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I invested in stocks and mutual funds without knowledge - did I make a mistake?

Milind

Milind Vadjikar  |1113 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Feb 13, 2025

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more
tanmay Question by tanmay on Feb 13, 2025Hindi
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Money

Hello Sir/Madam, i am 36 years after a gap of several years at job due to personal reason i started new job from zero during covid time as i wanted to save money for future one of my friend advised for stocks i opened from 1 app,then got another app like this 3 different app i sing for stocks initially was stock was going up and since 4-5 month stock is not performing well and later on from 1 app i opened mutual fund of 2000,500 lke this which went to 14000 later on that also in red feeling so tension did i do mistake by opening mutual fund and stock without knowledge and doing research please advice me what should i do where will i get to learn about best stock and nutual fund and also please tell me should i close all the 3 app(groww,dhani app,5 paisa) one app 5 paisa is unnecessary charging me AMC charging without doing any transaction every three month and on that taking penalty with interest.Please help me

Ans: Hello;

Trading in stocks just based on tips, without adequate knowledge, is akin to playing with fire.

For mutual fund investments you don't need demat and trading account.

You need guidance from a certified financial planner or an investment advisor to handhold you in your investment journey.

Best wishes;
X: @mars_invest
Asked on - Feb 13, 2025 | Answered on Feb 13, 2025
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so sir what should i do now about the 3 apps grow,5 paisa and dhani i used for stocks should i closed all the 3 accounts and what to do about the mutual fund which is in loss should i wait i invested 14000 in mF now it is 12000
Ans: Hello;

You may hold one trading + demat account with minimal charges and close the other two accounts. Although you may not do stock trading but demat account may also be used for holding 54 EC bonds, SGBs and even insurance policy certificates.

Sell the MF units and book the loss.

Visit an MFD, get yourself assessed for risk appetite, analysis of your financial profile, financial goals and time horizon available to achieve them.

Based on these inputs he may suggest you suitable funds to invest through sip.

Best wishes;
X; @mars_invest
Asked on - Feb 14, 2025 | Answered on Feb 14, 2025
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which website is good for analysing MFD can you please suggest me i have SBI long term equity fund direct plan,Nippong india growth fund direct,HDFC dividend yield fund direct growth,ICICI prudential blue chip fund direct, growth,Aditya Birla sunlife psu equity fund direct growth,Invesco india equity fund direct growth .I purchased all this at 14000 now the amount has gone down to 12000 which mf should i keep and which to sell.please advice sir and also please tell me any platform where i will get to learn about stocks and MF and can information about top MF and stocks
Ans: Hello;

MFD stands for mutual fund distributor.

His advice may be helpful not just for the initial check and recommendation but handholding during difficult phases and rebalancing portfolio in line with optimal asset allocation.

Lot of resources are available on the net to study about mutual funds and stock investing, for eg varsity by zerodha. value research, moneycontrol for analysis.

If you have a long-term horizon of 10 yr+ then you need not worry about such notional loss.

Best wishes;
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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Hi sir I am investing when ever i have money not like in SIP. my most of investments are around 6 L invested in Quant different mutual funds. No a days i can see my all the Quant funds are going down. Im 34 years old female. My plan is 10 years. Can i exit from quant and invest in any some MF rather than getting more loss? Can you please review my portfolian. Do i need to exit from any MF. Since i'm maintaining too many MF. Thanks in advance. Mutual Funds List No' Scheme Name AMC Category Sub-category ISIN 1 DSP Small Cap Direct Plan Growth DSP Mutual Fund Equity Small Cap INF740K01QD1 2 Quant Focused Fund Direct Growth Quant Mutual Fund Equity Focused INF966L01853 3 Parag Parikh Flexi Cap Fund Direct Growth PPFAS Mutual Fund Equity Flexi Cap INF879O01027 4 Mirae Asset ELSS Tax Saver Fund Direct Growth Mirae Asset Mutual Fund Equity ELSS INF769K01DM9 5 JM Flexicap Fund Direct Plan Growth JM Financial Mutual Fund Equity Flexi Cap INF192K01CC7 6 Axis Growth Opportunities Fund Direct Growth Axis Mutual Fund Equity Large & MidCap INF846K01J46 7 Parag Parikh ELSS Tax Saver Fund Direct Growth PPFAS Mutual Fund Equity ELSS INF879O01100 8 Quant Small Cap Fund Direct Plan Growth Quant Mutual Fund Equity Small Cap INF966L01689 9 Canara Robeco Small Cap Fund Direct Growth Canara Robeco Mutual Fund Equity Small Cap INF760K01JC6 10 Motilal Oswal Midcap Fund Direct Growth Motilal Oswal Mutual Fund Equity Mid Cap INF247L01445 11 Nippon India Multi Cap Fund Direct Growth Nippon India Mutual Fund Equity Multi Cap INF204K01XF9 12 Nippon India Small Cap Fund Direct Growth Nippon India Mutual Fund Equity Small Cap INF204K01K15 13 ICICI Prudential Value Discovery Direct Growth ICICI Prudential Mutual Fund Equity Value INF109K012K1 14 Quant Flexi Cap Fund Direct Growth Quant Mutual Fund Equity Flexi Cap INF966L01911 15 Nippon India Small Cap Fund Direct Growth Nippon India Mutual Fund Equity Small Cap INF204K01K15 16 Quant ELSS Tax Saver Fund Direct Growth Quant Mutual Fund Equity ELSS INF966L01986 17 Aditya Birla Sun Life PSU Equity Fund Direct Growth Aditya Birla Sun Life Mutual Fund Equity Sectoral / Thematic INF209KB1O82 18 Quant Mid Cap Fund Direct Growth Quant Mutual Fund Equity Mid Cap INF966L01887 STOCKS LIST: 1 APOLLO TYRES-EQ RE 1 2 ASIAN PAINTS EQ 3 BRITANNIA IND-EQ1/- 4 CG POWER-EQ2/ 5 IRCTCL-EQ2 6 NHPC LIMITED - EQ 7 TATA STEEL-EQ1/ 8 Deepak nitrate 9 LT 10 Narayana Hrudayalaya
Ans: You are actively investing, which is an excellent habit. However, managing too many funds can dilute returns and complicate tracking. Here's a detailed evaluation of your portfolio and suggestions for improvement.

Observations About Your Current Investments
Quant Funds’ Performance: Quant mutual funds have been volatile recently. Market phases can impact returns in the short term. However, their active management style often delivers strong long-term results. Reviewing their performance regularly is key.

Over-Diversification: Your portfolio has too many mutual funds, leading to overlapping investments. This makes tracking performance challenging and reduces overall returns. Consolidation is advisable.

Direct Mutual Funds: While direct plans have lower expense ratios, they require regular monitoring. If you lack time for constant tracking, investing through a Certified Financial Planner (CFP) can be beneficial.

Stock Investments: Your stocks are spread across sectors. While some are strong companies, direct stock investments demand active monitoring and deep analysis. Diversifying further into mutual funds might be better aligned with your long-term goals.

Tax-Saving Funds (ELSS): You have three ELSS funds. This creates unnecessary duplication. A single, well-performing ELSS fund is sufficient for tax-saving needs.

Goal Alignment: Your goal is 10 years. For this horizon, equity-heavy investments are ideal, but they must be consolidated for better returns.

Key Recommendations
1. Consolidate Your Mutual Funds
Having too many funds spreads your investments thinly. Instead, focus on 5–7 funds across categories. This will provide diversification without duplication.

Suggested allocation categories:

Large-Cap: One fund to provide stability and steady returns.
Flexi-Cap: One or two funds for flexibility in market capitalization.
Mid-Cap and Small-Cap: Two funds to capitalise on growth potential.
ELSS: One fund for tax-saving benefits.
Consolidation will reduce overlaps and improve overall efficiency.

2. Retain or Exit Quant Funds?
You can retain Quant Small Cap and Quant Flexi Cap if their long-term fundamentals are strong. Exit from others if performance consistency or fund overlap is an issue. Diversify with funds from other AMCs for better balance.

3. Reduce Stock Exposure
Direct stock investments can be risky without regular tracking. Consolidate your stocks and invest the proceeds into diversified mutual funds. This will reduce risk and improve your portfolio’s stability.

4. Monitor Fund Performance
Review mutual fund performance at least annually. Use metrics like returns, expense ratios, fund manager track record, and consistency in delivering returns.

5. Opt for Professional Guidance
Consider investing in regular funds through a CFP. They can provide personalised strategies, regular reviews, and rebalance your portfolio as needed.

Action Plan for Portfolio Restructuring
Step 1: Exit and Consolidate
Exit from underperforming or duplicate funds.
Retain well-performing funds across categories.
Choose funds with strong track records and low volatility.
Step 2: Suggested Fund Allocation
Allocate Rs 40,000 monthly across consolidated categories:

Large-Cap Fund: 25% allocation for stability.
Flexi-Cap Fund: 25% allocation for market cap flexibility.
Mid-Cap Fund: 20% allocation for growth potential.
Small-Cap Fund: 20% allocation for higher returns.
ELSS Fund: 10% allocation for tax-saving needs.
Step 3: Consolidate Stocks
Exit some stocks and reinvest the amount in mutual funds. Focus on reducing sector concentration.

Step 4: Regular Reviews
Review your portfolio semi-annually. Assess market conditions and align your portfolio with your goals.

Disadvantages of Index Funds and Direct Plans
Index Funds
No Active Management: Index funds lack the ability to outperform markets.
Market Dependent: They perform only as well as the index, with no defensive strategy during downturns.
Direct Plans
Higher Effort: Direct plans demand continuous monitoring.
Lack of Guidance: Regular plans via a CFP provide tailored advice, which direct plans do not.
Tax Implications
Keep in mind the new capital gains tax rules:

Equity Funds: LTCG above Rs 1.25 lakh is taxed at 12.5%. STCG is taxed at 20%.
Debt Funds: Gains are taxed as per your income slab.
Consider tax-efficient withdrawals when restructuring your portfolio.

Final Insights
You are on the right track by actively investing for your goals. However, managing fewer, well-performing funds can simplify your journey. Consolidating your portfolio will improve returns, reduce redundancy, and make monitoring easier.

Focus on aligning your investments with your 10-year goal. Use this opportunity to balance risk and returns effectively.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

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Ans: Dear Anonymous,
You need to make a decision for yourself after looking at all the pros and cons. How are you going to be able to handle your parents once you make the decision to go ahead with the marriage?
Also, on your part, you are right in asking, how long do you need to wait?
Before making a decision, always think far ahead as to how your environment will react and how you are going to handle all of it.

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Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

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Hi Mam, My parents are not agreeing for the marriage with my boyfriend cause it's an interfaith relation. I tried convincing them but they keep on saying foul words to me, saying that they would kill themselves if I don't leave him. I had seen my family from childhood and I don't want to be in a similar situation as they are, my mother had a relationship with someone else after marriage, my sister is not the biological child of my father, I am aware of all those but I haven't blamed them for that cause I felt if that's what is making them happy let them be, I haven't even confronted them. Now they say all the good stuff that me and your father were very great to each other you should learn those things and all. I am struck in a situation now. I have a job and my boyfriend also has one, could you please suggest.
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Judging your parents and their choices is not going to anyway help you in your context. So, why even go there?
Instead focus on your situation and how you can make things happen for yourself.
- Are you financially independent and will you be able to manage the discomfort that will emerge once you choose to be on your own?
- Will your boyfriend support your decision and will he stand by you when you go against your family?
- What does his side of the family have to say about all of this?
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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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