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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Dec 14, 2021

Mutual Fund Expert... more
Partha Question by Partha on Dec 14, 2021Hindi
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I am Partha from Kolkata, my age is 30.

I want to invest Rs 3,000 and Rs 2,000 in SIP modes in two mutual funds for 20-25 years.

Please suggest some best, fundamentally strong mutual funds for long term, where I can get a good return.

Ans: You may consider Axis ESG Equity Fund (Growth) and Motilal Oswal Focused 25 Fund (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  |7100 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

Asked by Anonymous - Jul 17, 2024Hindi
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Hello, I am 32 years old and I started investing SIP 2 years ago and currently invested 5k in PGIM India Midcap and 5k in Mirae Asset and lump sum of 2.5L in Quant ELSS. I am planning to invest another 5k (total 15k pm) in SIP. Could you please suggest me any mutual fund to invest for long term ?
Ans: Financial Snapshot and Goals
Age: 32 years

Current SIP Investments: Rs 5,000 each in two mutual funds

Lump Sum Investment: Rs 2.5 lakhs in ELSS

Planned SIP Increase: Rs 5,000 (total Rs 15,000 monthly)

You have been investing for two years and are planning for the long term. Your current investments show a good mix of mid-cap and ELSS funds.

Current Investment Assessment
Diversification:

You have diversified your investments in mid-cap and ELSS funds. This is a good strategy.
Performance Monitoring:

Regularly check the performance of your investments. Ensure they align with your financial goals.
Risk Management:

Mid-cap funds can be volatile. Ensure you are comfortable with the risk level.
Additional Investment Considerations
Disadvantages of Index Funds:

Index funds passively track the market. They might not outperform during market downturns.

Actively managed funds have professional fund managers. They aim to outperform the market.

Disadvantages of Direct Funds:

Direct funds may seem cheaper but lack professional advice.

Investing through a Certified Financial Planner (CFP) provides tailored advice and support.

Recommended Investment Strategy
Diversification:

Add a large-cap fund for stability. They tend to be less volatile than mid-cap funds.

Consider a balanced or hybrid fund. They offer a mix of equity and debt for balanced growth.

Actively Managed Funds:

Actively managed funds have expert fund managers. They aim to beat market returns.

They provide better risk management and potential for higher returns.

Professional Guidance:

Investing through a CFP ensures your investments are well-managed.

Regular funds through a Mutual Fund Distributor (MFD) with CFP credentials offer ongoing support.

Actionable Steps
Increase SIP Contributions:

Start with an additional Rs 5,000 SIP in a large-cap or balanced fund.

Gradually increase your SIP contributions as your income grows.

Seek Professional Advice:

Consult a CFP to review your investment portfolio. They can help tailor your strategy to your goals.
Regular Monitoring:

Monitor your investments regularly. Adjust based on performance and market conditions.
Long-Term Financial Planning
Goal Setting:

Define your financial goals. This could include retirement, buying a house, or children's education.

Align your investment strategy with these goals.

Risk Management:

Ensure your portfolio has a good mix of high and low-risk investments.

Diversify across different asset classes to manage risk.

Review and Adjust:

Periodically review your investment portfolio. Make adjustments as needed to stay on track.
Final Insights
You have a solid foundation with your current investments. By increasing your SIP contributions and diversifying further, you can achieve long-term financial growth. Seeking professional advice from a Certified Financial Planner will help optimize your investment strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7100 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Oct 15, 2024

Money
Hi I am 35 years old , I want invest 7500 monthly SIP in mutual funds pls suggest me the right mutual funds for long term investment.
Ans: At 35 years old, it’s essential to plan investments with a long-term focus. Investing Rs. 7,500 per month in mutual funds through SIP for the long term can help you build significant wealth over time. Your goal should determine how you allocate these funds among different categories of mutual funds.

Key points to consider:

How long do you want to invest?
What is your risk tolerance?
What are your future financial needs, such as retirement, children’s education, or any other goals?
Since you’re considering long-term investment, a mix of equity mutual funds with good growth potential would be the ideal choice. Equity funds have shown the ability to outperform other asset classes over a longer duration.

Let’s explore how you can achieve this with mutual funds.

Understanding the Importance of Diversification

Diversification is the key to a well-rounded investment strategy. For your Rs. 7,500 SIP, dividing your investments across different types of mutual funds is essential to minimize risk while maximizing returns.

Here’s how diversification can help:

Equity funds provide higher returns over the long term but come with higher risk.

Debt funds offer stability and lower risk but might give comparatively lower returns.

For a long-term SIP, focusing on equity funds can offer you the growth needed, but you can also add some debt funds for stability.

Opting for Actively Managed Funds

Actively managed mutual funds allow a professional fund manager to pick stocks and assets that can outperform the market. The goal of actively managed funds is to earn higher returns than an index. Unlike index funds that follow a specific benchmark, actively managed funds can adjust the portfolio depending on market conditions. This makes them better suited for long-term growth when compared to index funds.

Why should you prefer actively managed funds over index funds?

Higher potential returns: Fund managers can pick promising stocks.
Flexibility: They can adjust to market changes faster.
Active risk management: Professional fund managers manage risks actively.
Investing in regular funds through a Certified Financial Planner (CFP) ensures you get personalized advice. You also benefit from professional expertise, and regular funds give you access to this expertise, which is essential for long-term success.

Allocation Strategy Based on Your Risk Appetite

When investing for the long term, balancing risk and reward is critical. Here’s a strategy to allocate your Rs. 7,500 monthly SIP:

Large-Cap Funds: These invest in well-established companies with a strong market presence. They provide stability and consistent growth over time. A large portion of your SIP, say Rs. 3,000, can go into these funds for a solid foundation.

Mid-Cap Funds: These funds invest in medium-sized companies that have growth potential. These companies are riskier than large-cap companies, but the returns can be higher. You can allocate Rs. 2,000 to mid-cap funds to add growth potential.

Small-Cap Funds: Small-cap companies can offer very high returns but are volatile and come with higher risk. Allocating Rs. 1,000 to small-cap funds can provide a high-growth kicker.

Flexi-Cap Funds: These funds invest in companies of all sizes based on market conditions, making them more versatile. You can allocate Rs. 1,500 to flexi-cap funds for flexibility and a diversified approach.

This approach ensures your investment is spread across various sectors and sizes of companies. It balances risk and reward while aiming for long-term growth.

Why You Should Avoid Index Funds

Index funds may seem appealing because of their low cost, but they come with limitations. Index funds passively track a benchmark like the Nifty 50 or Sensex. As a result, they do not aim to beat the market, only match its performance.

Disadvantages of index funds:

Lack of flexibility: They can’t adjust to market changes.
Lower potential returns: Over the long term, actively managed funds have the potential to outperform index funds.
No risk management: Index funds don’t adjust to market downturns, so during market corrections, they might underperform.
Given your long-term horizon, actively managed funds are better suited because they provide more opportunities for superior returns.

Benefits of Regular Funds over Direct Funds

Some investors prefer direct funds for lower expense ratios. However, investing through a regular plan with the help of a CFP offers significant benefits. A CFP ensures that your investments align with your long-term financial goals and risk profile.

Benefits of regular funds:

Expert guidance: Investing through a CFP ensures you have professional advice.
Timely rebalancing: A CFP can help with portfolio rebalancing as market conditions change.
Regular monitoring: You get periodic reviews of your portfolio.
Personalized advice: Investments are chosen based on your specific needs.
While direct funds may have lower costs, the added value you receive from professional management far outweighs this small expense.

Why Avoid ULIPs and Investment-Linked Insurance

While you may hear about market-linked insurance products such as ULIPs, they are not ideal for long-term wealth creation. The costs involved are much higher compared to mutual funds. ULIPs combine insurance with investment, which means you pay for both, often leading to lower returns. Mutual funds are a better vehicle for wealth creation over 25 years.

Disadvantages of ULIPs:

High charges: ULIPs have higher fees, reducing overall returns.
Lock-in period: You are locked into the policy for at least 5 years.
Lower flexibility: You don’t have the freedom to switch easily between investment options.
Taxation on Mutual Funds

It's essential to understand the tax implications of mutual funds.

For equity mutual funds, long-term capital gains (LTCG) are taxed at 12.5% if your gains exceed Rs. 1.25 lakh in a financial year. Short-term capital gains (STCG) are taxed at 20% if you sell within one year.

For debt mutual funds, both LTCG and STCG are taxed according to your income tax slab. This makes debt funds slightly less tax-efficient compared to equity mutual funds.

Knowing these tax rules helps you plan your withdrawals effectively, especially when you have built up a significant corpus over time.

Systematic Investment Plan (SIP) for Discipline

SIP is an excellent way to build wealth over time. By investing Rs. 7,500 every month, you are using the power of compounding to grow your wealth. SIPs help in:

Averaging market volatility: You buy more units when prices are low and fewer when prices are high.

Creating discipline: SIPs ensure regular investment without needing to time the market.

Long-term growth: Compounding over time can turn small monthly investments into a significant corpus.

Regular Review of Investments

Reviewing your investments regularly ensures they align with your changing financial goals. Every 6 months to a year, sit with your CFP to assess your portfolio's performance. Based on market conditions and your evolving needs, adjustments can be made to enhance returns or manage risks.

Key points for a review:

Rebalancing: Ensure that the asset allocation matches your original plan.

Performance tracking: Evaluate if any fund underperforms and needs replacement.

Future needs: Align your portfolio with upcoming financial goals, such as buying a home or retirement planning.

Finally

At 35, you have the advantage of a long investment horizon, which can significantly increase your wealth through mutual funds. By sticking to a disciplined approach and using SIPs, you can maximize your returns. Focus on actively managed funds for their higher potential and flexibility. Avoid ULIPs, annuities, and index funds for your long-term goals.

Also, remember the importance of reviewing your portfolio regularly and maintaining diversification. This will give you the best chance of achieving a substantial corpus.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

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Anu Krishna  |1321 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 22, 2024

Asked by Anonymous - Jul 28, 2024Hindi
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Hi sir, I am 40 yr old having work-expereince of 10 yrs behind me in ITes, customer support & service, banking and sales & marketing (product). My life till now can easily be converted into a bollywood biopic having its own twist & turns, roadblocks, struggles laughter, joy and sorrow. Change is the only constant in life and that exactly applies in my case. Although it has been a satisfactorily life till now given that I know myself and how I lead my life. Whenever I start to read something new I feel like going deep into it. I am also easily attracted to novel things & concepts. I usually get into procastination mode whenever I come across something entirely new and start to imagine myself trying it out in realilty.Why does this happens? Why can't I focus on one single thing at a time and see it to completion? I know in todays world generalists are looked down upon and it is an era of specialists, experts and professionals having good domain knowledge of their area of work. It is always better to be an expert than be a jack of all trades (which seems very filmy nowadays where a hero is expected to do everything on his own). Lately I have developed an avid interest in technology and i keep on reading various articles & books on IT and technology. I am also pursuing an online cyber security course from Great Learning Institute, Bangalore. I want to know am I going in the correct direction in life or is it something else I should do which ensures more satisfaction in life? Lately, I have become bit irriiated as well due to the above reasons as I tend to do multiple things at a time (multitasking). My parents are also fed up of me now. My mother keeps nagging me all day.I dont know how to really deal with her, as she always finds perfection in everything. That becomes too much at times. Does this happens in every household? Should I go out and travel to some place in order to temporarily escape from all this? Kindly suggest me some course of action. Pls answer. Thanks
Ans: Dear Anonymous,
You will be distracted and keep trying new things until you actually figure out what you want for yourself in life.
- How does you life seem like a few years down the line?
- What must you do NOW to actually get to where you want in life?

And to answer these questions, you first need to identify a strong, solid goal in life. Either you work with a mentor or your boss or a friend or an expert who can help you identify your goal and purpose. That might help you stay the course and actually streamline your thoughts, your job and your daily life.
Travel used for learning is great but using it to escape only worsens things...So, work on Goal-Setting!

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

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Asked by Anonymous - Nov 16, 2024Hindi
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Hi , I am a professor mech engineer , after death of my wife and due to having 5 year girl baby I planned for 2 nd marriage as I live alone away from home town because my of job with my little baby . I accepted a widow having 2 child ,she was working in a govt job 250 km away , after ensuring and agreeing her possibility of transfer and job vacancy @govt office near my house and ensuring she agreed that she will come to live with me along with her 2 kids and my little baby as her trasfer was due in comming few months . We lived apart during her job at 250 km away.,while meeting on weekly offs 6 /7 time in 6 months , then she take 360 degree u turn and said she will not get job transfer to my place and get her trasfer in other dept. in same previous office. And started telling many reasons like she will loose her children's inheritance in her in-laws property ,she will loose promotion , kids Don't want trasfer , and said we will live apart forever . This was contradictory to earlier agreed things .and my my purpose to live in family with my baby not fulfilled , so after long ruckus ,I mutually got divorce from her , Then After divorce I decided to marry non working women having no child and don't expect child as I am @48 year old and tired of living alone and managing job ,girl , house chores . I married to a divorcee girl from Pune ,she was BA first year college drop out girl of 44 yr age after 6 months of long dating on week ends . During 6 months I tried to know her indepth but was don't used to talk much as I was trying to know her true nature, we visited many places ,movies . She seemed perfect as per my requirement of girl wanting no child , and she is house wife . after marriage she behave well for 1 st week ,then she started trouble to hate my baby ( became kaikai )on pety things , she want my baby to house chores at the cost of her important year of 10th std study . She don't liked me taking tution of girl , she didn't like if I help my girl any way . She don't like if I spent some money on my girl . She used to fight all night and don't let me sleep . Now she stated demanding that she want baby , though I was against and b4 marriage agreed to not have any more child due to old age ,cost ,and no personal time for self , then I agreed to have child but b4 that I got her and my fertility tested ,she had weak eggs and syst on her reproductive organs and doc warned to not go for pregnancy due to risk and probability of unhealthy baby birth , but she kept repeating That she want child we consulted 4 Drs. She used to fight and go to her mother's home for 2/4 months after living with me for 2/3 days only . Now she wants divorce , and asks me to keep my girl in hostel if I want her in my life . This Ramayan has left me baffled , What should I do ??? .....
Ans: Dear Anonymous,
The reason to marry for you mainly has been companionship, a mother for your daughter...
And marriage is not a transaction BUT a meeting of minds...when there is no compatibility, there is no space for agreeing on the same things or wanting to make things work which is possibly what has happened with your 2nd and 3rd marriage.
If you want this marriage to work, there has to be an equal commitment by both of you, so, start by emotionally bonding first. Slowly build on this by making goals for the marriage and the future...your only goal can't be mother for your child...not all women are going to readily accept this and some may even falter along the way. Allow the lady and your daughter to bond together for sometime so they develop a unique relationship...
Understand that transactional relationships do not last; so, invest enough time in building trust in that companionship for it to become something meaningful

All the best!
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Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

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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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