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Ramalingam Kalirajan |8077 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 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

Asked by Anonymous - May 10, 2024Hindi

Hello Sir, I started to invest in mutual funds through SIP recently with below given funds 1. Nippon India small cap direct 5K 2. SBI small cap direct 5K 3. Quant small cap direct 5K 4. Kotak Emerging Equity Direct Muti cap - 5K I want to continue for next 10-15years, please whether I am in right path and how much I get corpus value at the end of Investment for the given period Thanks!!!

Ans: Your choice of funds reflects a focused approach towards potential growth. Investing in small-cap and multi-cap funds can offer significant growth opportunities over the long term. It's commendable that you're thinking about the future and considering a decade or more of investment.

Small-cap funds typically invest in companies with a smaller market capitalization, which can be more volatile but also offer higher growth potential. Multi-cap funds, on the other hand, provide diversification across market caps, potentially reducing risk while still aiming for growth.

However, it's essential to recognize the risks associated with small-cap investments. These funds can be more volatile and may experience significant fluctuations in value. Additionally, smaller companies may face challenges in adverse market conditions.

Regarding your investment horizon of 10-15 years, it aligns well with equity investments, which tend to perform better over extended periods. The power of compounding works in your favor over such a timeframe.

There are some advantages to consider direct funds, and the cost savings can be significant in the long run. However, there are some potential benefits to using a regular MFD:
Advantages of Investing Through a Mutual Fund Distributor (MFD):
• Personalized Advice: MFDs can be helpful for beginners or those who lack investment knowledge. They can assess your risk tolerance, financial goals, and investment horizon to recommend suitable mutual funds. This personalized guidance can be valuable, especially if you're new to investing.
• Convenience: MFDs handle all the paperwork and transactions on your behalf, saving you time and effort. They can help with account setup, SIP registrations, and managing your portfolio across different funds.
• Investor Support: MFDs can be a point of contact for any questions or concerns you may have about your investments. They can provide ongoing support and guidance throughout your investment journey.

To maximize your investment's potential, consider diversifying across different asset classes to mitigate risk. Also, regularly review your portfolio's performance and make adjustments as needed to stay aligned with your financial goals.

Remember, investing is a journey, and it's essential to stay patient and disciplined, especially during market fluctuations. Keep contributing regularly to your SIPs and stay informed about market developments.

Overall, with a long-term perspective and the right strategy, you're on track to potentially build a substantial corpus over the next decade or more.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Asked on - Jul 02, 2024 | Answered on Jul 02, 2024

Hi Sir, After taking your advise to diversify the Portfolio i have added 2 more SIP's UTI Nifty Index Fund - 5K & Parag Parikh Flex Cap fund -5K., over all right now I holding 6 SIP's with Amount totaling 30K. Kindly advise on my portfolio to get good corpus in next 10-15 years, should I need to add further SIP or should continue with same plans, I can add another 5K. Goal is to have healthy kids education and retirement plan as I am now 43. Awaiting for your valuable reply.

Ans: Your portfolio now is well-diversified across small-cap, multi-cap, and index funds. Adding the UTI Nifty Index Fund and Parag Parikh Flex Cap Fund strengthens your diversification. However, avoid index funds and choose active funds.

Adding another SIP of Rs. 5K can be a good idea. To get personalized advice and regular reviews, consult a Certified Financial Planner (CFP).

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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