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Ramalingam

Ramalingam Kalirajan  |8009 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 13, 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 04, 2024Hindi
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Iam investing monthly sip in below funds my age-34 1-Icici prudential bluechipfund-3000 2-Nippon India growth fund -3000 My monthly investment amount max-10000 pls suggest my portfolio any correction sir some good funds for long term

Ans: You're already on the right track with your disciplined approach to investing in SIPs. Let's review your portfolio and explore potential adjustments for long-term growth.

Investing in ICICI Prudential Bluechip Fund and Nippon India Growth Fund reflects a balanced mix of large-cap and diversified equity exposure, which is suitable for long-term wealth accumulation.

However, to further diversify your portfolio and potentially enhance returns, consider adding funds from different categories like mid-cap or flexi-cap funds. These categories offer exposure to companies with different market capitalizations and investment styles, thus spreading your risk more effectively.

Mid-cap funds invest in companies with medium-sized market capitalizations, which often have higher growth potential than large-caps but come with increased volatility. Flexi-cap funds provide the flexibility to invest across market caps, allowing fund managers to capitalize on market opportunities across the spectrum.

Adding a mid-cap or flexi-cap fund to your portfolio can complement your existing investments and provide additional avenues for growth. Look for funds with a track record of consistent performance, experienced fund managers, and a robust investment process.

Remember to review your portfolio periodically and rebalance if necessary to ensure it remains aligned with your long-term financial goals and risk tolerance.

Keep up the good work with your investments, and don't hesitate to reach out to a Certified Financial Planner for personalized advice tailored to your specific needs and objectives.

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.
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Ramalingam

Ramalingam Kalirajan  |8009 Answers  |Ask -

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

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Hi Sir, I am 45 years now, I have these monthly SIP. Nippon India Large Cap Fund Rs.12000, Aditya Birla Sun Life Flexi Cap Fund - G Rs.4000, ICICI Prudential Technology Fund - G- Rs.12000, Axis Small Cap Fund Rs.12000, Nippon India Small Cap Fund - G Rs.4000 . Please review my portfolio and advice according to my son's advance studies in 7 years and retirement plan in 15 years.
Ans: Portfolio Review and Recommendations for Future Goals

Assessment of Current Portfolio

Your current investment portfolio reflects a diversified approach, with allocations across various fund categories, including large-cap, flexi-cap, technology, and small-cap funds. This diversification aims to balance risk and potential returns.

Evaluation of Asset Allocation

Your portfolio has a significant exposure to equity funds, which indicates a growth-oriented strategy. While equity investments have the potential for higher returns over the long term, they also carry higher volatility and risk.

Analysis of Fund Selection

Your choice of funds reflects a blend of growth potential and risk management. However, it's essential to assess each fund's performance, consistency, and alignment with your financial goals.

Assessment of Investment Horizon

Considering your son's advanced studies in seven years and retirement planning in fifteen years, it's crucial to evaluate your investment horizon and risk tolerance.

Recommendations for Future Adjustments

Review and Rebalance: Periodically review your portfolio to ensure it remains aligned with your goals and risk tolerance. Rebalancing may be necessary to maintain the desired asset allocation.

Goal-based Investing: Segment your investments based on specific goals, such as your son's education and retirement. This approach ensures a tailored investment strategy for each objective.

Risk Management: Given the relatively short time horizon for your son's education, consider gradually shifting a portion of your equity investments into more stable options as the goal approaches. For retirement planning, maintaining a diversified portfolio with exposure to equities for long-term growth potential is advisable.

Professional Guidance: Engage with a Certified Financial Planner (CFP) who can provide personalized advice and assist you in optimizing your investment strategy based on your financial objectives and risk profile.

Conclusion

In summary, while your current portfolio demonstrates a diversified approach, it's essential to periodically review and adjust your investments to ensure they remain aligned with your evolving financial goals. By implementing a goal-based investment strategy and seeking professional guidance, you can enhance the likelihood of achieving your objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8009 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 20, 2024

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Kindly review my monthly SIP portfolio for long term 10 years: UTI NIFTY 50 index fund direct growth Rs.500 from march2024, Nippon India small cap fund direct growth Rs.500 from apr2024, HDFC index S&P Bse sensex direct plan growth Rs.500 from Apr2024. Shall I continue or make any changes. Kindly advise retirement fund portfolio
Ans: Evaluating Retirement Fund Portfolio
Firstly, I must commend your foresight in planning for your retirement at such a young age. Building a robust portfolio now sets a solid foundation for your future financial security.

Review of Monthly SIP Portfolio
Let's assess your current monthly SIP portfolio for its suitability for long-term retirement planning over a 10-year horizon:

UTI NIFTY 50 Index Fund (Direct Growth) - Rs. 500 from March 2024
Nippon India Small Cap Fund (Direct Growth) - Rs. 500 from April 2024
HDFC Index S&P BSE Sensex Direct Plan Growth - Rs. 500 from April 2024
Disadvantages of Index Funds in Retirement Planning
While index funds offer the advantage of low costs and simplicity, they also come with certain drawbacks, especially when considered for long-term retirement planning:

Limited Potential for Outperformance: Index funds aim to replicate the performance of a specific index, such as the NIFTY 50 or S&P BSE Sensex. However, they inherently limit the potential for outperformance compared to actively managed funds.
Lack of Flexibility: Index funds are constrained by the composition of the underlying index, which may not always align with market opportunities or changing economic conditions. This lack of flexibility can hinder returns over the long term.
Dependency on Market Performance: Since index funds passively track market indices, their performance is entirely dependent on the market's movements. During periods of market downturns, index funds may underperform actively managed funds, potentially impacting your retirement corpus.
Recommendations for Retirement Fund Portfolio
Considering the long-term nature of retirement planning and the need for wealth accumulation, it's advisable to include a mix of actively managed funds alongside index funds in your portfolio. Actively managed funds offer the following benefits:

Potential for Alpha Generation: Skilled fund managers actively research and select stocks with the aim of outperforming the market. This active management can potentially generate alpha, resulting in superior returns over time.
Tactical Asset Allocation: Actively managed funds have the flexibility to adjust their asset allocation based on market conditions and economic outlook. This dynamic approach can help navigate market volatility and optimize returns.
Diversification Benefits: Actively managed funds often have diversified portfolios across sectors and market caps, reducing concentration risk and enhancing overall portfolio resilience.
Conclusion
In conclusion, while your current SIP portfolio includes index funds, it's prudent to diversify and include actively managed funds for better long-term retirement planning. A balanced approach that combines the cost-efficiency of index funds with the potential for alpha generation offered by actively managed funds can optimize your retirement corpus.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8009 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2024

Asked by Anonymous - May 14, 2024Hindi
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Hello sir I am Praveen my monthly sip in 3 fund UTI nifty 50 index fund 2200 parag parekh flexi cap 4100 and Kotak small cap 2000 please suggest me these fund are good or any changes and our suggestion required
Ans: Praveen. Let's review your current SIP investments in UTI Nifty 50 Index Fund, Parag Parikh Flexi Cap Fund, and Kotak Small Cap Fund to ensure they align with your financial goals and risk tolerance.

Current Portfolio Analysis
UTI Nifty 50 Index Fund: This fund provides exposure to the top 50 companies in India and aims to replicate the performance of the Nifty 50 Index. It offers diversification and stability.

Parag Parikh Flexi Cap Fund: Known for its flexible investment approach, this fund invests across market capitalizations and sectors. It emphasizes long-term growth potential and has a track record of consistent performance.

Kotak Small Cap Fund: Small-cap funds like Kotak Small Cap Fund invest in stocks of small-sized companies with high growth potential. They can offer higher returns but come with increased volatility.

Recommendations and Suggestions
Your current selection reflects a balanced approach with exposure to large-cap, flexi-cap, and small-cap segments.
UTI Nifty 50 Index Fund provides stability, while Parag Parikh Flexi Cap Fund and Kotak Small Cap Fund offer growth potential.
Consider reviewing your risk tolerance and investment horizon to ensure it aligns with the funds' objectives.
Potential Changes and Adjustments
Review Risk Tolerance: Assess your risk tolerance to determine if the allocation to small-cap funds is suitable for your comfort level. Small-cap funds can be volatile, so ensure you're prepared for fluctuations.

Diversification: Consider diversifying across different fund categories to spread risk. Adding a Mid-cap or Large & Mid-cap fund could enhance diversification.

Performance Evaluation: Monitor the performance of your funds regularly and compare them against their benchmarks and peers. If any fund consistently underperforms, consider switching to a better-performing alternative.

Consultation with a Certified Financial Planner (CFP)
Seeking advice from a qualified CFP can provide personalized recommendations based on your financial goals, risk tolerance, and investment horizon.
A CFP can help optimize your portfolio and ensure it remains aligned with your objectives.
Conclusion
Your current SIP investments reflect a diversified approach with exposure to different segments of the market. Consider reviewing your risk tolerance and diversification strategy to ensure it meets your long-term financial goals. Consulting with a CFP can provide valuable insights and help fine-tune your investment strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8009 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 25, 2024

Asked by Anonymous - Nov 23, 2024Hindi
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My age is 40 and started SIPs in 2019 but major part of SIPs came in past 1 year. I am planning for a retirement corpus around 3.00crores in next 20 years. Please review my portfolio 1. Canara Robeco flexi cap fund - Rs. 4000.00 2. Canara Robeco Consumer Trends funds - Rs. 2000.00 3. Motilal Oswal Midcap Fund Direct Growth - Rs.10000.00 4. Canara Robeco Small Cap fund Direct Growth - Rs. 5000.00 5. Canara Robeco ELSS Tax Saver - Rs. 5000.00 I want to invest further Rs. 10000.00 monthly for next 20 years in 2 more SIP with different portfolio and want to do some lumpsum Rs. 50000.00 for long run each year. Kindly Suggest funds for both SIPs and lumpsum. Thanks
Ans: Planning for Rs. 3 crores in 20 years is achievable with disciplined investments. Systematic planning and fund selection are crucial for long-term growth. Your current SIP portfolio reflects commitment, but there is room for improvement to align with your goal.

Observations on Your Current Portfolio
Canara Robeco Flexi Cap Fund (Rs. 4,000)
This is a good diversified option. Flexi-cap funds balance risks across market caps.

Canara Robeco Consumer Trends Fund (Rs. 2,000)
Thematic funds focus on specific sectors. These may carry higher risks due to limited diversification.

Motilal Oswal Midcap Fund Direct Growth (Rs. 10,000)
Midcap funds can generate higher returns but are volatile. A large allocation to this fund increases portfolio risk.

Canara Robeco Small Cap Fund Direct Growth (Rs. 5,000)
Small-cap funds are high-risk, high-reward options. A balanced allocation here is essential to avoid overexposure to volatility.

Canara Robeco ELSS Tax Saver (Rs. 5,000)
ELSS is beneficial for tax-saving purposes. It also ensures equity exposure with a lock-in period of three years.

Recommendations for Current Portfolio
Rebalance the Allocation

Your portfolio leans heavily towards mid-cap and small-cap funds. Diversify further with large-cap or multi-cap funds.
This will stabilize returns during market downturns.
Reassess Thematic Fund Allocation

Consider limiting the Consumer Trends Fund allocation. Such funds may underperform if their sector faces a downturn.
Continue ELSS Investments

This is essential for tax savings. It also helps in building a disciplined approach.
Taxation Perspective
Equity Mutual Funds
Long-term capital gains (LTCG) above Rs. 1.25 lakh are taxed at 12.5%.
Short-term capital gains (STCG) are taxed at 20%.

Debt Mutual Funds
Both LTCG and STCG are taxed as per your income tax slab.

Optimize withdrawals to minimize tax impact. Align investments with tax-efficient instruments.

Suggestions for Additional SIP Investments
To allocate Rs. 10,000 in new SIPs:

First SIP (Rs. 5,000)

Consider an actively managed large-cap fund. These funds focus on established companies with stable returns.
They provide consistency and balance to your portfolio.
Second SIP (Rs. 5,000)

Invest in a multi-cap fund. These offer flexibility across market caps, ensuring better adaptability to market conditions.
Recommendations for Lumpsum Investments
For Rs. 50,000 annual lumpsum investments:

Balanced Advantage Fund

A mix of equity and debt ensures lower volatility.
These funds are ideal for lumpsum investments, especially during market uncertainty.
Equity Opportunities Fund

Invest in funds focusing on long-term growth across sectors.
This complements your SIP-based equity investments.
Debt Fund with Low Duration

To park short-term capital, allocate some portion here.
This maintains liquidity and offers moderate returns.
General Investment Guidelines
Review Portfolio Performance Regularly

Assess fund performance every six months. Exit consistently underperforming funds.
Diversify Across Fund Houses

Avoid concentrating investments in one AMC. This mitigates fund house-specific risks.
Utilize a Certified Financial Planner (CFP)

Work with a CFP for expert insights and a holistic financial plan.
Regular funds via an MFD ensure better handholding and guidance.
Emergency Fund

Keep six months’ expenses in liquid assets. This ensures stability during uncertainties.
Evaluating Actively Managed Funds
Actively managed funds adapt to market changes. They aim to outperform benchmarks.
Fund managers’ expertise ensures a strategic approach, unlike index funds that merely replicate indices.
Drawbacks of Index Funds

Lack flexibility during market shifts.
Can lead to suboptimal returns if indices underperform.
Final Insights
You have a commendable start with SIPs. Focus on aligning investments with your financial goals. Rebalancing and diversifying across funds will reduce risks. Invest systematically and review periodically to stay on track.

Best Regards,

K. Ramalingam, MBA, CFP
Chief Financial Planner

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

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8009 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 19, 2025

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I have taken a floating home from Axis Bank for 30 lakh last year, with a interest rate of 8.5%, i have also prepaid 5 Lakh within five months, now i have an outstanding amount of arround of 24 lakh, as the RBI reduced the repo rate, Bank is refusing to reduce interest rate from 8.5% to 8.25%. please suggest what should i do now?
Ans: You took a floating-rate home loan from Axis Bank at 8.5% interest.
You prepaid Rs 5 lakh within five months, reducing your outstanding amount to Rs 24 lakh.
RBI reduced the repo rate, but Axis Bank refuses to lower your rate to 8.25%.
Why Your Interest Rate Is Not Reducing
Banks do not always pass repo rate cuts immediately to all borrowers.
Some loans are linked to MCLR (Marginal Cost of Funds Based Lending Rate), which adjusts slowly.
New loans might be under RLLR (Repo Linked Lending Rate), which reacts faster to RBI rate cuts.
Your loan agreement decides how and when rate cuts apply.
What You Can Do
1. Ask for a Rate Reduction
Request Axis Bank to switch your loan to an RLLR-based loan.
Banks charge a conversion fee, but it might save you lakhs in interest over time.
2. Compare with Other Banks
Check other banks' home loan rates for balance transfer options.
If a bank offers a lower rate, consider switching the loan.
Ensure the processing fee & charges don’t negate the benefit.
3. Negotiate with Axis Bank
If you have a good repayment record, negotiate for a lower spread or margin.
Mention that other banks offer better rates, increasing your bargaining power.
4. Make Partial Prepayments
If you have extra savings, consider small prepayments to reduce interest burden.
Prepaying reduces the principal, which lowers total interest paid.
5. Use a Home Loan Overdraft Account
Check if Axis Bank offers a home loan overdraft facility.
You can park surplus money and withdraw when needed, reducing interest payments.
Best Action Plan
Contact Axis Bank and request a switch to an RLLR-based loan.
Compare other banks for balance transfer options.
Negotiate for a lower spread if staying with Axis Bank.
Consider prepayments to reduce long-term interest costs.
By taking the right step now, you can save a significant amount on interest payments.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8009 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 19, 2025

Asked by Anonymous - Feb 18, 2025Hindi
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I have sold a plot worth for 1.85 cr... I have bought a plot worth 1.4 cr... can i keep the remaining in my saving account for house construction or do i put the balance amount in a cgas account
Ans: Since you sold a plot for Rs 1.85 crore and purchased another plot for Rs 1.4 crore, you have a balance of Rs 45 lakh.

Capital Gains Tax Implication
Long-Term Capital Gains (LTCG): If the plot you sold was held for more than 2 years, the profit is considered long-term capital gains (LTCG) and is subject to tax.
Tax Rate: LTCG on real estate is taxed at 20% with indexation benefit.
Reinvestment for Tax Saving: You can save tax by reinvesting the gains in a residential property under Section 54F of the Income Tax Act.
Can You Keep Rs 45 Lakh in a Savings Account?
No, if you intend to claim tax exemption under Section 54F, you cannot keep the balance amount in a savings account beyond the due date for filing your Income Tax Return (ITR).
If you don't invest in a residential house before filing your ITR, you must deposit the unutilized amount in a Capital Gains Account Scheme (CGAS).
You must use the CGAS amount within 3 years for house construction.
What Should You Do?
If You Are Constructing a House
Deposit Rs 45 lakh in a CGAS account before the due date of filing your ITR.
Use this amount within 3 years for house construction to claim full tax exemption under Section 54F.
If You Are Not Constructing a House
The Rs 45 lakh will be taxed as LTCG, and you must pay 20% tax (after indexation benefits).
Consider other tax-saving options, like investing in bonds under Section 54EC (with a 5-year lock-in).
Final Insights
If you plan to construct a house, deposit the Rs 45 lakh in a CGAS account before filing ITR.
If you don’t use this amount within 3 years, it will be taxed as LTCG in the year of expiry.
If you don’t want to construct a house, be ready to pay LTCG tax or invest in 54EC bonds for tax saving.

Best Regards,

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

...Read more

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Asked by Anonymous - Feb 18, 2025Hindi
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My father started a business with his brother in XYZ name and got a Gala in Apmc in the same name where they shared 50-50% share in both business n property after my fathers death i was admitted in as a partner with same ratio after few years my uncle passed in his share to his son so as of now i and my cousin brother are partner the proerty was purchased 296200 in the year 1995 along with registration so 148100 was the share of each and now i want to leave the partnership and also to let go of my share in the premises for which my exixting partner will pay me 3750000 on or before 31.3.2025 I wanted to know how much capital gain tax will be for me if i do not invest secondly can i invest in residential property I would appreciate if guided Thanking you in anticipation
Ans: 01. Considering receipt of Rs.37,50,000.00 as Sale of your share in property/ premises, it would be LTCG in this case.
02. Amount of LTCG without Indexation is Rs.36,02,000.00 (Sale Rs.37,50,000.00 Less Cost Rs.148,100.00). Tax @ 12.50% is Rs.4.50 lakh app.
02. Amount of LTCG with Indexation is Rs.32.12 lakhs (Sale Rs.37,50,000.00 Less Cost Rs.5,37 lakhs {Index 100/363}). Tax @ 20.00% is Rs.6.40 lakh app.
03. You may go for the first option & plan your tax liability. You can invest in residential property to save LTCG tax.
04. Other option to save tax is to purchase Capital Gain bonds. However, investment in Real Estate is always better than other investment.
Most welcome for any further clarifications. Thanks.

...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.

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