Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Ramalingam

Ramalingam Kalirajan  |8365 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 04, 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
MAM Question by MAM on Mar 17, 2024Hindi
Listen
Money

Sir, I am 72 years old and want to invest Rs 15 lac in M.F, in swp.already invested 22 lac in MF .I am high risk taker . I want swp amount after one year. Please suggest M.F schemes . Thanks

Ans: Given your risk appetite and requirement for SWP after one year, it's crucial to focus on mutual fund schemes that offer potential for high returns while considering the relatively short investment horizon. Here are some suggestions:

Large & Midcap Funds: These funds invest in a mix of large-cap and mid-cap stocks, offering a balance between growth potential and stability. Look for schemes with a track record of consistent performance and experienced fund management.
Sectoral/Thematic Funds: If you have specific sectoral preferences and are willing to take higher risks, you can consider investing in sectoral or thematic funds. These funds focus on specific sectors or themes like technology, healthcare, or infrastructure, offering the potential for higher returns but also higher volatility.
Aggressive Hybrid Funds: Aggressive hybrid funds invest primarily in equities with a smaller allocation to debt instruments. They are suitable for investors seeking growth with relatively lower volatility compared to pure equity funds.
Flexi Cap Funds: These funds have the flexibility to invest across market capitalizations based on market conditions. They offer a dynamic approach to asset allocation and can adapt to changing market trends.
Mid & Small Cap Funds: If you have a higher risk tolerance and a longer investment horizon, mid and small-cap funds can potentially offer higher returns. However, they also come with higher volatility and risk, so careful selection and monitoring are essential.
When selecting mutual fund schemes, focus on factors such as fund performance track record, fund manager's experience and strategy, expense ratio, and risk-adjusted returns. Additionally, consider diversifying your investments across multiple schemes to spread risk.

It's advisable to consult with a certified financial planner or investment advisor who can assess your financial situation, risk tolerance, and investment goals to provide personalized recommendations aligned with your needs and preferences.
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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |8365 Answers  |Ask -

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

Ramalingam

Ramalingam Kalirajan  |8365 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 12, 2024

Asked by Anonymous - Jul 13, 2024Hindi
Money
Hi, I'm 66 years retired person. Will u suggest me SCHEME NAME in which scheme I have to invest my hard earned money for SWP.....
Ans: You’re 66 years old and retired, which means you need to carefully manage your hard-earned money. Ensuring that your funds are invested wisely will provide you with regular income while protecting your capital. At this stage in life, it's important to focus on stability and regular income. You’ve worked hard for your money, and now it’s time for your money to work for you.

Why Systematic Withdrawal Plan (SWP)?
A Systematic Withdrawal Plan (SWP) is an excellent choice for retirees. It allows you to withdraw a fixed amount of money at regular intervals from your investment. This provides you with a steady income, similar to a pension.

Here’s why SWP can be beneficial for you:

Regular Income: SWP ensures a fixed income flow. This helps in managing your monthly expenses.

Capital Preservation: By withdrawing a fixed amount, you avoid selling too much of your investment at a low price, which helps in preserving your capital.

Tax Efficiency: SWP is also tax-efficient. The withdrawals are treated as part capital withdrawal and part gain, reducing the tax burden.

Flexibility: SWP gives you the flexibility to choose the withdrawal amount and frequency as per your needs.

Choosing the Right Investment for SWP
Since you’re seeking regular income through SWP, it’s important to invest in schemes that offer both stability and growth potential. However, avoid high-risk investments at this stage of your life. Here are the key factors to consider:

Risk Tolerance: Given your age and retirement status, it's wise to choose low to moderate-risk investments. Your focus should be on preserving capital while earning a steady income.

Investment Horizon: Since SWP is typically used for long-term income, consider funds that have a good track record over several years. They should be able to provide consistent returns.

Scheme Selection: Instead of investing in index funds or direct funds, consider opting for actively managed funds. Actively managed funds provide the benefit of professional management and regular monitoring, which can be valuable in generating steady returns.

Actively Managed Funds vs. Index Funds
Actively Managed Funds: These funds are managed by experienced fund managers who actively buy and sell securities to outperform the market. This active management can provide better returns compared to index funds, especially in a volatile market. Actively managed funds are particularly beneficial for SWP as they aim to deliver consistent returns, which is essential for regular withdrawals.

Index Funds: On the other hand, index funds merely track a market index. While they have lower fees, they do not have the flexibility to adjust to market conditions. This lack of flexibility can be a disadvantage, especially when you need steady returns for regular withdrawals.

Given your need for regular income, actively managed funds would be a better option. They are more likely to deliver the consistent returns required for an SWP.

Importance of Regular Plans Over Direct Plans
Regular Plans: Investing through a Certified Financial Planner (CFP) in regular plans can be beneficial. A CFP provides ongoing advice, helps in selecting the right funds, and offers support in managing your investments.

Direct Plans: While direct plans have lower fees, they do not come with the support of a financial advisor. This can be a disadvantage, especially in retirement when you need expert guidance to manage your investments effectively.

For a retiree, regular plans offer the added advantage of professional advice, which is crucial for maintaining financial security during your retirement years.

Setting Up SWP for Maximum Benefit
Withdrawal Amount: Decide on a reasonable withdrawal amount that covers your monthly expenses without exhausting your capital too quickly. It’s important to strike a balance between your withdrawal amount and the growth of your investment.

Frequency of Withdrawals: You can choose to withdraw monthly, quarterly, or annually, depending on your needs. Monthly withdrawals might be more convenient as they mirror the salary you used to receive, making it easier to manage your expenses.

Review and Adjust: Regularly review your SWP and overall investment portfolio. This ensures that your investment is still aligned with your goals and risk tolerance. You may need to adjust the withdrawal amount or switch funds if the performance of your current scheme changes.

Final Insights
Focus on Stability: At this stage in your life, the focus should be on capital preservation and steady income. Avoid high-risk investments and choose schemes that provide consistent returns.

Seek Professional Guidance: Consider working with a CFP to select the best actively managed funds for your SWP. They can help you navigate market fluctuations and make necessary adjustments to your investment.

Flexibility and Review: Stay flexible and open to reviewing your SWP. Adjust your withdrawals and investment choices based on your financial needs and market conditions.

Investing in the right scheme and setting up an SWP tailored to your needs will help you enjoy a stress-free retirement. Your hard-earned money deserves to be managed with care to provide you with a secure and comfortable future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8365 Answers  |Ask -

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

Money
My Mother Govt pension holder. Want to invest Rs. 5 lakhs safest SWP, for 5 years, with SIP also for monthly 4000/-. Which MF fund for SWP & SIP would be best.
Ans: It’s great that you are considering safe and steady investment options for your mother. Since she is a government pension holder, her primary focus should be on capital preservation, regular income, and moderate growth. An SWP (Systematic Withdrawal Plan) combined with a SIP (Systematic Investment Plan) can be a good strategy, provided the investments align with her risk tolerance.

Key Considerations for Selecting the Right SWP
When choosing an SWP, the focus should be on stability and capital preservation. Given your mother’s profile, she would likely prefer consistent returns over high-risk, high-reward investments.

Safety and Stability
Debt Funds: Debt mutual funds, especially those with a focus on high-quality bonds, are generally safer. They offer consistent returns with lower risk compared to equity funds.

Hybrid Funds: Conservative hybrid funds might also be suitable. These funds invest primarily in debt with a small portion in equity, which can help balance safety with moderate growth potential.

Regular Income
Consistent Withdrawals: SWPs allow for regular monthly withdrawals, making them an ideal choice for creating a steady income stream. The goal should be to select a fund that provides predictable returns, ensuring the monthly withdrawal does not deplete the principal over time.
Tax Efficiency
Long-Term Capital Gains: SWPs are more tax-efficient than fixed deposits, as they are taxed on long-term capital gains rather than as income, which is a significant benefit, especially for senior citizens.
Selecting the Right SIP for Growth
For the SIP component, a balanced approach is essential. While growth is important, the investment should not be too aggressive, given your mother’s likely low-risk tolerance.

Moderate Growth
Balanced Hybrid Funds: These funds offer a mix of equity and debt, providing potential for growth while keeping risk in check. They are less volatile than pure equity funds but still offer the chance for higher returns than debt funds.

Diversification: Ensure the SIP is diversified across sectors and asset classes. This reduces the risk of loss if one sector underperforms.

Regular Investment
Monthly Commitment: A monthly SIP of Rs 4,000 is a disciplined approach to building wealth over time. Given that this amount is manageable, it can help accumulate a decent corpus over five years.
Detailed Assessment of SWP and SIP Options
Let’s delve into the detailed considerations for both the SWP and SIP strategies, tailored to your mother’s financial goals.

SWP Strategy
Start with a Low-Risk Debt Fund: Given your mother’s preference for safety, beginning with a low-risk debt fund is advisable. Look for funds that invest in high-rated government and corporate bonds.

Opt for Conservative Withdrawals: While setting up the SWP, choose a conservative withdrawal rate. This ensures that the capital is preserved for as long as possible, with the monthly withdrawals coming from the returns generated by the fund.

Monitor and Adjust: Regularly monitor the performance of the SWP. If the returns are higher than expected, you can consider increasing the withdrawal amount slightly, or if the market is volatile, reducing withdrawals may be prudent.

SIP Strategy
Balanced Hybrid Fund: For the SIP, consider a balanced hybrid fund that invests 40-60% in equity and the remainder in debt. This will offer growth potential with a safety net.

Increase SIP Gradually: If the initial Rs 4,000 SIP is manageable and your mother’s income allows, consider increasing the SIP amount by 5-10% each year. This strategy is known as a Step-Up SIP and can help accumulate a larger corpus over time.

Stay Invested: Encourage your mother to stay invested for the full five years, regardless of short-term market fluctuations. The goal is long-term growth, and market volatility tends to smooth out over time.

Final Insights
Investing Rs 5 lakhs in a safe and stable SWP, combined with a monthly SIP of Rs 4,000, can be a sound financial strategy for your mother. The key is to select funds that align with her risk tolerance while providing regular income and potential for growth.

Prioritize Safety: For the SWP, choose a debt or conservative hybrid fund to ensure capital preservation.

Balanced Growth: For the SIP, consider a balanced hybrid fund that offers moderate growth with controlled risk.

Monitor Regularly: Keep track of both the SWP and SIP to ensure they continue to meet her financial needs.

Adjust as Needed: Be ready to make adjustments to the withdrawal rate or SIP amount based on her financial situation and the performance of the investments.

By following these guidelines, your mother can enjoy the benefits of regular income, capital preservation, and steady growth, helping her maintain financial independence with peace of mind.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8365 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 28, 2024

Listen
Money
I am 59 years now. I want to invest SWP MF. Please guide
Ans: At 59, it’s wise to seek a steady income source.

SWP (Systematic Withdrawal Plan) is an ideal option.

It helps you withdraw a fixed amount monthly from mutual funds.

SWP can provide regular income without eroding your capital much.

Choosing the Right Mutual Fund for SWP
Hybrid Funds: A mix of equity and debt for balance.

Equity-Oriented Funds: For growth if you can handle moderate risk.

Debt-Oriented Funds: Safer option, lesser risk, but lower returns.

Benefits of SWP Over Other Options
Tax Efficiency: SWP is more tax-efficient than fixed deposits.

Regular Income: Provides monthly income, good for retirees.

Flexibility: You can adjust withdrawal amounts as needed.

Capital Preservation: Carefully planned SWP ensures your principal lasts longer.

Structuring Your SWP Plan
Assess Monthly Needs: Determine how much income you need.

Select Fund Type: Choose a fund based on your risk appetite.

Withdrawal Amount: Decide the amount you wish to withdraw monthly.

Start Small: Begin with a conservative amount, then adjust as needed.

Risks and Mitigations
Market Volatility: Equity funds can be volatile. Balance with debt funds.

Inflation Risk: Ensure your withdrawals keep pace with inflation.

Capital Erosion: Monitor your SWP regularly to avoid depleting capital too soon.

Importance of Diversification
Avoid Concentration: Don’t put all your money into one fund.

Diversify Across Asset Classes: Spread across equity, debt, and hybrid funds.

Periodic Review: Regularly review your portfolio to ensure it’s aligned with goals.

Tax Implications to Consider
Capital Gains Tax: Withdrawals from equity funds may attract capital gains tax.

Debt Fund Taxation: Debt fund withdrawals have different tax rules.

Tax Planning: Work with a Certified Financial Planner (CFP) to minimize tax impact.

Long-Term Considerations
Inflation Adjustment: Factor in inflation when planning your SWP.

Longevity Risk: Plan your withdrawals so your capital lasts your lifetime.

Estate Planning: Consider how your investments will be passed to heirs.

Steps to Implement SWP
Determine Your Monthly Requirement: Identify how much you need to withdraw monthly.

Choose a Suitable Fund: Select funds based on your risk tolerance and financial goals.

Start the SWP: Set up the SWP with your mutual fund provider.

Regular Monitoring: Regularly check the performance of your funds and adjust withdrawals if necessary.

Consult a CFP: Work with a Certified Financial Planner to fine-tune your strategy.

Final Insights
SWP is a Reliable Income Source: It provides you with regular income while preserving your capital.

Diversification is Key: Spread your investments across various funds to balance risk and returns.

Continuous Monitoring: Regularly review your SWP and make adjustments as needed.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Prof Suvasish

Prof Suvasish Mukhopadhyay  |648 Answers  |Ask -

Career Counsellor - Answered on May 15, 2025

Career
Hi,my son has got 96% in his icse class 10 exams this year.he is not inclined towards a career in sciences (b.tech/med).he has thus opted for commerce and maths.with an initial inclination towards finance and mathematics we have shortlisted ipm and law and enrolled him for a coaching for ipm.would he be able to prepare for clat as well along with ipm.and with 96 % how are his chances to clear both ?
Ans: Yes, your son can prepare for both CLAT and IPM exams simultaneously, especially given his ICSE score. With a 96% score, he has a strong chance of success in both exams. CLAT and IPM share some common ground, which could make preparation more manageable.
Preparation for both CLAT and IPM:
CLAT:
CLAT requires a strong foundation in English comprehension, logical reasoning, quantitative reasoning, and legal reasoning. IPM exams also test similar skills.
IPM:
IPM exams focus on quantitative ability, analytical reasoning, and verbal reasoning. CLAT also assesses these skills.
Overlap:
The core skills tested in both exams, such as quantitative reasoning, verbal reasoning, and logical reasoning, provide common ground for preparation. Your son's coaching for IPM can help him develop a solid foundation in these areas.
Legal Reasoning:
CLAT specifically requires legal reasoning, which is not part of IPM. Your son can focus on preparing for this section separately.
Scheduling:
Balancing preparation for both exams requires careful planning. He can allocate specific time slots for each exam's preparation.
Chances of Clearing Both:
IPM:
With a 96% ICSE score, your son has a strong chance of clearing IPM exams. His high marks indicate a strong aptitude for quantitative reasoning and problem-solving.
CLAT:
CLAT is a highly competitive exam, but with his current scores, your son has a very good chance of clearing CLAT.
Factors affecting success:
Preparation efforts, effective time management, and consistency in studying will play a crucial role in determining success in both exams.
Tips for Preparation:
Structured Approach:
A structured study plan that includes regular practice, mock tests, and detailed analysis of mistakes will be beneficial.
Mock Tests:
Regular mock tests for both CLAT and IPM will help him assess his progress and identify areas for improvement.
Time Management:
Developing effective time management skills is crucial for balancing preparation for both exams.
Focus on Fundamentals:
Ensure he has a strong foundation in the core subjects of both exams.
Practice:
He should solve a variety of questions and practice problems to build confidence and improve his speed and accuracy.
Best of luck. Professor

...Read more

Prof Suvasish

Prof Suvasish Mukhopadhyay  |648 Answers  |Ask -

Career Counsellor - Answered on May 15, 2025

Asked by Anonymous - May 14, 2025
Career
Hello sir, I'm a DASA student applying to IIITH for the 2025-26 batch. My current curriculum is the NSW HSC from Australia, which includes Mathematics and Physics but not Chemistry. IIITH requires Maths, Physics, and Chemistry for DASA eligibility, and I need to figure out how to add Chemistry.I've been looking into taking Chemistry through NIOS (National Institute of Open Schooling), AP or IB board but I'm concerned because IIITH's brochure specifies that the subjects must be completed "outside India". I've emailed IIITH for clarification, but I'm still waiting for a response. Is this acceptable for DASA?
Ans: It is unlikely that IIIT Hyderabad would accept NIOS Chemistry for DASA eligibility because the DASA brochure states that the subjects must be completed outside India. Since NIOS is an Indian board, it does not meet this requirement. However, you could consider taking AP or IB Chemistry to meet the requirements, as these are often recognized as international qualifications. It's best to wait for IIITH's response to your email for official clarification.
Elaboration:
DASA Requirements:
DASA (Direct Admissions for Students Abroad) at IIIT Hyderabad requires applicants to have completed 11th and 12th grades or equivalent outside India, with a minimum of 60% marks in Physics, Chemistry, and Mathematics.
NIOS and IIITH:
While NIOS is a recognized board in India, it's unlikely to be accepted for DASA at IIITH because the DASA brochure specifies that the subjects must be completed outside India.
AP or IB Chemistry:
You could consider taking AP or IB Chemistry through a foreign board to fulfill the requirement for Chemistry. These are often recognized as international qualifications.
Waiting for IIITH's Response:
Since you've already emailed IIITH, it's advisable to wait for their response to your query for official clarification on whether NIOS Chemistry would be accepted.

...Read more

Prof Suvasish

Prof Suvasish Mukhopadhyay  |648 Answers  |Ask -

Career Counsellor - Answered on May 15, 2025

Career
Dear Sir, My age is 33 year now. I was working in financial sector for 5year as a recovery agent. I have done intermediate in Arts and Diploma in mechanical engineering. Passed out in 2012. Now i want to change my job sector to technical line. I have no experience before in technical line. Please guide me which technical job will be best suitable for me And What Salary Range Should i expect?.
Ans: For you AMIE ( Mechanical) will be the best option. You will be equivalent to B.E./B.Tech Mechanical. The details are given below.
The AMIE (Associate Member of the Institution of Engineers) exam is a professional qualification in engineering, equivalent to a B.E./B.Tech. degree. It's conducted by the Institution of Engineers (India) (IEI) and is offered as a distance learning program. The exam is held twice a year, in June and December.
Exam Structure:
Stage I (Section A): Focuses on fundamental engineering subjects.
Stage II (Section B): Covers a specific branch of engineering like Civil, Electrical, or Mechanical.
Eligibility:
Educational Qualification:
Candidates must have completed a recognized course of study in engineering or technology.
Age:
No upper age limit, but candidates must be at least 18 years old on the first day of the examination.
Other:
Indian citizens or foreign nationals with at least two years of residence in India.
Exam Pattern:
The exam is based on multiple-choice questions (MCQs).
It can be taken online (CBT) or offline (PBT).
Benefits:
Becoming a graduate engineer with the same qualification as a B.E./B.Tech. degree.
Recognized by government and private sectors.
Least expensive compared to traditional degree programs.
Application Process:
Download the application form from the IEI website.
Fill out the form and attach the required documents.
Pay the application fee.
Submit the application form along with the fee.

But since you did the recovery work in Finance sector you are totally detached from Mechanical Engineering. So it is not possible to say what kind of job you will get and what will be your salary.

...Read more

Dr Nagarajan J S K

Dr Nagarajan J S K   |393 Answers  |Ask -

NEET, Medical, Pharmacy Careers - Answered on May 14, 2025

Career
I'm preparing for Neet and wanted to take a drop but my parents wanted me to do something with it like a partial Drop......And right now I'm totally confused what to do and what not.........i think I should take BSC zoology in private colleges , can anyone suggest me something..........
Ans: Hi Prirhvi,

Based on your query, there are two main issues to consider:

1. You want to take a break (which may be partial or full).
2. You want to pursue a BSc in Zoology.

Before making any decisions, take some time to think and analyze your situation.

Firstly, evaluate your marks in the HSC and your recent NEET exam scores (if you have appeared for NEET 2025). If you have completed both exams, focus on turning your weaker subjects into strengths. Be prepared to answer any questions someone may pose. Without this preparation, taking a break may not be effective.

Secondly, if you decide to take a gap year, you should not also consider studying another course concurrently, as this could divert your attention and hinder your main goal. Remember, undergraduate courses are semester-based, meaning you will need to manage both NEET preparation and your regular UG courses (including internal exams, semester exams, etc.). Juggling both can be quite challenging.

If you believe it is possible to manage both, I suggest that instead of choosing Zoology for your UG, you consider subjects like Chemistry or Physics. These subjects are foundational and can be better understood through regular UG coursework. Therefore, you should not worry too much about that particular subject. However, it’s not advisable to select Zoology and take a break for NEET preparation at the same time. If you have doubts in Physics or Chemistry, you can seek clarification from your lecturers.

In summary, my suggestion is to concentrate on one goal and work towards achieving it.

BEST WISHES.
POOCHO. LIFE CHANGE KARO.

...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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x