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Ramalingam Kalirajan |11166 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Sep 03, 2025

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 - Aug 31, 2025Hindi

Hi sir, My name is Sowmya with age 33. I want to invest 15 k every month . For now I choose to invest parag parikh flexi direct growth 4000, motial oswal mid cap fund direct growth -3000 and nippon small cap fund-3000. Are these good to invest and can you suggest other to invest remaining amount?

Ans: You have started very well, Sowmya. You are young, disciplined, and already investing in mutual funds. That itself is a big advantage for you. At 33, time is your best friend. You have the right habit to build wealth. I appreciate that you are thinking carefully about fund choice and future growth.

Below is a full and simple 360-degree view of your situation. It will help you refine your plan with confidence and clarity.

» Understanding your current plan

– You are 33 years old.

– You want to invest Rs 15,000 every month.

– You have already picked three equity mutual funds.

– You have chosen flexi cap, mid cap, and small cap funds.

This shows you want growth, you are open to some risk, and you are aware of diversification. That is a very good start.

» Evaluating your current funds mix

Flexi cap funds are good. They can move between large, mid, and small caps. They adjust based on market conditions. They balance growth with some safety.

Mid cap funds have higher growth potential than large caps. But they can fall more during bad markets. They suit a medium to long-term goal.

Small cap funds are highest risk among equity funds. They can give very high return in some years. They can also crash hard in bad times. They need patience and a long horizon.

Your mix has all three. But it has no pure large cap exposure. That increases risk. You may not feel it now because markets are stable. But during a downturn, the portfolio may fall sharply.

» Need for proper diversification

You should hold funds across large, mid, and small caps.

Flexi cap already covers some large cap. But if its weight shifts, you may have less safety.

Mid and small caps together make your portfolio aggressive.

At 33, you can take some risk. But keep balance for smooth growth.

The best structure is a mix of large cap or large-mid blend, one flexi cap, and one mid/small exposure.

This reduces big falls and helps you stay invested even during bad markets.

» Problems with direct funds

You have chosen direct plans. Many people think direct plans are better because they have lower cost. In practice, direct plans remove professional support. Without expert rebalancing, one can overstay in wrong funds or exit in panic. Small mistakes can eat more return than the saved expense.

Regular plans through a Certified Financial Planner with MFD support offer many benefits:

– Proper selection based on risk capacity.

– Rebalancing at the right time.

– Behaviour control during market panic.

– Tax optimisation with planned switches and withdrawals.

The small trail fee is like insurance for your money decisions. It often protects more than it costs.

» Problems with index funds and ETFs

Sometimes people suggest index funds or ETFs. They look cheap and simple. But they only copy the market. They cannot adjust for bad sectors or bubbles. They give average return before cost. They can crash fully with the market and have no active defence.

Actively managed funds with skilled managers can shift money to stronger stocks, reduce risk, and capture opportunities. Over time, this flexibility can improve both return and safety. That is why for your long-term wealth, actively managed funds are better.

» Building a complete monthly SIP plan

Keep one large or large-mid blend fund for base stability.

Keep one flexi cap fund for balanced growth.

Keep one mid cap fund for extra growth but moderate risk.

Keep one small cap fund only in small proportion.

Avoid too many funds. Three to four are enough.

Allocate higher share to large or flexi cap. Smaller share to mid and small caps.

For example (not actual scheme names, only concept):

– Large cap or large-mid blend: About 40% of total SIP.

– Flexi cap: About 30% of total SIP.

– Mid cap: About 20% of total SIP.

– Small cap: About 10% of total SIP.

This keeps risk aligned with growth need.

» Adjusting based on future goals

If your goal is retirement after 20 years, you can stay high in equity.

If you have short goals (less than 7 years), reduce equity for that part. Use debt funds for short goals.

If you plan for a house, child education, or other big life event, separate those goals. Each goal should have its own mix.

Never mix short-term money with long-term aggressive funds.

» Importance of review

Review portfolio once a year.

Check fund performance against peers and category average.

Do not chase top performers every year. Long-term consistency matters more.

If a fund underperforms consistently for 2–3 years, consult your Certified Financial Planner and replace it.

Adjust asset allocation when life stage changes, like marriage, child, job shift, or nearing retirement.

» Building safety net alongside growth

Keep an emergency fund. At least 6 months of expenses in liquid or ultra-short-term debt funds.

Keep adequate health insurance. Company cover is not enough. Buy a personal policy.

Take term insurance based on income, family, and liabilities.

Protecting family is part of wealth building. Without it, all investment plans become fragile.

» Tax awareness in mutual funds

When you sell equity mutual funds, LTCG above Rs 1.25 lakh is taxed at 12.5%.

STCG on equity is taxed at 20%.

Debt mutual funds, both LTCG and STCG, are taxed at your income slab.

Plan redemptions smartly. Use tax-free thresholds carefully.

Use SWP for regular income later. It can reduce tax bite compared to full redemption.

» Emotional discipline matters

Markets will go up and down. Do not stop SIPs during a fall. Falls are opportunities. Units bought cheap grow faster when markets recover. Stopping SIPs at that time is a common mistake.

Your wealth journey is like growing a tree. Water it every month. Prune only when needed. Do not uproot it during storms.

» Finally

You are on the right path, Sowmya. You have started early, which is a gift. You have the discipline to invest every month. You only need small adjustments to reduce risk and improve balance.

Shift from direct to regular with a Certified Financial Planner. Add a stable large-cap or large-mid blend fund. Reduce heavy weight in mid and small caps. Keep reviewing once a year.

This simple discipline, done for the next 15–20 years, can create huge wealth. It can also give peace of mind, which is as valuable as money itself.

Stay patient, stay diversified, and keep guidance by your side. The journey will reward you well.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

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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