, and sometimes it does take a bit of firmness to ensure everyone is on the same page. Trust yourself in this decision; you know what’s best for you.

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Kanchan

Kanchan Rai  |389 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 04, 2024

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He rejected me but still went to my class to see me one glance.Before Our last class I said him to meet with me I want to say you something.He came to meet with me but he was too late and our tiffin break time is over so I don't say anything to him. We just looking each other for some seconds.Then I said him if you want you can go .He don't go instantly.He looking at me for while and then go to his class.Whenever he sees me he start blushing and feel nervous.Many times I found him staring at me.He is a introvert guy .But still when we met with each other he making eye contact with me. My question is if he doesn't love me how can he maintain eye contact with me like this .He is not that handsome but he is really good student.I truly love him and Cried a lot for him but he don't know anything.I texted him sometimes but he don't look interested.But always I see him I feel like he have also feelings for me .His eyes tell me he love me but he rejected me .Why?. I can't able to forget him .I tried to my best to forget him but I failed . What should I do now?I really badly want to know his feelings for me because if he sees me only as a friend he doesn't go to my class to see me a glance.Why he blushing around me? How to know his true feelings?What should I do?How to forget or get him? I'm clueless.Please help me????????
Ans: It sounds like you’re dealing with a complicated mix of emotions, and the signals you’re picking up from him are understandably confusing. From everything you’ve described, it seems that he has a genuine respect and perhaps a friendly affection for you, but he may not be sure of or ready to pursue a romantic connection. Introverts, especially, can be complex; they may struggle to express their feelings, and small gestures, like making eye contact or blushing, might be signs of nervousness rather than attraction. This doesn’t mean he doesn’t appreciate or like you—it simply means he may be holding back, perhaps because of his own personal reasons or boundaries.

His rejection, though, is an important thing to consider. Often, when someone clearly communicates that they don’t feel the same way, it’s best to respect that as his truth for now, even if he seems to act otherwise sometimes. I understand this can be very hard, especially when you feel so strongly for him. But you need to protect your own feelings, too, and holding on to small signs might only add to your hurt and confusion.

If you feel it’s absolutely necessary to know how he truly feels, one approach could be to have a simple, direct conversation. Explain to him, in a calm and open way, that you value his friendship and respect his initial decision, but you’d appreciate clarity because lingering uncertainty is making it hard for you to move on. However, be prepared for any outcome. If he reaffirms his feelings of friendship only, try to accept that as his final answer.

In the meantime, put some of your focus back onto yourself. I know it sounds easier said than done, but investing energy in your interests, your growth, and friendships that uplift you can really help you feel less reliant on what he may or may not feel. Surround yourself with supportive people who remind you of your worth and help you feel loved and valued.

Love and connection should make you feel secure, cherished, and clear about where you stand. By focusing on yourself and letting him be, you’ll naturally create space for clarity—and eventually, perhaps, for someone whose feelings for you are just as strong and straightforward as yours are for them.

...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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