I HAVE NOTED I THING THAT IS WHENEVER MARKET GOES UP THE ADDVERTIMENT OF "MUTUAL FUND SAHI HAI" TELECAST ON TELEVISION APPROXIMATELY 20 TO 50 TIME IN A DAY. AND WHENEVER MARKET GOES DOWN THE IS NOT SHOWN ON ANY TELEVISION BROADCAST, WHY? I AM PROFESSIONAL ACCOUNTANT, I HAVE NOTED THAT IN LAST 20 MONTH MY MANY CLINTES (APPOX. 50) MADE LOSS IN ALL OF MUTUAL FUND I.E. SMALL CAP OR LARGE CAP, OR MULTI ASSETS. WHY ? I HAVE MADE BANK FD RS 100000 BEFORE 20 MONTH AGO I HAVE MADE RETURN OF APPROX 9500. WHILE THE SAME AMOUNT INVEST IN MUTUAL FUND AT SAME TIME MAKE LOSS 500 INR, I REQUEST TO MR. SACHIN TENDULKAR, ROHIT SHARMA, AND MS DHONI , PLEASE DO NOT MISS GUIDE THE PEOPLE FOR MUTUAL FUND AT THIS TIME.

Ans:

Ans: First of all as an investor and also managing your family finances, you need to answer following questions before deciding on which instrument you want to invest

1) Goal or financial goal or purpose of doing investment.
This will matter a lot as a goal of child education and retirement needs to see with different perspective and also should have asset allocation and market cap exposure accordingly.

2) Time Horizon of your goals- this is very important as it will help you to select the asset class and it's allocation based on your time period of financial goals. This is where investor makes biggest mistake of misalignment of asset time cycle and goals time period. If you allign this properly, your journey will be quite smooth.

3) Optimum Return expectations on your capital invested-
If you are saving and investing for some better future to fulfill your goals offcourse you will ask something in return which should be respectable higher returns than inflation for long term period( more than 7 years). If you are investing in India than equity return assumptions and calculations should be based on 12% return expectations and debt it should be 6.5%. Remember that you should assume practical return assumptions ( not the highest or what your friend says) as you can put any number in the excel sheet for your mental satisfaction😃

4) Risk taken on your capital-
Risk is a very negative word being taken in india but actually it's the risk appetite and risk acceptance of an investor which makes his outcome/ returns favourable. Understand one thing that if you want high returns you have to assume high risk and there is no option for it or an investor has to be happy with sub optimal returns if he is not ready to take risk.

Risk according to me is the capacity of a person until where and when he will not have any palpation in his stomach and he can absorb the downside easily( both realised and majority of time unrealised).

You should remember one thing that after deciding on above parameters, TIME IN THE MARKET IS MORE IMPORTANT RATHER THAN TIMING THE MARKET. As an investor, wealth is created over a period of decade and have your allocation to equity accordingly and enjoy the journey of markets which is going to be up and down.

After looking at all these parameters you can think of taking allocations to equity mutual funds and decide how much allocation to equity mutual funds is comfortable to you. If you dont have any prior expertise in investing in mutual funds or equity markets, its better to hire an advisor to help you do that or start with allocation in Equity Diversified mutual funds which will help you to take exposure in stocks.

And after all that, i would say it's your behaviour and emotions management which will help you create wealth in the equity market.

I hope this helps. Happy investing

Ans: Hi Ritesh & thanks for writing to me.

Let me clarify both parts. On the AMC expense ratios, the returns shown by AMC's in their factsheets are after accounting for the impact of various expenses.

Say you invest Rs.1,00,000 in 2018 in a fund at NAV of Rs.10 and the NAV becomes Rs.20, thereby the current value of your investment becomes Rs.2,00,000 then you have made a profit of Rs.1.00,000, after all expenses that the AMC charges.

Continuing this example on taxation, the Rs.1 Lakh profit will be subject to Rs.12,500 in tax, thereby leaving you a profit of Rs.87,500, generating you a return of XIRR of 11.03%.

Do note that the numbers are illustrative & also that the first Rs.1.25 Lakh of capital gains are tax free.

Ans: Hello;

Your mutual fund monthly sip of 8 K need to be increased to 10 K ( maybe you can add 2 K additional investment in Kotak ELSS tax saver fund).

PPF and other investment should continue as planned.

This will ensure your MF corpus + PPF will reach 60 L+ in value over 12 years.

LIC policy maturity sum and NPD will be bonus.

Funds are good. No need to change.

Happy Investing;

Ans: Markets work like this only. Movement of mutual funds depends solely on the movement of stocks they have. If you horizon is long term, these daily movements doesn't matter.

Best Regards,
Reetika Sharma, Certified Financial Planner
https://www.instagram.com/cfpreetika/