I want to invest in MF for long term basis what would be the fare amount to invest in sip considering I am a student and not earning

Ans: Hello Pankaj, Considering all factors, I suggest you start investing approx Rs 1.36 Lakh monthly sips to reach the target corpus.

If you wish, you can add some funds annually to reach Rs 1.36 lakh in sip investments. Listed below are some schemes you may find useful in achieving your future goals.

• Nippon India Growth Fund
• Quant Flexicap Fund
• Canara Robeco Emerging Equities Fund
• ICICI Pru Bluechip Fund

Ans: Hello, along with the category the time duration of your investment is also important
Your fund category can be 50% small cap and 50% mid cap with an investment horizon of 20 years

Ans: It's great to see your proactive approach towards investing despite having home loan commitments. Given your financial situation, here's a suggested breakdown for investing 40,000 INR in mutual fund SIPs:

Diversified Equity Funds (Large Cap/Multi Cap): Allocate around 60-70% of your SIP amount, i.e., 24,000 to 28,000 INR, to diversified equity funds. These funds offer exposure to a mix of large-cap and multi-cap stocks, providing stability and growth potential over the long term.
Mid Cap and Small Cap Funds: Allocate around 20-30% of your SIP amount, i.e., 8,000 to 12,000 INR, to mid-cap and small-cap funds for higher growth potential. These funds are more volatile but can offer significant returns over an extended investment horizon.
Balanced/Hybrid Funds: Consider allocating a small portion, around 10-20% of your SIP amount, i.e., 4,000 to 8,000 INR, to balanced or hybrid funds. These funds invest in a mix of equities and debt instruments, providing a balance between growth and stability.
Asset Allocation: Adjust the allocation percentages based on your risk tolerance, investment horizon, and financial goals. Regularly review your portfolio's performance and make necessary adjustments to ensure alignment with your objectives.
Professional Advice: Consider consulting with a Certified Financial Planner who can provide personalized guidance based on your financial goals, risk profile, and investment horizon. They can help you select suitable mutual funds and create a well-diversified portfolio tailored to your needs.
By following this breakdown and seeking professional advice, you can build a robust mutual fund portfolio that aligns with your financial objectives and helps you achieve your long-term wealth creation goals.

Ans: It's commendable that you are planning for your future. Setting a goal of Rs. 1 crore in 10 years is ambitious. Let’s break down how to achieve this through mutual funds.

Benefits of SIPs
Systematic Investment Plans (SIPs) are effective. They allow you to invest small amounts regularly. This helps in averaging the cost and reducing the impact of market volatility. SIPs also instill financial discipline.

Importance of Goal-Based Planning
It's crucial to align your SIP with your financial goals. We need to assess the expected rate of return. Typically, mutual funds provide returns between 10-12% annually. However, past performance does not guarantee future results.

Calculating the SIP Amount
Given your goal and time frame, you need a rough estimate. For a target of Rs. 1 crore in 10 years, a rough SIP amount would be around Rs. 50,000 per month. This is based on a conservative estimated annual return of 12%.

Selecting the Right Mutual Funds
Actively managed funds can be beneficial. These funds are managed by expert fund managers. They aim to outperform the market. This can provide better returns compared to index funds.

Advantages of Actively Managed Funds:
Professional management by experts
Potential for higher returns
Flexibility in investment strategy
Disadvantages of Index Funds:
Limited potential for outperformance
Rigid investment strategy
No active management
Avoiding Direct Funds
Direct funds might seem attractive due to lower costs. However, they lack the guidance of a Certified Financial Planner (CFP). Regular funds provide valuable advice and support. This helps in making informed investment decisions.

Disadvantages of Direct Funds:
No professional advice
Potential for uninformed decisions
Lack of strategic adjustments
Benefits of Regular Funds through CFP:
Expert guidance
Regular portfolio review
Strategic adjustments based on market conditions
Assessing Risk Tolerance
Your risk tolerance plays a significant role. At 48, balancing risk and growth is vital. A diversified portfolio can mitigate risks. This ensures stability while aiming for your financial goals.

Monitoring and Adjusting Your Portfolio
Regular reviews are essential. The market is dynamic, and your portfolio needs adjustments. A CFP can assist in rebalancing your investments. This keeps your portfolio aligned with your goals.

Tax Efficiency
Mutual funds offer tax benefits. Long-term capital gains (LTCG) on equity funds are tax-free up to Rs. 1 lakh annually. Proper tax planning enhances your returns.

Financial Discipline
Staying committed to your SIP is crucial. Market fluctuations can be unsettling. However, maintaining discipline is key to achieving your target.

Additional Considerations
Ensure you have adequate insurance coverage. This protects your investments in unforeseen circumstances. Also, keep an emergency fund to handle unexpected expenses.

Final Insights
Investing in mutual funds through SIPs is a wise decision. With careful planning and regular reviews, you can achieve your goal of Rs. 1 crore in 10 years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in