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Vivek

Vivek Lala  | Answer  |Ask -

Tax, MF Expert - Answered on Aug 19, 2023

Vivek Lala has been working as a tax planner since 2018. His expertise lies in making personalised tax budgets and tax forecasts for individuals. As a tax advisor, he takes pride in simplifying tax complications for his clients using simple, easy-to-understand language.
Lala cleared his chartered accountancy exam in 2018 and completed his articleship with Chaturvedi and Shah. ... more
PARAMVIR Question by PARAMVIR on Aug 11, 2023Hindi
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Dear Sir, how to exit mutual fund investment

Ans: Hello, you can ask your advisor to sell if for you
If the investment is direct , you can go to the AMC's website create an account and then sell it from there
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  |8284 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 04, 2024

Asked by Anonymous - Jan 25, 2024Hindi
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When to exit a mutual fund?
Ans: Deciding when to exit a mutual fund depends on several factors, including your investment goals, the fund's performance, changes in your financial situation, and market conditions. Here are some situations when it might be appropriate to consider exiting a mutual fund:

Achievement of Financial Goals: If you've achieved your investment objectives or reached a milestone, such as funding a specific goal like buying a house or funding education, it may be a good time to exit the fund.

Poor Performance: If the mutual fund consistently underperforms its benchmark or peers over an extended period, it could be a sign to reconsider your investment and exit the fund.

Fund Manager Changes: A change in the fund manager or significant changes to the fund's investment strategy or objectives may warrant a review of your investment. If you're uncomfortable with the new management or strategy, exiting the fund might be appropriate.

Rebalancing: Periodically rebalancing your investment portfolio to maintain your desired asset allocation is essential. If the mutual fund's performance has skewed your asset allocation, consider selling some holdings to rebalance your portfolio.

Life Changes: Changes in your life circumstances, such as job changes, marriage, divorce, or retirement, may necessitate a review of your investments. You may need to adjust your investment strategy to align with your new goals and risk tolerance.

Fund Expenses: If the mutual fund's expenses increase significantly without a corresponding improvement in performance, it may erode your returns over time. In such cases, consider exiting the fund in favor of lower-cost alternatives.

Market Conditions: During extreme market volatility or significant changes in economic conditions, it's essential to reassess your investments. If the market outlook or risk factors have changed substantially, it may be prudent to exit or reallocate your investments accordingly.

Remember, it's essential to evaluate your investment decisions carefully and consider consulting with a financial advisor before making any significant changes to your portfolio. Exiting a mutual fund should align with your long-term financial goals and be part of a well-thought-out investment strategy.

..Read more

Ramalingam

Ramalingam Kalirajan  |8284 Answers  |Ask -

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

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Thanks sir.Another question If I need to stop any fund should I do this after 1 year to mitigate exit load and short term tax this to be done every time if I invested in certain fund and finding it is not beating it's benchmark for past 6 mins.
Ans: Understanding Fund Performance and Investment Adjustments
Making informed decisions about stopping or switching funds is crucial. If a fund isn't meeting your expectations, it’s important to understand the implications of exit loads and short-term taxes.

Evaluating Fund Performance
Regularly reviewing your fund’s performance is essential. If your investment isn't beating its benchmark for the past six months, it might be concerning. However, short-term underperformance doesn’t always mean the fund is bad.

Mitigating Exit Load and Short-Term Tax
Most funds charge an exit load if you withdraw your investment within a certain period, typically one year. Additionally, short-term capital gains tax applies if you sell your investment within three years for debt funds or one year for equity funds.

Strategy for Exiting Underperforming Funds
If you find a fund underperforming, consider waiting until you’ve held the fund for over a year. This approach helps avoid exit load and reduces tax liability.

The Role of a Certified Financial Planner (CFP)
Instead of managing investments yourself, consult a CFP. They can guide you in selecting the right funds and adjusting your portfolio as needed.

Disadvantages of DIY Investing
DIY investing can be challenging without professional guidance. Selecting funds, timing the market, and managing risks require expertise. A CFP can help you avoid common pitfalls.

Benefits of Professional Management
Investing through a CFP or Mutual Fund Distributor (MFD) ensures you get expert advice. They monitor fund performance, make necessary adjustments, and ensure your portfolio aligns with your goals.

Actively Managed Funds and Performance
Actively managed funds can potentially outperform benchmarks. Professional fund managers make strategic decisions to adapt to market conditions. They aim to achieve better returns compared to passive index funds.

Diversification and Risk Management
Diversification reduces risk by spreading investments across various asset classes. A well-diversified portfolio balances potential returns with manageable risk. Actively managed funds often include a mix of assets, enhancing diversification.

Emotional Discipline and Long-Term Perspective
Investing requires patience and emotional discipline. Avoid making impulsive decisions based on short-term performance. Maintain a long-term perspective and trust your financial plan.

Regular Monitoring and Adjustments
Regularly review your investment portfolio with your CFP. Market conditions and personal circumstances change over time. Your CFP can help adjust your strategy to stay aligned with your financial goals.

Financial Education and Empowerment
Educate yourself about investing principles and strategies. Financial literacy empowers you to make informed decisions. Stay confident in your investment choices with a strong knowledge base.

Conclusion
If you need to stop an underperforming fund, consider doing so after one year to avoid exit load and short-term tax. Consulting a CFP can help you choose the right funds and avoid the pitfalls of DIY investing. Stay disciplined, maintain a long-term perspective, and regularly review your investments for optimal performance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8284 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jun 29, 2024Hindi
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Sir, I am holding nearly 25 lakhs for an investment of 10lakhs in different mutual funds. I want to exit from some of the funds like UTI NIFTY 500 VALUE 50 INDEX FUND Regular The return on this fund is nearly hundred percent. Iam 78 years old. Wherever I have more than fifty percent return I would like to invest MIP OF POST OFFICE OR KISAAN VIKASH PATRAor SENIOR CITIZENS SCHEME.Only the profit part. Principal l will continue. Should I wait till the budget of act.Should linvst that amount in top 50 NSE.stocs. kindly treat the matter as urgent.
Ans: It's wise to exit funds like UTI NIFTY 500 VALUE 50 INDEX FUND with 100% returns. Shifting profits to safer options is a good move at your age. Let's evaluate suitable investment options.

Considering Safe Investment Options
Investing in MIP of Post Office, Kisan Vikas Patra, or Senior Citizens Scheme ensures safety. These options offer steady returns and low risk. They are ideal for preserving capital and generating regular income.

Importance of Certified Financial Planner
Consulting a CFP can provide tailored advice. They help assess your risk tolerance and financial goals. This ensures your investments align with your needs.

Evaluating Top 50 NSE Stocks
Investing in top 50 NSE stocks can offer growth potential. However, it carries higher risk compared to fixed income schemes. Given your age, balancing risk and safety is crucial.

Timing and Budget Considerations
Waiting until the budget can offer insights into tax benefits or new schemes. However, market conditions can change. Consult a CFP to decide the best time to invest based on your financial goals.

Benefits of Actively Managed Funds
Instead of index funds, consider actively managed funds. They offer professional management and can adapt to market changes. This can lead to better returns and risk management.

Evaluating All Financial Aspects
Review your entire financial situation before deciding. Consider your expenses, other investments, and risk tolerance. Diversifying your portfolio ensures stability and growth.

Final Insights
Exiting high-return mutual funds and investing in safer options is prudent. Consider MIP, Kisan Vikas Patra, or Senior Citizens Scheme for safety. Consult a CFP for personalized advice and balanced investment strategies.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Nayagam P

Nayagam P P  |4453 Answers  |Ask -

Career Counsellor - Answered on Apr 23, 2025

Asked by Anonymous - Apr 23, 2025
Career
My daughter 90percentile in jee mains 2025,and puc board exam 95.6 percentage and kcet is 101 marks we are obc ncl and catgory 1 reservation can we get nit surathkal college for admission or other top 3 college in bangalore and she want to take jee advance 2025 , which branchas scope and high package
Ans: As far as KCET is concerned,? here are the some approximate expected KCET opening and closing ranks for the OBC-NCL category across four top engineering colleges in Bengaluru:?

RV College of Engineering (RVCE)
Computer Science & Engineering: Opening – 2,000 | Closing – 3,000
Electronics & Communication Engineering: Opening – 2,500 | Closing – 3,500
Electrical & Electronics Engineering: Opening – 3,000 | Closing – 4,500
Mechanical Engineering: Opening – 4,000 | Closing – 6,000
Civil Engineering: Opening – 5,000 | Closing – 7,000?

BMS College of Engineering (BMSCE)
Computer Science & Engineering: Opening – 2,500 | Closing – 4,000
Electronics & Communication Engineering: Opening – 3,000 | Closing – 5,000
Electrical & Electronics Engineering: Opening – 4,500 | Closing – 6,500
Mechanical Engineering: Opening – 6,000 | Closing – 8,000
Civil Engineering: Opening – 7,000 | Closing – 9,000?

M S Ramaiah Institute of Technology (MSRIT)
Computer Science & Engineering: Opening – 2,200 | Closing – 3,800
Electronics & Communication Engineering: Opening – 3,500 | Closing – 5,500
Electrical & Electronics Engineering: Opening – 5,000 | Closing – 7,000
Mechanical Engineering: Opening – 6,500 | Closing – 8,500
Civil Engineering: Opening – 7,500 | Closing – 9,500?

Dayananda Sagar College of Engineering (DSCE)
Computer Science & Engineering: Opening – 3,000 | Closing – 5,000
Electronics & Communication Engineering: Opening – 4,500 | Closing – 6,500
Electrical & Electronics Engineering: Opening – 6,000 | Closing – 8,000
Mechanical Engineering: Opening – 7,500 | Closing – 9,500
Civil Engineering: Opening – 8,500 | Closing – 10,500?

Note: The above ranks are indicative and based on available data for the OBC-NCL category. Every year, actual cutoffs may vary based on factors like seat availability, reservation policies, and candidate preferences.

?Regarding the chances of getting seats through JEE/JoSAA Counselling, here is, How to Predict Your Chances of Admission into NIT or IIIT or GFTI After JEE Main Results – A Step-by-Step Guide.

Providing precise admission chances for each student can be challenging. Some reputed educational websites offer ‘College Predictor’ tools where you can check possible college options based on your percentile, category, and preferences. However, for a more accurate understanding, here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Step-by-Step Guide to Check Your Daughter's Admission Chances Using JoSAA Data
Step 1: Collect Your Daughter's Key Details
Before starting, note down the following details:

Her JEE Main percentile
Her category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
Her Preferred institute types (NIT, IIIT, GFTI)
Her Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If your daughter is open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select her Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories.
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch you are interested in.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.

Follow this approach for Other State candidates and different categories.
Pro Tip: Adjust your expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, preparation strategies, and engineering career options, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your daughter's admissions!

Follow RediffGURUS to Know more on 'Careers | Health | Money | Relationships'.

...Read more

Nayagam P

Nayagam P P  |4453 Answers  |Ask -

Career Counsellor - Answered on Apr 23, 2025

Asked by Anonymous - Apr 23, 2025
Career
I got 98.02%ile in JEE MAINS session 2 . (EWS) Can I get TOP NIT (CSE) ?? EWS RANK 4146
Ans: Here is, How to Predict Your Chances of Admission into NIT or IIIT or GFTI After JEE Main Results – A Step-by-Step Guide.

Providing precise admission chances for each student can be challenging. Some reputed educational websites offer ‘College Predictor’ tools where you can check possible college options based on your percentile, category, and preferences. However, for a more accurate understanding, here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Step-by-Step Guide to Check Your Admission Chances Using JoSAA Data
Step 1: Collect Your Key Details
Before starting, note down the following details:

Your JEE Main percentile
Your category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
Preferred institute types (NIT, IIIT, GFTI)
Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If you are open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select Your Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories.
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch you are interested in.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.

Follow this approach for Other State candidates and different categories.
Pro Tip: Adjust your expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, preparation strategies, and engineering career options, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your admissions!

Follow RediffGURUS to Know more on 'Careers | Health | Money | Relationships'.

...Read more

Ramalingam

Ramalingam Kalirajan  |8284 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 23, 2025

Money
Hello Sir. I currently have a home loan of 52 lakhs with 16 years remaining on the tenure. Following the recent RBI repo rate update, my interest rate has been reduced to 8%. I now have a lump sum of 5 lakhs available. Could you please advise whether it's more beneficial to use this amount to make a prepayment towards the principal of my home loan or to invest it in stocks or mutual funds? Which option would offer better financial returns in the long run - closing the loan early or investing for potential growth?
Ans: Many banks have marginally reduced home loan interest rates, and your current rate at 8% is already among the better ones in the market.

Now, let's evaluate your decision clearly and simply — whether to use the Rs. 5 lakh lump sum to prepay your home loan or invest it for long-term growth.

 

Understanding the Current Loan and Investment Scenario
You have a home loan of Rs. 52 lakh.

 

The remaining tenure is 16 years.

 

Current interest rate is 8% per annum.

 

You have Rs. 5 lakh available for use.

 

You are thinking whether to prepay or invest.

 

This is a common and important financial decision.

 

We must assess it from all angles before choosing.

 

The right decision depends on goal, emotion, tax, and future cash flows.

 

Emotional Perspective: Peace of Mind vs. Growth
Prepaying reduces debt. It gives mental peace.

 

You feel more in control. EMI burden reduces.

 

You sleep better with lower outstanding balance.

 

But it stops your money from growing faster.

 

Investing in mutual funds or stocks offers growth.

 

But it comes with risk and market ups and downs.

 

If peace matters more, prepaying makes sense.

 

If growth is your priority, investing is better.

 

Know what feels right to you emotionally first.

 

Loan Prepayment: What Happens Financially
Your interest rate is 8% now.

 

If you prepay Rs. 5 lakh, your total interest reduces.

 

Your tenure may reduce. Or EMI may reduce.

 

Prepayment early in the loan saves more interest.

 

It gives guaranteed return. No risk is involved.

 

The effective return is same as your loan rate.

 

So, prepayment offers you a risk-free 8% return.

 

There is no tax to pay for this gain.

 

It is also simple and stress-free to do.

 

But once paid, that money is locked.

 

You can’t use it again unless you refinance.

 

Prepaying also lowers your home loan tax benefits.

 

Home Loan Tax Benefits You Must Consider
You claim Rs. 2 lakh yearly deduction on interest.

 

You also claim Rs. 1.5 lakh under 80C for principal.

 

These benefits reduce your taxable income.

 

So, effective cost of loan is less than 8%.

 

If you prepay, these benefits reduce or stop.

 

That means you lose part of the tax advantage.

 

If your tax slab is 30%, loan cost is closer to 5.6%.

 

In this case, investing may be better long-term.

 

Investing That Rs. 5 Lakh: Pros and Potential
You can invest in mutual funds for long-term.

 

Equity mutual funds can deliver 10% to 12% annually.

 

Over 10 to 15 years, it may grow 3-4x.

 

You also maintain liquidity with this approach.

 

You can withdraw in emergencies if needed.

 

Mutual funds are flexible and diversified.

 

Choose actively managed mutual funds only.

 

Do not invest in index funds.

 

Index funds just follow the market. No expert help.

 

In falling markets, index funds fall sharply.

 

They do not protect downside risk.

 

Skilled fund managers in active funds manage risks.

 

They can outperform the market over long term.

 

Actively managed funds offer better returns potential.

 

Also avoid direct plans without guidance.

 

Direct funds save cost, but lack expert advice.

 

You may pick wrong funds or exit at wrong time.

 

Regular plans through MFDs with CFPs offer support.

 

They help with reviews, rebalancing, and discipline.

 

That adds more value than low fees of direct plans.

 

So, choose regular funds with an MFD having CFP tag.

 

If you invest Rs. 5 lakh today in such funds, it can grow well.

 

Your Risk Appetite and Financial Behaviour
Are you okay with market ups and downs?

 

Can you avoid panic during a fall?

 

Can you hold on for 10-15 years?

 

If yes, investing is good for you.

 

If no, then prepaying loan is safer.

 

You must assess your risk profile.

 

Talk to a Certified Financial Planner for help.

 

Choose the option that matches your risk appetite.

 

Liquidity and Emergency Planning
Once you prepay, the Rs. 5 lakh is gone.

 

You can't get it back easily.

 

That reduces your liquidity.

 

If you invest instead, you keep access.

 

That money can be withdrawn in emergencies.

 

Liquidity is important in uncertain times.

 

Always maintain an emergency fund.

 

It should cover 6 to 12 months’ expenses.

 

Prepay only if this fund is already ready.

 

Don’t use all cash for prepayment.

 

Keep some buffer aside always.

 

Opportunity Cost of Prepaying vs Investing
Prepaying gives 8% return. No risk.

 

Investing can give 10% to 12%, but with risk.

 

Over long term, investing can give more wealth.

 

But returns are not guaranteed.

 

You may see short term losses too.

 

But with 15+ years holding, risk reduces.

 

If goal is wealth creation, investing wins.

 

If goal is safety and less EMI, prepaying wins.

 

Choose based on what matters more.

 

Use Balanced Approach: Prepay + Invest
You don’t need to do only one thing.

 

You can divide Rs. 5 lakh into two parts.

 

For example, prepay Rs. 2 lakh.

 

Invest Rs. 3 lakh in mutual funds.

 

This gives you lower EMI or tenure.

 

Also helps grow wealth for the long term.

 

This gives you mental peace and future returns.

 

It is a balanced and smart approach.

 

It avoids regret in future.

 

You win both ways – safety and growth.

 

Ensure your emergency fund is not affected.

 

Check if your mutual fund portfolio is aligned.

 

Take help from a CFP-backed mutual fund distributor.

 

Review your portfolio every year.

 

Stay invested without panic during market falls.

 

That is how wealth creation happens.

 

Final Insights
You are thinking wisely about using your Rs. 5 lakh lump sum.

Prepaying the home loan gives peace and fixed savings. It is a safe path.

But investing in mutual funds has higher potential returns. It needs patience.

There is no single “correct” answer. Both are good depending on your goal.

If safety and peace are top priority, prepaying is better.

If long-term growth is your goal, then invest in mutual funds.

Ideally, a 50-50 approach works best for most people.

It gives balance. And keeps options open.

Review this decision every year with a Certified Financial Planner.

That ensures your financial journey stays on the right path.

  

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |8284 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 23, 2025

Money
Hi I am 29 yrs old and a middle class salaried person. Currently i am having an investemnt of Rs. 4400 in MF scatered equally in 4 different MF mentioned below from last 1 yr with 10% increase in investment annually. ICICI Pru Bharat 22 FOF - Growth - Rs 1100/m SBI PSU Fund - Growth - Rs 1100/m Motilal Oswal Midcap Fund - Growth - Rs 1100/m Nippon India Smallcap Fund - Growth - Rs 1100/m Apart from the above investment I am also invested in NPS (kotak NPS) from last 1 yr with Rs 5000/m. Also I have a RD of Rs 30000/m going since last 9 months matures in 15 month from this will be allocating half of the funds for emergency or liquid funds and the other half want to invest as lumpsum in MF. I want to build a good amount of wealth for my retirement by the age of 60. Also want to buy a home of my own. Are the investment listed above enough and which MF to choose for lumpsum investment. Thank you.
Ans: You Have Made a Good Start
You are 29 years old and already investing monthly in mutual funds.

You are also investing in NPS regularly, which helps in retirement planning.

Saving Rs 30,000 per month in RD shows good discipline and consistency.

You have a clear goal of retirement at 60 and buying your own house.

Your financial awareness at this age is impressive and rare.

Current Mutual Fund Allocation Needs Restructuring
You are investing in sectoral and mid/small-cap funds.

These carry high risk and are not suitable as core portfolio.

They are good for extra returns, not for stability and long-term balance.

Consider including large-cap and flexi-cap funds to create a strong core.

These funds offer growth with better risk management.

Annual SIP Hike Is a Wise Habit
Increasing SIPs by 10% yearly builds a strong compounding habit.

It helps you keep pace with inflation and rising future costs.

Continue this pattern every year, even during volatile markets.

Use the RD Maturity Smartly
Once RD matures, split the money as you planned.

Keep half in an emergency or liquid fund.

Invest the other half in mutual funds through STP.

STP spreads the lump sum over time and avoids market timing risk.

NPS Is a Long-Term Asset
Keep investing in NPS for retirement benefit and tax savings.

Ensure you select the right asset mix in NPS.

NPS allows equity allocation up to a limit.

The right mix can help grow your retirement corpus better.

Emergency Fund Should Be a Priority
Emergency fund should cover six months of expenses.

Use low-risk, liquid options to store this fund.

It protects you during income loss or sudden costs.

Buy Insurance Independently
Do not depend only on your employer’s health and term cover.

Personal term insurance gives you full control.

It is important if you have dependents or plan to take a home loan.

Health insurance must also be purchased personally.

Medical costs are rising fast and can strain your savings.

Buying a Home Needs Planning
Fix a timeline and estimate the cost of your home.

Based on that, calculate the money needed over the years.

Save for home separately from your retirement fund.

For short-term goals like this, do not use equity funds.

Instead, use safer options like short-duration debt funds.

Avoid Index Funds for Your Profile
Index funds simply copy the market and cannot protect downside.

You need active fund managers to handle your investments.

They aim to beat the market and reduce volatility impact.

Active funds offer better balance of growth and protection.

Avoid Direct Funds If You Want Guidance
Direct funds have lower cost but no advice or strategy support.

Mistakes can happen without expert review and monitoring.

Regular funds via a professional help you stay disciplined.

Portfolio review, fund switch, and rebalancing are handled.

This adds value in the long term beyond just cost savings.

Tax Rules You Should Know
Long-term capital gains above Rs 1.25 lakh are taxed at 12.5%.

Short-term gains from equity funds are taxed at 20%.

Debt funds are taxed as per your income slab.

Always check tax impact before redeeming your investments.

Step-by-Step Actions to Take
Rebuild your SIP portfolio to include large-cap and flexi-cap funds.

Retain small/mid-cap funds but with a smaller share.

Build a 6-month emergency fund first from RD maturity.

Invest lump sum from RD slowly over 6-12 months via STP.

Buy term insurance and health insurance right away.

Continue NPS with equity tilt for growth.

Start a separate saving bucket for home purchase.

Review your SIPs every year and increase as your income grows.

Keep tracking your goal progress at least once a year.

Finally
You have laid a strong base early in your life.

Keep this momentum with annual review and disciplined savings.

Use every salary hike to increase your investments.

Avoid unnecessary loans and credit card expenses.

Follow your plan and seek help when needed.

Focus on long-term wealth and risk protection, not short-term returns.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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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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