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

Ramalingam Kalirajan  |6995 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 10, 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
Sujit Question by Sujit on Jun 15, 2024Hindi
Money

Hello, I'm 47 years old. Investing in SIP for last few years. 1.In cases,you have advised to switch funds in case of weak performance. Just wanted to know,how to switch. Say I'm with SBI blue chip fund but want to swith some other better performing large cap fund . Shall I stop SIP with SBI and start with others . Is that all ? If yes, what to do with accumulated fund with SBI. Redeem or not ? Kindly explain. 2. How to choose CFP ? I mean, need to check credential before putting all ur faith over a person for the future . Kindly elaborate.

Ans: Switching funds and choosing a Certified Financial Planner (CFP) are important decisions. I understand the need for clarity in these areas. Let's dive into the details.

How to Switch Funds
Evaluating Current Fund Performance
First, you need to assess your current fund's performance. Check if the SBI Blue Chip Fund is consistently underperforming its benchmark and peers. Look at its returns over different periods and compare it with other large-cap funds.

Decision to Switch
If you decide to switch, the process involves stopping the SIP in the current fund and starting it in a better-performing fund. Here's how you can do it:

Stop SIP in Current Fund: Log into your mutual fund account or through the platform you use. Find the option to stop the SIP in the SBI Blue Chip Fund. This will halt future investments.

Start SIP in New Fund: Choose a new large-cap fund with a good track record. Set up a new SIP with the desired amount and tenure. Ensure it aligns with your financial goals and risk tolerance.

Managing Accumulated Funds
Now, you have to decide what to do with the accumulated funds in the SBI Blue Chip Fund.

Hold or Redeem: You can either hold the accumulated units or redeem them. Holding means you continue to benefit from any future growth. Redeeming allows you to reinvest in the new fund.

Reinvesting Redeemed Amount: If you choose to redeem, consider reinvesting the amount in the new large-cap fund. This can provide better returns if the new fund performs well.

Choosing a Certified Financial Planner (CFP)
Importance of a CFP
A CFP is crucial for personalized financial planning. They provide advice tailored to your financial situation, goals, and risk appetite. Choosing the right CFP is essential for your financial well-being.

Checking Credentials
When selecting a CFP, checking their credentials is vital. Here's how you can do it:

Certification Verification: Ensure the planner has the CFP certification from a recognized body. You can verify their certification online through official CFP websites.

Experience and Expertise: Look for a planner with substantial experience. Their expertise in handling various financial situations will be beneficial.

Client Testimonials and Reviews: Check for client testimonials and reviews. This gives insight into their service quality and client satisfaction.

Google Reviews: Google reviews can provide additional perspectives on the CFP's services. Look for consistent positive feedback.

Initial Complimentary Call: Have an initial complimentary call with the CFP. This helps you understand their approach and see if you're comfortable working with them.

Speak to Existing Customers: Speak to one of their existing customers. This helps you gauge if the CFP is trustworthy and reliable.

Questions to Ask
Before finalizing a CFP, ask these questions:

Fee Structure: Understand their fee structure. Ensure it's transparent and fits your budget.

Services Offered: Inquire about the services they offer. Ensure they cover all areas of financial planning relevant to you.

Investment Philosophy: Ask about their investment philosophy. Ensure it aligns with your financial goals and risk tolerance.

It's great that you are proactive about your investments. Switching funds and choosing a good CFP shows your commitment to financial growth. Understanding these processes can seem overwhelming, but you're on the right track. Your efforts will pay off in the long run.

Advantages of Mutual Funds
Diversification
Mutual funds provide diversification by pooling money from many investors to invest in a variety of assets. This reduces risk by spreading investments across different securities.

Professional Management
Mutual funds are managed by professional fund managers who have the expertise to make informed investment decisions. This professional management can potentially lead to better returns.

Liquidity
Mutual funds offer high liquidity. You can buy and sell mutual fund units easily, providing quick access to your money when needed.

Convenience
Investing in mutual funds is convenient. With SIPs, you can invest a fixed amount regularly without worrying about market timing. This disciplined approach can lead to wealth accumulation over time.

Power of Compounding
The power of compounding in mutual funds can significantly grow your investment. Reinvesting your returns allows your money to earn returns on returns, leading to exponential growth over time.

Risk and Considerations
Market Risk
Mutual funds are subject to market risk. The value of investments can go up or down based on market conditions. Understanding your risk tolerance is essential.

Expense Ratios
Mutual funds come with expense ratios, which are fees charged for managing the fund. Higher expense ratios can impact your returns. Compare expense ratios while choosing funds.

Performance Variability
Not all mutual funds perform consistently. It's essential to review fund performance regularly and make necessary adjustments to your portfolio.

Final Insights
Switching funds and choosing a CFP requires careful consideration and planning. By evaluating fund performance and making informed decisions, you can optimize your investments. Choosing a CFP with the right credentials and expertise ensures you receive personalized financial guidance.

Remember, the goal is to align your investments with your financial goals and risk tolerance. Stay informed, review your investments regularly, and seek professional advice when needed.

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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |6995 Answers  |Ask -

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

Asked by Anonymous - May 09, 2024Hindi
Listen
Money
I have SIP in following funds since one year, should I continue or switch: 1. SBI PSU fund - 3000 2. SBI Healthcare Opportunities Fund - 3000 3. SBI Contra Fund - 5000 4. Quant Small Cap Fund - 4000 5. Quant Mid Cap Fund - 2000 6. Nippon India Small Cap Fund - 4000 Should I continue or switch - please advise.
Ans: Evaluating Your Investment Portfolio: Should You Continue or Switch?
Understanding Your Current Portfolio
Your current investment portfolio consists of a mix of actively managed mutual funds across various categories. Let's delve into each fund and evaluate its performance and potential.

Assessing Fund Performance
SBI PSU Fund: This fund invests primarily in stocks of public sector undertakings. Over the past year, its performance may have been affected by market conditions and the performance of PSU stocks.
SBI Healthcare Opportunities Fund: Focused on the healthcare sector, this fund may have seen fluctuations due to sector-specific factors and market dynamics.
SBI Contra Fund: As a contrarian fund, it aims to invest in undervalued stocks. Its performance depends on the fund manager's ability to identify such opportunities.
Quant Small Cap Fund & Quant Mid Cap Fund: These funds target small and mid-cap stocks, which can be volatile but offer growth potential.
Nippon India Small Cap Fund: Similar to the Quant funds, this one focuses on small-cap stocks, which carry higher risk but can deliver higher returns over the long term.
Considering Switching Options
Switching investments should be driven by changes in your financial goals, risk tolerance, and the performance of your current funds. Here are some considerations:

Performance Comparison: Evaluate the performance of your funds against their benchmarks and peers. Consistent underperformance might warrant a switch.
Diversification: Assess the diversification of your portfolio across sectors and market caps. Switching may be considered to achieve better diversification.
Expense Ratio: Actively managed funds typically have higher expense ratios compared to index funds. However, they may offer the potential for outperformance, which needs to be weighed against the higher costs.
Decision Making
Review Your Goals: Reflect on your financial goals and investment horizon. Ensure that your investment choices align with your objectives.
Risk Tolerance: Consider your risk tolerance and whether you are comfortable with the volatility associated with certain sectors or market segments.
Consultation: Seek advice from a Certified Financial Planner (CFP) who can provide personalized guidance based on your individual circumstances.
Conclusion
In conclusion, the decision to continue or switch your investments depends on various factors including performance, diversification, and alignment with your financial goals. A thorough evaluation of each fund's performance and your investment objectives is crucial in making an informed decision.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ravi

Ravi Mittal  |403 Answers  |Ask -

Dating, Relationships Expert - Answered on Nov 08, 2024

Ramalingam

Ramalingam Kalirajan  |6995 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 08, 2024

Asked by Anonymous - Nov 08, 2024Hindi
Money
Iam under debt of Rs 10lac and my salary is 23k per month. How to come out from debt and i need to get debt free. So, please guide me.
Ans: Being in debt can be overwhelming, especially on a limited monthly income. But with disciplined planning and commitment, you can gradually achieve financial freedom. Here’s a detailed guide to help you pay off your Rs 10 lakh debt and build a stable financial foundation.

Step 1: Calculate Your Monthly Expenses and Set a Budget
Start by understanding your cash flow. Track every expense to get a clear picture of your spending.

Essential Expenses: These include rent, food, utilities, and any other basic needs.

Discretionary Expenses: Cut back on non-essentials like dining out, entertainment, and shopping.

Savings and Debt Repayment: Dedicate any amount left after essential expenses towards debt repayment.

Tip: Keep a written budget or use a mobile app to monitor your expenses. Reducing discretionary spending will help increase the amount available for debt repayment.

Step 2: Increase Income if Possible
Boosting income, even slightly, can significantly accelerate debt repayment. Here are some ideas:

Freelance or Part-Time Work: If possible, look for freelance work in areas you’re skilled in, like writing, tutoring, graphic design, or programming.

Overtime or Extra Shifts: If your employer offers overtime, consider taking it on to increase your income.

Sell Unwanted Items: Sell items you no longer need, such as electronics, clothes, or furniture, to generate additional cash.

Increasing your income, even temporarily, can help you pay off your debt faster.

Step 3: Create a Debt Repayment Plan
List all your debts, including outstanding amounts, interest rates, and due dates. Here are two strategies for paying them off:

Snowball Method: Pay off smaller debts first to gain momentum, then tackle larger ones. This provides psychological motivation by clearing debts faster.

Avalanche Method: Focus on debts with the highest interest rates first. This method saves more on interest in the long term.

Choose the strategy that suits you best and start making extra payments each month.

Step 4: Prioritize High-Interest Loans and EMI Payments
Debt with higher interest can escalate quickly, so prioritize clearing them first. Some common examples include:

Credit Card Debt: If part of your debt is on credit cards, try to pay it down as quickly as possible. Credit card interest rates are often the highest.

Personal Loans: If your Rs 10 lakh debt includes high-interest loans, prioritize these over lower-interest obligations.

Contact your creditors to explore if they can reduce your interest rate temporarily. Any reduction helps ease the debt burden.

Step 5: Consider Debt Consolidation Options
Debt consolidation combines multiple loans into a single, lower-interest loan, making it easier to manage. Options include:

Personal Loans: Look for a lower-interest personal loan to pay off existing debts. This can reduce the overall interest burden.

Balance Transfer: If a major portion of your debt is on a credit card, look for a card offering a low or zero-interest balance transfer option.

Be cautious of fees associated with consolidation options and make sure to do thorough research. Consolidation can simplify payments and potentially save you money on interest.

Step 6: Start a Small Emergency Fund
While repaying debt is crucial, having a small emergency fund (around Rs 5,000–Rs 10,000) can help you avoid additional debt. This fund is for unexpected expenses like medical emergencies or car repairs.

Building a small emergency cushion ensures you don’t rely on credit if unplanned expenses arise. Once your debt is cleared, you can gradually build a larger emergency fund.

Step 7: Avoid Taking on New Debt
Avoid credit cards, loans, or any new debt until you’ve repaid the current amount. New debt will delay your goal of becoming debt-free.

Instead of borrowing, prioritize saving for any purchases. Practicing patience with spending decisions will help prevent additional debt.

Step 8: Automate and Regularize Payments
Set up automated payments for your debt EMIs and monthly bills. Automation helps prevent missed payments, which can incur penalties and hurt your credit score.

If automated payments aren’t possible, set reminders to ensure timely payments.

Step 9: Track Progress and Stay Motivated
Track your progress each month and celebrate small wins, such as reaching specific milestones in debt reduction.

Seeing your debt balance decrease, even gradually, can keep you motivated.

Step 10: Seek Professional Guidance If Needed
If you feel overwhelmed, consider seeking guidance from a Certified Financial Planner (CFP). They can help you devise a structured plan tailored to your specific financial situation.

A CFP can also provide personalized advice on managing and reducing debt efficiently.

Finally
Your determination to achieve a debt-free life is commendable. By following these steps and staying disciplined, you’ll gradually pay off your debt and move toward financial freedom. Remember, small steps today will lead to a financially secure tomorrow.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |6995 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 08, 2024

Listen
Money
Dear sir/Ma'am, I want to invest long term mutual fund for my daughter marriage. She is now 15 years old and i want to invest for 10 years, please advised me which mutual fund best for me. My monthly investment amount is Rs. 5000.00/- please reply soon as soon possible.
Ans: Investing for your daughter's marriage is a thoughtful goal. With 10 years to grow your investment, mutual funds offer a practical approach to help achieve this objective. A disciplined investment of Rs 5000 per month can build a substantial corpus over time. Here’s a comprehensive guide to structuring this investment for long-term success.

Choosing the Right Type of Mutual Funds
For a 10-year horizon, equity mutual funds are suitable. They have the potential for higher returns over time. Considering a diversified mix of equity categories could balance growth with stability.

Equity-Oriented Funds: With their higher growth potential, equity funds can be ideal for long-term goals like marriage. Large-cap funds or diversified equity funds with a mix of large- and mid-cap investments can provide relative stability.

Balanced or Hybrid Funds: These funds allocate a portion to both equity and debt. This approach reduces risk while still capturing growth. Hybrid funds could be a good option to add stability.

Avoid Index Funds: While index funds are popular, they lack flexibility in managing market changes. Actively managed funds, however, allow fund managers to navigate market fluctuations, potentially offering higher returns.

Benefits of Regular Funds vs. Direct Funds
When considering direct funds, you miss out on expert guidance, which is vital for long-term investments. Regular funds through a Certified Financial Planner (CFP) ensure you get continuous support, fund reviews, and performance tracking. They help rebalance your portfolio when required, maximizing your returns and managing risks effectively.

SIP (Systematic Investment Plan) for Steady Growth
Setting up a monthly SIP of Rs 5000 is a practical approach. SIPs allow you to invest consistently, regardless of market highs and lows, which averages out costs over time. This approach, known as “rupee cost averaging,” helps reduce the impact of volatility.

Tax Implications on Mutual Fund Investments
Understanding tax rules on mutual funds is important.

Equity Mutual Funds: Gains above Rs 1.25 lakh attract a 12.5% tax on Long-Term Capital Gains (LTCG). Short-Term Capital Gains (STCG) are taxed at 20%.

Debt Mutual Funds: Both STCG and LTCG are taxed based on your income tax slab.

These tax rates are subject to change, so it’s crucial to monitor tax policies periodically. You may consult a tax advisor for updates and efficient tax planning.

Key Investment Tips to Reach Your Goal
Consistency: Stay disciplined with your SIPs to leverage compounding. Missing contributions can reduce the growth potential.

Regular Monitoring: Review fund performance at least once a year. This ensures the selected funds are meeting your expectations and objectives.

Professional Guidance: Consult a CFP periodically to align your investments with your financial plan. They can advise on any required adjustments to optimize your portfolio.

Adjusting for Inflation and Goal Cost
Over time, inflation will impact the cost of your daughter’s marriage. Your CFP can help you estimate the future value and adjust your SIP amount if needed. Gradually increasing the SIP amount can help you meet the target despite inflation.

Final Insights
Your commitment to this goal is commendable. By selecting the right mix of funds, maintaining discipline with SIPs, and staying informed on tax and fund performance, you’ll be well on your way to achieving the desired corpus for your daughter’s marriage.

Invest with confidence, plan regularly, and stay on track toward building a secure financial future for your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Radheshyam

Radheshyam Zanwar  |1033 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Nov 08, 2024

Asked by Anonymous - Nov 08, 2024Hindi
Listen
Career
Hello! I am looking to change my career. Currently, I work as a DTP Operator and Graphic Designer in my maternal uncle's offsset printing press business. My father passed away 8 years ago, so my maternal uncle has taken on the responsibility of me, my mother, and my brother. I have been working under them for the past 5 years as a favor of them. However, there has been no financial growth or development in my current position. But maternal uncle asks me to continue to work with them as their childrens are out of their Offset Printing profession. So they expect me to handle the business in future. But this will not happen. Also I'm not sure of the future scope of Offset Printing Press profession due to digitization. Though my mind is telling me to change profession, as of my financial condtion is weak I would have to start again from zero. I am feeling unsure about what to do?
Ans: Hello.
Presently you are working as a DTP operator and Graphic Designer with your uncle. It seems that due to financial problems, your uncle might be taking undue advantage of your situation and taking it granted that you must work for him and his printing press as a bull for 24x7. You said, your uncle's children are not interested in running the printing press. Hence he is expecting to handle the business in the future. I think this is a golden time to negotiate with your uncle from a business point of view and put some terms and conditions in front of him. You must overtake the printing press fully in your control and share some part of the profit with him. Remember, you are young, have solid experience of 5 years and the most important thing is that, your uncle is not dependent on you only. This makes the situation in your favor. If your uncle is not ready to hand over the printing press business to you, then you have an option to search for another job and tell your uncle also in this regard. I can fairly say, your uncle will not think to lose you under any condition. In life, nothing is impossible, With the hands-on experience of 5 years, you may job in an advertising company and a reputed publishing house. Related to your insecurity feeling, even though you are working with your uncle, you are feeling insecure. Hence either force your uncle to accept your terms and conditions or leave him without any hesitation. Try with new people, new organizations, and new opportunities. A little change will make a big change in your life.
Best of luck for your bright future.

If satisfied, please like and follow me.
If dissatisfied with the reply, please ask again without hesitation.
Thanks.

Radheshyam

...Read more

Ravi

Ravi Mittal  |403 Answers  |Ask -

Dating, Relationships Expert - Answered on Nov 08, 2024

Asked by Anonymous - Nov 07, 2024
Relationship
I (27M) am well Educated & well settled in a High-paying Job. Tall, Handsome & Fit. I am a Sociable & Outgoing person, but I never had a Girlfriend because I believe in having an Arranged Marriage with a Girl from the same Community, who's Family background is known to Parents. I strongly believe in abstaining from any kind of Sexual Intimacy until I get Married, due to my Personal, Moral, Ethical, Emotional as well as Religious & Socio-cultural Values. I'd want to experience even my First Kiss, only after getting Married to my Life Partner. And obviously, I expect my Future Life Partner also to Share similar Values. I cannot settle for Marriage with a Girl who had Pre-marital Sex (or even Kissed) anyone else in a Romantic Relationship, prior to Marriage. I would Reject such a Girl, however Beautiful, Well-Educated & Well-Earning she might be (all other Qualities being Subjective). Now, my Family has started looking up suitable Brides for me, within my Community. The Problem is that most Girls of our Community, in this Generation, are Well Educated & Financially Independent, staying in Cities, away from Parents & most of them, probably had Romantic Relationship(s) & experienced Physical Intimacy, at any Base Level. I know this by closely observing & discussing with many Girls of my Community (including my Female Cousins, Female Friends & Neighbours etc). They all are ridiculing me for my Preferences & advising me to forsake my Values, as they are Outdated in this Age. Now, I am Worried that I might never get to Marry a Girl who shares my Values. My greatest Fear is not ending up Unmarried, but getting Married to a Woman who lies about her Past (I consider it as Cheating). Can you please advise me on, how can I be absolutely Sure that a Girl is an Un-Kissed Virgin? How do I bring up this topic with any Girl before Marriage & ask her, without coming off as Creepy? How can I be Sure whether the Girl is being absolutely Honest about her Past or not? What are some other ways to find out about the Past of a Girl, apart from having an open conversation with herself? Please advise me regarding this, my Heart is not letting me foresake my Values, which are my Core Principles. I am willing to compromise on some other Qualities i.e., I'd happily settle down with a Girl who's Below Average in terms of Looks, Education & even Unemployed, as long as I can be Sure that she's an Un-Kissed Virgin. How can I be absolutely Sure of that?
Ans: Dear Anonymous,
You don't have to forsake your values based on others' opinions of it. If it makes you happy, you should stick to it. Having said that, you cannot force the same values on others. I understand you want a partner who has a similar mindset. The only way to get what you want is an open conversation- when you speak to a match, you can open up about your outlook and clear it from your end that you want the exact same values in your partner and politely request them to reject the alliance if she has any past relationships or has been intimate with anyone in any form. Let her know that you are not judging her, but this part is very important for you. Make it about yourself, because it is. Do not let the woman feel that there is some flaw in her, or start investigating her past.

Now, coming to your other query, how to be absolutely sure that she is telling the truth about her experiences- there is no such technique. You have to trust her. Moreover, you should understand that as much as you believe your values are important, trust in your partner is equally important in having a healthy and happy relationship. While you work on finding the partner of your choice, work on having a little more faith in people.
Hope this helps.

Best Wishes

...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