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Samraat Jadhav  |2086 Answers  |Ask -

Stock Market Expert - Answered on Apr 08, 2024

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
Rahul Question by Rahul on Apr 08, 2024Hindi
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Namaste sir Hazoor multi projects and Authum investment & infrastructure pe aapka view for long term investment BSE listed hai Shares sir, in shares me kab Entry karna chahiye..?????

Ans: dono companies se dur raho wahi behtar hain
Asked on - Apr 10, 2024 | Answered on Apr 11, 2024
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Thank you sir, Sir kuch aache fundamentally strong mid cap and small cap stocks bataiye Long term investment ke liye..?????
Ans: As per regulatory compliance no new stock recommendation can be mentioned, I would suggest you to visit a SEBI Registered Investment Advisor and seek advice from them. The following link will help you to find the nearest Adviser for you.
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=13
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  |6958 Answers  |Ask -

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

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Namaste sir kuch acche large, mid and small companies bataiye jaha pe long term ke liye investment kar sakte hai..? ????
Ans: When considering long-term investments in the stock market, it's essential to approach it with a well-thought-out strategy. Here's an in-depth explanation:

Investing in individual stocks can be risky and requires a deep understanding of the companies you're investing in, along with regular monitoring and research. For most investors, especially those without extensive knowledge or experience in the stock market, a safer and more diversified option is to invest in mutual funds.

Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. They are managed by professional fund managers who make investment decisions on behalf of the investors. Mutual funds offer several advantages over direct stock investments:

Diversification: One of the most significant advantages of mutual funds is diversification. By investing in a mutual fund, you gain exposure to a diversified portfolio of stocks across various sectors and industries. This diversification helps reduce the risk of individual stock underperformance impacting your overall portfolio.
Professional Management: Mutual funds are managed by experienced and qualified fund managers who conduct in-depth research and analysis to select stocks that align with the fund's investment objectives. These managers continuously monitor the portfolio and make adjustments as needed to optimize returns.
Accessibility: Mutual funds offer easy accessibility to the stock market for individual investors, even those with limited capital or knowledge. With mutual funds, you can invest in a wide range of stocks with relatively small investment amounts.
Lower Costs: Compared to direct stock investments, mutual funds often have lower transaction costs and fees. Additionally, the economies of scale achieved through pooling investors' money allow mutual funds to negotiate lower trading costs and access institutional pricing.
Liquidity: Mutual funds provide liquidity, allowing investors to buy and sell their shares at the fund's net asset value (NAV) on any business day. This liquidity ensures that investors can easily access their investment funds when needed, providing flexibility and convenience.
Now, let's delve into the specific types of mutual funds suitable for long-term investment:

Large-Cap Funds: Large-cap funds invest primarily in stocks of large, well-established companies with a proven track record of stable earnings and strong market presence. These companies typically have a market capitalization in the higher range, making them relatively less volatile compared to mid-cap and small-cap stocks. Large-cap funds are suitable for investors seeking stability and consistent returns over the long term.
Mid-Cap Funds: Mid-cap funds invest in stocks of medium-sized companies that have the potential for significant growth. These companies are often in a phase of expansion and may offer higher growth prospects compared to large-cap stocks. However, they also carry higher volatility and risk. Mid-cap funds can be ideal for investors with a higher risk tolerance looking to achieve capital appreciation over the long term.
Small-Cap Funds: Small-cap funds focus on investing in stocks of small-sized companies with high growth potential. These companies are often in their early stages of development and may offer the possibility of substantial returns over the long term. However, small-cap stocks are more volatile and carry higher risk compared to large-cap and mid-cap stocks. Small-cap funds are suitable for aggressive investors willing to tolerate higher levels of risk in pursuit of higher returns.
Balanced Funds: Balanced funds, also known as hybrid funds, invest in a mix of stocks and fixed-income securities such as bonds and money market instruments. These funds aim to provide investors with a balanced portfolio that offers the potential for capital appreciation from stocks while also providing income and stability from bonds. Balanced funds are suitable for investors seeking a diversified investment approach with a balanced risk-return profile.
Equity Diversified Funds: Equity diversified funds invest across multiple market capitalizations, including large-cap, mid-cap, and small-cap stocks. These funds offer broad exposure to the equity market and aim to capitalize on the growth potential of different segments of the market. Equity diversified funds are suitable for investors looking for a well-diversified equity portfolio with exposure to various market segments.
In conclusion, mutual funds offer an excellent avenue for long-term investment, providing diversification, professional management, accessibility, lower costs, and liquidity. By investing in mutual funds across different categories such as large-cap, mid-cap, small-cap, and balanced funds, investors can build a well-diversified portfolio tailored to their risk tolerance and financial goals. Consulting a Certified Financial Planner or Mutual Fund Distributor with a CFP credential can help investors navigate the mutual fund landscape and make informed investment decisions aligned with their objectives.

..Read more

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Asked by Anonymous - Nov 05, 2024
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Sir I am 47 years old and want to retire in next 2-3 years. My portfolio is as under FD-22 L MF-22 L. ( SIP of 33000 running) Gold--10 L EPF--24 L and App Gratuity -10 L Equity--10 L Rental Income -25000 per month from 80 Lacs flat. ( No loan pending now) 1 cr term plan and 10 l mediclaim running Parental House -2.5 cr and Land -2.5 cr. My son is studying in second year of engineering. And my monthly hone expense is not more than 30000-35000 per month. Can I afford to retire ?
Ans: It’s commendable that you've accumulated a diverse portfolio with a clear retirement goal. Let's evaluate if your current portfolio aligns with a secure retirement.

Portfolio Review and Income Assessment
Based on your retirement aspirations, let’s consider each component of your portfolio and its potential to generate sustainable income:

Fixed Deposits (FD): Rs 22 lakh
FD interest can serve as a steady income source, though it typically yields lower returns, which may not keep up with inflation over the long term.

Mutual Funds (MF): Rs 22 lakh, with a SIP of Rs 33,000
MFs offer potential growth and help combat inflation. Continuing your SIPs could grow this corpus further, providing higher returns than fixed-income sources.

Gold: Rs 10 lakh
Gold adds stability and can be liquidated if needed. However, it might not be the best primary income source.

Employee Provident Fund (EPF): Rs 24 lakh and Gratuity Approx Rs 10 lakh
EPF and gratuity offer safe post-retirement funds. When you withdraw, they can be used as a source of regular income or reinvested for returns.

Equity Investments: Rs 10 lakh
Your equity investments add growth potential. Over time, this can be a crucial source to combat inflation.

Rental Income: Rs 25,000 per month
Rental income provides a consistent cash flow, covering a large portion of your monthly expenses. This income will be valuable post-retirement to meet regular needs.

Expense and Income Projection
With monthly expenses at Rs 30,000–35,000, and rental income already covering most of these costs, your current lifestyle is well supported. However, to retire comfortably, a buffer for healthcare, travel, and inflation is necessary.

Strategy for Retirement Readiness
Based on your assets and expected needs, here’s a recommended approach to secure a steady retirement income:

Mutual Fund Strategy
Continuing your SIPs for the next 2-3 years will help grow your corpus further. Consider moving part of the equity-based mutual funds into debt funds close to retirement to reduce risk while generating returns.

Systematic Withdrawal Plan (SWP)
At retirement, you can initiate an SWP from your mutual fund corpus, providing a steady income. This strategy allows capital appreciation with controlled withdrawals, reducing the risk of prematurely depleting your funds.

Fixed Deposit Laddering
To maximise interest rates and ensure liquidity, consider a laddering strategy with your FDs. This will help meet emergency needs and take advantage of better rates.

Rental Income
Your rental income of Rs 25,000 is a reliable source. To protect it, ensure the property remains well-maintained and consider lease renewals with trusted tenants to maintain stability.

Contingency for Healthcare and Son’s Education
Health Insurance: Rs 10 lakh
Assess your current health cover, especially considering rising medical costs. A top-up or super top-up plan could add an extra layer of protection.

Son’s Education
Your son’s education may require additional funding. Any shortfall could be met by partial liquidation of non-core assets, like gold or FDs, if needed.

Estate and Legacy Planning
Your parental house and land provide substantial long-term security. Though not income-generating immediately, they offer future flexibility if liquidated or rented.

Final Insights
Your assets, income sources, and low monthly expenses indicate a strong readiness for retirement. With minor adjustments for healthcare and education, you can comfortably meet your goals. Continuing your current SIPs for the next few years and optimising your FD and MF corpus will help sustain your income post-retirement.

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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