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Hemant

Hemant Bokil  | Answer  |Ask -

Financial Planner - Answered on Jan 27, 2023

Hemant Bokil is the founder of Sanay Investments. He has over 15 years of experience in the field of mutual funds and insurance.Besides working as a financial planner, he also hosts workshops to create financial awareness. He holds an MCom from Mumbai University.... more
Asked by Anonymous - Jan 26, 2023Hindi
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Hemantji, How safe is it to save in mutual funds, especially for senior citizens?

Ans: Hi, mutual funds are subject to market risk but if you invest with proper study or with the help of an expert then risk management can be done efficiently and effectively. For senior citizens too good schemes which are giving decent returns with moderate risks are available
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  |6903 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 06, 2024

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Sir, i am 42 years old and investing in mutual fund since last 3 years. Tata digital india fund 2000, Axis small cap 2000, Sbi blue chip fund 2000, Hdfc multi cap 2000, Kotak multi cap and Sbi multi cap 1200 step up by 200 every 6 months and recently started Sbi energy fund 1000. I can invest 5k more per month. Is this going well saving a 20 million fund for retirement after 18 years
Ans: It's impressive to see your dedication to investing for your future, especially with a diversified portfolio like yours.

Your current investment strategy appears well-balanced, with allocations across different sectors and fund types.

Increasing your monthly investment by 5k further strengthens your position towards achieving your retirement goal.

Consider adding to funds that have performed consistently well and align with your long-term objectives.

Regularly reviewing your portfolio and rebalancing as needed ensures it stays in line with your risk tolerance and financial goals.

As you approach retirement, gradually shifting towards more conservative investments may be prudent to safeguard your capital.

Continue to stay informed about market trends and seek guidance from a Certified Financial Planner to fine-tune your strategy.

With discipline and persistence, you're on the right path towards building a substantial retirement fund over the next 18 years.

Your proactive approach to financial planning is commendable. Keep up the excellent work, and remember that every rupee invested today brings you closer to a secure future.

..Read more

Ramalingam

Ramalingam Kalirajan  |6903 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 29, 2024

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i am 69 years old and my mutual fund folios have following funds pl review these are ok fr my coming retirement years hdfc elss tax saver HSBC VALUE FUND REGULAR SINCE 2017 ICICIPRU THEMATIC ADVANTAGE FUND GROWTH 2022 INVESCO INDIA INFRASTRUCTURE FUND GROWTH 2022 MOTILAL OSWAL LARGE AND MIDCAPFUND REGULAR 2022 NIPPON INDIA ELSS TAX SAVER FUND GROWTH 2017 QUANT SMALL CAP FUND GROWTH 2022 SIP 50000 P.M
Ans: Let's carefully review your mutual fund portfolio to ensure it aligns with your retirement goals.

Assessing Your Current Mutual Fund Portfolio
Your portfolio consists of various mutual funds, including tax-saving funds, value funds, thematic funds, infrastructure funds, large and mid-cap funds, and a small-cap fund. Each of these has distinct characteristics and risk profiles.

Tax-Saving Funds (ELSS)
You have investments in tax-saving funds, which are beneficial for tax deductions. ELSS funds typically have a lock-in period of three years. However, as you approach retirement, liquidity becomes crucial.

Consider the necessity of continued investment in ELSS funds once the lock-in period ends. They should be evaluated for their performance and your need for liquidity.

Value Fund
Value funds focus on undervalued stocks with strong fundamentals. These funds can provide good returns over time but may be volatile in the short term. They are suitable for long-term investors who can withstand market fluctuations.

Thematic and Sectoral Funds
Thematic and sectoral funds, like your infrastructure fund and thematic advantage fund, focus on specific sectors. These funds can be high-risk due to their narrow focus. In retirement, reducing exposure to high-risk funds is advisable.

Large and Mid-Cap Funds
Large and mid-cap funds invest in established companies with strong market positions. These funds offer a balance of stability and growth. They are suitable for a moderate risk profile, which is often appropriate for retirees seeking steady returns.

Small-Cap Funds
Small-cap funds invest in smaller companies with high growth potential but also come with high volatility. Given your retirement stage, high volatility might not align with your need for capital preservation and steady income.

Evaluating Your SIP Strategy
You are investing Rs 50,000 per month via SIPs. SIPs are excellent for disciplined investing and averaging out market volatility. However, the allocation among various funds needs to be assessed to ensure it aligns with your retirement goals.

Recommendations for Retirement Planning
Prioritize Safety and Liquidity
As you approach retirement, prioritize safety and liquidity. Reduce exposure to high-risk funds like small-cap and thematic funds. Shift towards more stable investments.

Increase Allocation to Debt Funds
Debt funds provide regular income with lower risk compared to equity funds. Increasing your allocation to debt funds can provide stability and regular income during retirement.

Balanced or Hybrid Funds
Consider balanced or hybrid funds that invest in both equity and debt. These funds provide a mix of growth and income, balancing risk and return. They can be suitable for retirees needing both income and growth.

Actively Managed Funds
Actively managed funds can adapt to market conditions and aim for higher returns. They provide flexibility and professional management, which is beneficial for optimizing your retirement portfolio.

Disadvantages of Index Funds
Index funds track a market index and cannot adapt to market changes. This lack of flexibility can result in missed opportunities for higher returns, making them less ideal for a dynamic retirement portfolio.

Benefits of Regular Funds through a Certified Financial Planner
Investing through a Certified Financial Planner ensures your portfolio is professionally managed. They provide personalized advice and strategic adjustments to align with your retirement needs.

Regular Review and Rebalancing
Regularly review and rebalance your portfolio to ensure it remains aligned with your retirement goals. Market conditions and personal circumstances change, so adjustments are necessary.

Understanding Your Risk Tolerance
At 69, your risk tolerance may be lower than in your younger years. Focus on capital preservation and income generation. High-risk funds may not be suitable for your stage of life.

Creating a Steady Income Stream
Plan for a steady income stream to support your retirement lifestyle. Consider Systematic Withdrawal Plans (SWPs) from mutual funds for regular income.

Professional Guidance for Optimal Planning
A Certified Financial Planner can help create a tailored retirement plan. They ensure your investments align with your risk tolerance, income needs, and long-term goals.

Conclusion
Your current portfolio has a mix of high-risk and stable funds. As you approach retirement, focus on safety, liquidity, and steady income. Rebalance your portfolio to reduce exposure to high-risk funds and increase allocation to debt and balanced funds. Regular reviews with a Certified Financial Planner will help you stay on track and adjust your investments as needed.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Milind

Milind Vadjikar  |555 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 02, 2024

Asked by Anonymous - Nov 01, 2024Hindi
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Hi I am 43 years old working in corporate sector in Bangalore for last 20 years. I got impacted by job loss due to the economic scenario and I am finding it difficult to get a job now for almost last 1 year. I am living off my savings. My investments are 1.5 Cr in FD, 2.75 Cr direct investment in equity, 80 Lakh in MF, 35 Lakh in PF, 1 Cr in NPS/Pension fund and 50 Lakhs in Gold. I live in the house I own and I have no loan. I also own a piece of Land worth 60 lakhs. I dont have any debts now. I dont have term life insurance, I have health insurance cover of 2 CR for family. My son is in 10th standard and wants to study abroad which will be a major expense in future. My monthly expenditure including school fees is 1.75 lakhs. Please advise me on how to manage the assets and how to move around the investments as getting a job seems to be more difficult.
Ans: Hello;

Following is the sum of investments you currently hold:

1. FDs: 1.5 Cr
2. Direct stocks: 2.75 Cr
3. MF corpus: 0.8 Cr
4. Land property: 0.6 Cr
5. PF corpus: 0.35 Cr
6. NPS corpus: 0.2 Cr
Grand TOTAL: 6.20 Cr

You should apply for premature withdrawal of NPS. Since this being premature withdrawal your corpus of 1 Cr will get divided into two components 0.8 Cr worth annuity you will have to buy while rest 0.2 Cr comes to you which is indicated above.

The gold asset worth 50 L is purposely not considered here. It may be used as a emergency safe reserve.

You may invest 6.2 Cr corpus in ICICI Pru equity savings fund (low to moderate risk) and do an SWP at 3% which may yield you a monthly income of ~1.4 L (post tax).

The 0.8 Cr of NPS used to buy annuity will yield you a monthly income of around 40 K (6% annuity rate considered), therefore your total monthly income will be 1.4+0.4=1.8 L.

The average returns of ICICI Pru equity savings fund are 8-9% but it is relatively less risky and this is more important.

To fund overseas education of your son, you may have to partially deplete the corpus apart from emergency gold reserves.

Hence it makes sound practical sense to have term life cover of ~ 2 Cr with riders for critical care and accident benefit for 15-20 years, apart from the health care cover which you have already.

This will ensure son's education and income for regular household expenses remain more or less unaffected in the unfortunate situation of your demise.

Also please keep searching for assignments, if not possible full time, maybe part time or on consultation basis.

This will keep you focused and busy.

Feel free to revert.

Happy Investing;

...Read more

Milind

Milind Vadjikar  |555 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 02, 2024

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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