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Confused Investor: Should I Pause Investments or Stay Consistent with SIPs?

Samraat

Samraat Jadhav  |2277 Answers  |Ask -

Stock Market Expert - Answered on Apr 22, 2025

Samraat Jadhav is the founder of Prosperity Wealth Adviser.
He is a SEBI-registered investment and research analyst and has over 18 years of experience in managing high-end portfolios.
A management graduate from XLRI-Jamshedpur, Jadhav specialises in portfolio management, investment banking, financial planning, derivatives, equities and capital markets.... more
Asked by Anonymous - Apr 22, 2025Hindi
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I have been investing in mutual funds and a few direct stocks, but with interest rates staying high and market volatility increasing, I am a bit confused. Should I pause my investments or stay consistent with SIPs? How to balance safety with growth right now?

Ans: invest in a balance fund to have safety and growth.
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  |8342 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 09, 2024

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I am 22 years old and I just started SIP of Rs. 8000 in Tata Digital India fund direct growth and Rs 2000 in Motilal Oswal Nifty Midcap 150 Index Direct growth fund. I have a monthly income of about Rs 70000 and with the current drop in the stock market, is it good to invest more in Equity and take risk over Mutual funds
Ans: It's commendable that you've started investing at such a young age, showing foresight and financial responsibility. Let's analyze your current situation and the potential to increase equity investments:

With a monthly income of Rs. 70,000, your SIP contributions of Rs. 10,000 reflect a disciplined approach towards wealth accumulation.

The recent drop in the stock market presents an opportunity to invest more in equity, given your long investment horizon.

Equity investments carry higher risk but also offer the potential for higher returns over the long term, especially for young investors like yourself.

However, it's essential to consider your risk tolerance and investment objectives before increasing your equity exposure.

Diversification is key to managing risk in equity investments. Consider allocating additional funds across different sectors or asset classes to mitigate concentration risk.

Regular review and monitoring of your investment portfolio are crucial to ensure alignment with your financial goals and risk tolerance.

While equity investments have the potential for higher returns, they also come with higher volatility. Be prepared for short-term fluctuations and stay focused on your long-term investment objectives.

In conclusion, increasing your equity investments can be a prudent decision given your age and long investment horizon. However, make sure to assess your risk tolerance and diversify your portfolio accordingly.

Best Regards,

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

..Read more

Moneywize

Moneywize   |181 Answers  |Ask -

Financial Planner - Answered on Nov 03, 2024

Asked by Anonymous - Oct 29, 2024Hindi
Money
I’m Arjun from Kolkata. I am 50 years old with two sons aged 20 and 18. I’ve been investing Rs 40,000 per month in mutual funds for the last decade, but I’m now considering stopping SIPs and moving to more conservative options. What is your advice for balancing growth and safety?
Ans: ‘It is painful to contest as an independent’

It was and it is very much painful for me. Because the reason behind (contesting as an independent candidate against a BJP candidate from Borivali Vidhan Sabha seat) it is the people were saying that if a man of your stature is not taking any decision against such happenings then who will take (such decisions). In the coming 50 years no one will take. So you have to take the decision.
You have to react against this (unfair) decision, which party has taken to nominate Sanjay Upadhyay from Borivali. Once again I'm not totally against any outsiders because if you don't have a strong candidate in a given assembly and if you have good candidates from other assembly constituency then party should field (an outsider from other place). But once, twice (is fine); thrice is much more. This is the fourth time this has happened (that the BJP fielded an outsider from Borivali).
First, Vinod Tawdeji contested; second time, Sunil Raneji contested, third time Piyush Goyalji contested in 2024 Lok Sabha election. Now in this assembly election Sanjay Upadhyay's name has been (announced).

On his decision to contest as an independent…
Let me make it very, very clear that I have not asked ticket from party to contest this election. Party workers suggested my name; in party’s survey from the public, my name had come forward.
It was discussed and party has taken decision to not field Sunil Raneji, the present MLA, again. The news was in media that Gopal Shetty will be given a chance (to contest from Borivali). It was not by party but it was by media. Yesterday, my party’s district president Ganesh Khandkar's name was in discussion in the morning. I don't know how far it was right or wrong but it was in public domain. (But when eve his name was not announced) party karyakartas (workers) approached me yesterday (on October 28) noon time. I had made very much clear to them (people who make the decision in BJP who distribute tickets) that if any party worker from whether it was from Borivali or Magathane (Borivali’s adjoining neighbourhood from where Ganesh Khandkar belongs) because there’s just a road (in between these two Vidhan Sabha constituencies) in the middle. It doesn't make any difference. So we should accept (Khandkar’s name). Because if (I were to take) any decision against that (Khandkar’s nomination) also then people would not have liked it. People have seen me; what I am and (in that spirit) we should support that new party worker, whom the party has nominated (and get him elected). I made all party workers to understand the situation. But suddenly sometime between 3 and 3:30 pm, TV channels broke the news came that Sanjay Upadhyay has been nominated from Borivali.
From morning (of October 28) I was with Piyush Goyalji. We filed the nomination of Vinod Shelar (who is contesting from Malad). We filed nomination of Yogesh Sagarji (who is contesting again from Charkop), of Manishatai Chowdhary (from Dahisar) and Prakash Surve (BJP ally Shiv Sena’s nominee from Magathane).
After filling all four nominations we went to party office at Kandivali. Piyush Goyalji was also with me. He told (me) that party has taken the decision (to field Sanjay Upadhyay from Borivali).
I told him at that moment only that this decision is not right (the decision that BJP has taken). People will not accept it. I told him yesterday (October 28) that I am going to file (my nomination) as an independent candidate tomorrow (October 29, the last date for filing nominations in Maharashtra).

On fighting against friends and family…
Friends are always friends. Piyush Goyalji is also ours. All Bharatiya Janta Party workers are mine. I am for them.
I have appealed not only to Bharatiya Janta Party workers but of all the political parties that they should stand behind me in this fight because this is not a political fight. This is the fight to give justice to the party workers and to the people of Borivali.
This particular subject (of not giving party ticket to loyalists) is not only (an issue limited) to Borivali. It is for the entire nation. I will say everywhere such things (loyal workers are not getting tickets to contest election) are happening. It should not happen.
Again I will say this that I am not 100% against any outsider coming and contesting. Let me make it very clear again and again. It's okay once or twice. But successively four times it is not acceptable. It is not acceptable.

‘I have not resigned from BJP’
Definitely it is wrong because the party workers are working day and night to build this party, to serve the people. And if anyone from anywhere comes and contests then what is the use of party and sanghatna (organisation)?
I have told yesterday only I have not resigned. I am not going to resign. I am not going to leave my party’s principles and ideologies. I am not going to contest this election by going to any other party. That's why I have chosen to fight as an independent candidate’ all are mine and I am for all.

On his supporters hounding Piyush Goyal…
I don't think any such thing has happened. But if it has happened (then) that it is wrong. I will say such things should not happen because we are one. We all are one. Piyush Goyalji is a cabinet minister elected from this constituency. And he's our leader. We should respect him. I will appeal to all the party workers.
(We must respect) not just Piyush Goyalji but even the small party workers. We are all. We all are one.
Such things should not happen again.

About having second thoughts while vacating his seat for Piyush Goyal
Never. Never. Never. Never. Let me make it very clear that North Mumbai constituency was not my father's property. It was party’s (prerogative to decide who gets to contest from where) and it should always be party’s decision to decide who gets to contest from where. That was not my personal property.
Party has given me opportunity seven times. I fought, I won.
When Prime Minister (Narendra Modi) decided that North Mumbai is a very safe constituency and Piyush Goyalji should constitute contest contact from there then it was my duty to fulfill the wish of my Prime Minister. I am proud he chose North Mumbai for that job.

On withdrawing his nomination if the Prime Minister calls him to do so...

I don't think that Prime Minister or any big other leaders will do such things to me. Because we all are of one thought and thinking, I don't think what I have done is wrong. No one can tell me that you are doing something wrong. If I had gone to some other party to fight election, and win election and go to the Maharashtra Legislative Assembly, that would have been wrong.
When I sought support from other political parties (to help me win this seat) also I have made it very clearly that I will not join any party and contest this election. This election is something different which I am contesting. I am hopeful that people of other party and sections will also support me.




Given your stage in life, shifting from high-growth equity mutual funds toward more balanced and conservative options is a wise choice. However, to preserve growth potential while adding safety, consider a gradual, diversified approach. Here are some strategies to help you balance growth and capital protection:
1. Hybrid Funds for Balanced Growth and Safety

• Balanced Advantage Funds (BAFs): These funds dynamically manage equity and debt exposure based on market conditions, offering both growth potential and downside protection. BAFs can adjust their equity exposure when markets are volatile, which helps reduce risks while maintaining moderate growth.
• Equity Savings Funds: These funds allocate a smaller percentage to equities, combined with debt and arbitrage opportunities. They offer steady returns with less volatility than pure equity funds, which makes them a good middle-ground option.
2. Debt Instruments for Stability

• Fixed Maturity Plans (FMPs): With a set maturity date, FMPs invest in fixed-income instruments, aiming to deliver stable, predictable returns with minimal risk.
• Corporate Bond Funds and Short-Term Debt Funds: These funds focus on high-quality bonds and aim for returns slightly higher than traditional fixed deposits, with low to moderate risk. Short-term debt funds (duration up to 3 years) are less sensitive to interest rate changes, making them relatively stable.
• Target Maturity Funds: These funds are similar to bonds and hold securities until maturity, making them a safe bet for those nearing retirement. They offer predictable returns and are available with various time horizons.

3. Systematic Withdrawal Plan (SWP)

• You might consider moving a portion of your mutual fund investments into a Systematic Withdrawal Plan (SWP) in balanced or hybrid funds. This option allows you to receive regular payouts, which can act as an income stream while keeping your principal invested.

4. Consider Conservative Hybrid Funds

• These funds invest predominantly in debt and a smaller portion in equity, which helps in providing stable returns with a conservative approach. Over time, this strategy can offer some growth without the risks of a high equity allocation.

5. Diversify into Gold and Real Estate Investment Trusts (REITs)

• A small portion (e.g., 5-10%) of your portfolio can be allocated to assets like gold funds or REITs. Gold funds act as a hedge against inflation and market volatility, while REITs can provide passive income through real estate exposure without direct property investment.

6. National Pension System (NPS) for Retirement Security

• If you’re not already invested in the NPS, consider it as a tax-efficient option that offers both equity and debt exposure with a more conservative tilt. The NPS allows you to choose your asset allocation, balancing risk and return.

Suggested Allocation Example

• Equity (30%): Balanced Advantage Funds or Equity Savings Funds.
• Debt (60%): Corporate Bond Funds, Short-Term Debt Funds, and Target Maturity Funds.
• Alternative Assets (10%): Gold Funds, REITs, or NPS for a diversified approach.

This mix should help maintain some growth potential while providing increased stability as you approach retirement. Rebalancing your portfolio periodically and aligning your investments with your financial goals will help keep risk levels manageable while meeting your future needs.

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8342 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 13, 2025

Asked by Anonymous - May 13, 2025
Money
Greetings!!!! I am 43 years Old, I had started 10k per month TATA AIA SIP in previous year for total 7years Plan. I want to education plan for my 1 kid who is 6 years old now. Please advice and guide me about more investments plan, as i am still confused about future growth and any plan for my wife age 38years.
Ans: You're at a critical financial stage. Planning for your child’s education and securing your family’s future are both top priorities. You've already started a ULIP, which is a start. But let’s take a deeper 360-degree view of your situation.

Below is a detailed plan, broken into simple sections for better clarity.



Assessment of Your Current ULIP Investment

You're investing Rs. 10,000 per month in a 7-year ULIP.



ULIPs mix insurance with investment. That reduces the growth power of your money.



Charges like premium allocation, fund management, and mortality charges reduce returns.



Your actual invested amount is much lower in the first few years.



ULIPs have limited flexibility in fund switching and partial withdrawal rules.



Maturity benefits are taxed if the annual premium exceeds Rs. 2.5 lakh. Be cautious of this.



A ULIP is not ideal for education goals or long-term wealth building.



As a Certified Financial Planner, I suggest surrendering this policy and moving funds to mutual funds.



You can continue till 5 years to avoid surrender charges if already started.



But do not renew after the 7-year term. Don't increase contributions in this ULIP.



Planning for Your Child’s Higher Education

Your child is 6 years old. You have around 11-12 years.



College education in India or abroad can cost Rs. 30–60 lakhs or more.



Instead of ULIPs, invest in diversified mutual funds. This will give better inflation-adjusted returns.



Use a mix of large cap, flexi cap and small cap mutual funds.



Start SIPs in these funds with a long-term horizon of 10-12 years.



You may also consider goal-based child education funds that are actively managed.



Don't invest in direct funds. They look cheaper, but don’t offer guidance.



Always invest through a Certified Financial Planner via a regular plan.



Your investment will stay aligned with your goal as the planner will guide with rebalancing.



Use a dedicated SIP only for child’s education goal. Don’t merge it with retirement planning.



Suggested Action Plan for Child’s Education

Shift future contributions from ULIP to SIPs in active funds.



Start with Rs. 20,000 per month SIP only for education.



Review this SIP every year and increase it by 10%-15% annually.



Add lump sums like bonuses or yearly increments into the same goal fund.



In the last 2 years before the education goal, shift to debt funds slowly.



This will protect your accumulated amount from equity volatility.



Investment Plan for Your Wife (Age 38)

She has a long horizon. She can invest for both retirement and her independent needs.



Open a separate mutual fund folio in her name.



Start SIPs in flexi cap, large & midcap, and hybrid funds in regular plans.



You can start with Rs. 10,000 per month and increase gradually.



You may also use her PPF account for additional tax-free corpus.



Avoid investing in gold, insurance policies, or real estate for her.



Ensure she has her own health insurance and a term insurance if she’s working.



If she’s not working, then create an emergency fund in her name.



That gives her independence and safety if she needs cash.



Family Protection with Insurance

You did not mention your term cover. You must have it if not already.



Ideal cover should be 15–20 times your yearly income.



ULIPs or LIC endowment policies should not be considered for protection.



Avoid investment-linked insurance plans. Keep insurance and investment separate.



Review your existing insurance covers. Add riders like critical illness and accident if needed.



Tax Efficient Planning

Use Section 80C wisely. Don’t just rely on ULIP or LIC plans.



Max out PPF, ELSS mutual funds, and children tuition for tax saving.



Invest in actively managed ELSS funds for better returns than ULIPs.



Avoid index funds for tax planning. They may underperform in volatile markets.



Debt funds are taxed as per slab now. Use carefully if short horizon.



Track capital gains if you sell mutual funds. Use new tax rules for equity funds:



  - LTCG above Rs. 1.25 lakh taxed at 12.5%

  

  - STCG taxed at 20%



Plan redemptions well in advance to manage taxes efficiently.



Retirement Planning (For You and Wife)

Start a separate SIP for your retirement corpus. Do not merge with other goals.



You have 17 years for retirement. That’s good for wealth accumulation.



Invest in a mix of actively managed flexi-cap and large-cap funds.



Add hybrid funds to reduce volatility as you near retirement.



Continue EPF, and increase VPF if possible. It is tax-free and safe.



Don't consider NPS if liquidity is important. Maturity rules are rigid.



Use mutual funds with regular advice to stay on track till age 60.



Exit ULIPs and Poor Insurance Products

You mentioned TATA AIA ULIP. Continue for 5 years to avoid penalty.



After that, exit and move funds to SIP in mutual funds.



If you or wife have LIC endowment, Jeevan Saral, or ULIPs, surrender them.



Reinvest maturity amount into SIPs in regular mutual fund plans.



Do not fall for insurance agents who pitch plans as tax saving or guaranteed.



Emergency Fund and Liquidity

Keep at least 6 months of family expenses in a liquid mutual fund.



Don’t use your SIP or education fund as emergency source.



You may open a separate savings bank linked sweep account for this.



This fund will help if there is any job loss, health issue, or urgent need.



What Not to Do

Don’t invest in new ULIPs or insurance-linked plans.



Avoid direct mutual fund investments. You won’t get guided rebalancing.



Do not use your child’s education fund for house down payment.



Don’t pick index funds. They underperform in sideways or bear markets.



Don’t buy land or gold as an investment for your goals.



Final Insights

You are at a very strategic life stage. You have time and income strength.



ULIPs will not help you grow wealth. Shift to goal-based mutual fund SIPs.



Separate goals: child education, your retirement, wife’s security, and emergencies.



Invest only through a Certified Financial Planner for customised long-term support.



Review all goals every year. Increase SIPs with income.



Protect family with pure term insurance and health insurance.



Focus on building wealth in regular mutual funds, not through insurance products.



Real financial freedom comes when goals are funded without stress.



You have a clear head start. Use it with discipline and right guidance.



Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...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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