Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on May 12, 2021

Mutual Fund Expert... more
Susheel Question by Susheel on May 12, 2021Hindi
Listen
Money

I have a plan to invest Rs. 5000/- each in the following funds on a monthly basis for the next 5 years for the purpose of owning a house in the next 5 or 7 years. Could you please give your advice?

PGIM India Global Equity Opportunities Fund - Growth

Kotak NASDAQ 100 Fund of Fund - Growth

ICICI Prudential Technology Fund - Growth

Tata Digital India Fund -- Growth

Ans: Please continue; these are decent funds

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.
Money

You may like to see similar questions and answers below

Ulhas

Ulhas Joshi  |279 Answers  |Ask -

Mutual Fund Expert - Answered on Mar 06, 2023

Listen
Money
Sir, I am 27 years old and my goal is to buy house of 1 cr after 5 years and collect good amount of money for its down payment at least 50% of it I am planning to start following sip HDFC nifty 50 index fund -15000 HDFC nifty next 50 index fund -15000 Canara robecco ELSS fund -4000 Quant tax plan direct growth -4000 Canara robecco small cap fund-2500 Quant small cap/axis small cap fund -2500 Should I invest more than above specified in funds . Please comment on selection of mutual fund and amount and changes in fund and amount to achieve goal. Thankyou in anticipation.
Ans: Hi Murgendra, thank you for writing in.

I notice you are currently investing around 70% of your funds in index funds, HDFC Nifty 50 & HDFC Nifty Next 50. With this, your portfolio returns will mostly mirror index returns.

You can consider investing Rs.10,000 in HDFC Nifty 50 Index Fund and Rs.10,000 in HDFC Nifty Next 50 Index Fund & invest the balance Rs.10,000 as follows:
1-SBI Magnum Midcap Fund-Growth Rs.5,000
2-Franklin India Smaller Companies Fund- Growth Rs.5,000

This will give you more midcap and smallcap exposure that have the potential to outperform the index and help you generate higher returns.

To create a corpus of Rs.50 Lakh in 5 years, you will need to invest around Rs.60,500 per month, that is increase your SIP’s by Rs.17,500. You need not invest in any new schemes, but simply increase the SIP amounts in the same proportion.

Annual step ups of around 10% will help you achieve your goals faster.

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 02, 2024

Asked by Anonymous - May 02, 2024Hindi
Listen
Money
Hi, I have 40 lakhs in hand coming from ancestors property and same saving. I need to purchase a home in Delhi NCR but current real estate prices are way above my budget even if I take loan of 50 lakhs. I am thinking of investing this amount in mutual funds having diversified balanced portfolio of equity and debt sectors for a timeline of 5-8 years. I am hoping in 5-8, I will enough amount for atleast 60% down payment on my house. I am assuming a return of 12-15%. Can you suggest the approach I should use to reach my goal? Do you recommend financial advisory services as well.
Ans: Investing your inheritance of 40 lakhs in mutual funds with a diversified balanced portfolio is a prudent approach to potentially grow your savings for a future down payment on a home in Delhi NCR. Here's a suggested approach:

Define Your Investment Horizon and Risk Tolerance: Given your goal of accumulating a down payment within 5-8 years, it's crucial to align your investment horizon with the timeline of your objective. Also, assess your risk tolerance to determine the appropriate allocation between equity and debt funds.
Asset Allocation: Since your investment horizon is relatively short-term (5-8 years), consider a balanced portfolio with a mix of equity and debt funds. Allocate a larger portion to debt funds to mitigate the impact of market volatility and ensure capital preservation. A typical allocation could be 60% in debt funds and 40% in equity funds.
Choose Mutual Funds: Select mutual funds with a proven track record of delivering consistent returns over the long term. Opt for diversified equity funds with exposure to large-cap and mid-cap stocks for growth potential, along with debt funds such as short-duration or dynamic bond funds for stability.
Systematic Investment Plan (SIP): Invest your lump sum amount through SIPs to benefit from rupee-cost averaging and reduce the impact of market volatility. Set up a systematic investment plan to invest a fixed amount at regular intervals, ensuring discipline and consistency in your investment approach.
Regular Monitoring and Review: Monitor the performance of your mutual fund investments regularly and review your portfolio periodically to ensure it remains aligned with your goals and risk tolerance. Consider rebalancing your portfolio if necessary to maintain the desired asset allocation.
Regarding financial advisory services, consulting with a Certified Financial Planner can provide personalized guidance tailored to your financial goals, risk tolerance, and investment horizon. A financial advisor can help you develop a comprehensive investment plan, navigate market fluctuations, and make informed decisions to achieve your objectives.

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 19, 2024

Asked by Anonymous - Jun 10, 2024Hindi
Listen
Money
Hi..I am 49 years old I have Stocks of Rs.1.40 Crores, PPF Rs. 20 Lakhs, EPF Rs.25 Lakhs, Rs 20 Lakhs in SGV and Mutual Fund., Real Estate of Rs.55 Lakhs Purchase value with a loan of Rs.24 Lakhs outstanding. I want to purchase a house of Rs.1.60 Crore. Monthly avilable to investment 1.5 lakhs Job is at stake now..Should I purchase the house for staying AT 58 YEARS if job is not yhere in 8 months down the line. Also if I purchase the 2nd house for staying, should I sell the first house which I can get Rs.35 to Rs.40 lalhs after paying my loan and pay for 2nd house or invest in mutual fud and withdraw from the corpus. Secondly. Should I sell part of my stock to pay part of my 2nd house purchase or keep the sale proceeds in Mutual fund and then do a sWP and pay the 2nd house. Thirdly, Stocks I have got about 15 to 10 percent returns in last 2 years Should I keep the complete stock or take out 40 or 50 percent and invest in Mid cap and small cap mutual funds? Fourth If you want to invest 50 lakhs in Small and Mid cap funds..Is it better to go for 4 funds (2 in each category )or 2 funds ( one is each category)
Ans: Current Financial Situation
Assets
Stocks: Rs 1.40 crores
PPF: Rs 20 lakhs
EPF: Rs 25 lakhs
SGBs: Rs 20 lakhs
Mutual Funds: Rs 20 lakhs
Real Estate: Rs 55 lakhs (purchase value) with an outstanding loan of Rs 24 lakhs
Income and Investment Capacity
Monthly Available for Investment: Rs 1.5 lakhs
Job Security: At risk, with potential job loss in 8 months
Goals and Questions
Purchasing a House for Rs 1.60 Crores
You plan to buy a second house for Rs 1.60 crores. You are considering selling your current house and using the proceeds, along with your investments, to fund the purchase.

Key Questions
Should I purchase the house for staying at 58 years if job is not secure?
Should I sell the first house and use the proceeds for the second house, or invest in mutual funds and withdraw from the corpus?
Should I sell part of my stocks to pay for the second house, or keep the proceeds in mutual funds and use SWP?
Should I move some stock investments to mid-cap and small-cap mutual funds?
Is it better to invest Rs 50 lakhs in small and mid-cap funds across 2 or 4 funds?
Detailed Analysis
Purchasing the House
Job Security and Financial Stability
Given the potential job loss, ensure financial stability first. Buying a house worth Rs 1.60 crores may strain your finances if your job is at risk.

Using Proceeds from the First House
Selling the First House
Proceeds: Selling the first house can get you Rs 35-40 lakhs after paying off the loan. This can be used towards the purchase of the second house.
Investing in Mutual Funds
Investing Proceeds: If you invest the proceeds in mutual funds, you can withdraw through a Systematic Withdrawal Plan (SWP) to fund the second house. This approach can offer better returns compared to keeping the funds idle.
Selling Stocks for the Second House
Selling Stocks
Partial Sale: Consider selling part of your stock portfolio. This can provide liquidity for the house purchase. However, do not liquidate all stocks, as they offer growth potential.
Investing in Mutual Funds
SWP Strategy: Transfer the sale proceeds to mutual funds and use an SWP for steady payments towards the house. This offers tax efficiency and better returns.
Stock Portfolio Adjustment
Current Returns
Returns: Your stocks have given 10-15% returns over the last two years. This is a decent performance.
Diversifying to Mutual Funds
Reallocation: Moving 40-50% of your stock investments to mid-cap and small-cap mutual funds can diversify your risk and offer higher growth potential.
Investment in Mid-Cap and Small-Cap Funds
Number of Funds
4 Funds Approach: Invest Rs 50 lakhs across 4 funds (2 in mid-cap and 2 in small-cap). This diversifies your risk and provides exposure to different fund management styles.
Recommendations
Prioritise Financial Stability
Ensure you have enough liquidity and emergency funds, given your job risk.
Avoid making large financial commitments like purchasing a new house if job security is uncertain.
Using First House Proceeds
Sell your first house and use the proceeds towards the second house.
If not buying immediately, invest the proceeds in mutual funds and use SWP for payments.
Managing Stock Investments
Sell a portion of your stocks to generate liquidity.
Reinvest in mutual funds, especially mid-cap and small-cap, for better diversification and potential returns.
Mutual Fund Strategy
Invest Rs 50 lakhs in 4 funds (2 mid-cap, 2 small-cap) for balanced diversification.
Ensure the funds are actively managed for better performance.
Final Insights
Maintain financial stability given your job situation. Diversify your investments to reduce risk. Prioritise liquidity and ensure you have enough funds to cover potential job loss. Consider professional advice for a tailored strategy.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 04, 2024

Asked by Anonymous - Aug 04, 2024Hindi
Listen
Money
Hello sir. I am 31years old women wanted to understand some good investments funds for both long and short term I want to buy a house in next 5yrs(budget 35-40lacs) so to make it possible in a state of Mumbai Which plans will be best and for same how much we need to invest with minimal risk.
Ans: You are 31 years old.
Your goal is to buy a house in Mumbai in the next 5 years with a budget of Rs. 35-40 lakhs.
You seek investments for both long-term and short-term with minimal risk.
Financial Planning for House Purchase
Short-Term Investment Strategy (5 Years)
Recurring Deposits (RDs):

Suitable for disciplined savings.
Low risk and guaranteed returns.
Ideal for accumulating funds over a fixed period.
Bank Fixed Deposits (FDs):

Safe investment with fixed returns.
Opt for a laddering strategy to ensure liquidity.
Debt Mutual Funds:

Invest in high-quality corporate bonds and government securities.
Lower risk compared to equity funds.
Suitable for generating stable returns with moderate risk.
Suggested Allocation for Short-Term
Recurring Deposits (RDs): 30%

Provides disciplined savings with fixed returns.
Bank Fixed Deposits (FDs): 40%

Safe investment with fixed returns.
Ensure liquidity by laddering FDs.
Debt Mutual Funds: 30%

Invest in high-quality debt funds for stability.
Aim for moderate returns with lower risk.
Calculating Monthly Investment for House Purchase
Assuming you need Rs. 40 lakhs in 5 years.
Recurring Deposits (RDs): Rs. 12 lakhs
Monthly investment: Rs. 20,000 (approx.)
Bank Fixed Deposits (FDs): Rs. 16 lakhs
Monthly investment: Rs. 27,000 (approx.)
Debt Mutual Funds: Rs. 12 lakhs
Monthly investment: Rs. 20,000 (approx.)
Long-Term Investment Strategy
For Retirement and Other Long-Term Goals
Public Provident Fund (PPF):

Safe investment with tax benefits.
Long lock-in period suitable for retirement savings.
Employee Provident Fund (EPF):

Ensure regular contributions if employed.
Provides long-term growth with tax benefits.
Equity Mutual Funds:

Invest in high-quality actively managed funds.
Aim for long-term growth with moderate to high risk.
Suitable for wealth creation over 10-15 years.
Systematic Investment Plan (SIP):

Regular investment in equity mutual funds.
Helps in rupee cost averaging and disciplined investing.
Suggested Allocation for Long-Term
Public Provident Fund (PPF): 20%
Provides safe returns with tax benefits.
Employee Provident Fund (EPF): 20%
Ensure regular contributions for long-term growth.
Equity Mutual Funds: 60%
Invest in high-quality actively managed funds.
Aim for wealth creation over the long term.
Final Insights
For Short-Term: Invest in recurring deposits, fixed deposits, and debt mutual funds for house purchase.
For Long-Term: Invest in PPF, EPF, and equity mutual funds for wealth creation and retirement.
With disciplined investing and regular reviews, you can achieve your financial goals with minimal risk.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ravi

Ravi Mittal  |431 Answers  |Ask -

Dating, Relationships Expert - Answered on Nov 22, 2024

Asked by Anonymous - Nov 22, 2024Hindi
Listen
Relationship
A bit long story I'm 21 student preparing for medical competative entrance exam for past 3 years (21-24).2 year ago this phase I was in a long distance relationship for 4 months with a girl I met in my class .But it didn't last long due to the problems created due to distance as she couldn't understand myself and I couldn't understand herself.so there was a misunderstanding and I couldn't hold on as I was in heavy pressure by exams and financial problems.so I couldn't handle and I felt like too early and broke up with her by losing my mind.she was completely disappointed as I didn't speak to her for more than an year due to one more year preparation.i missed her very much but I didnt tell her.I missed govt seat in border mark and the same year she got into a relationship with another guy in her class.i don't blame her. But I feel like my entire life is shattered and I couldn't move on from that girl till now.I couldn't concentrate on my career too.im kind of person who is always confident in all aspects but I have totally lost my mind .I can see that in an danger situation as age is running and family pressure, everyone of my classmates are far ahead of me I couldn't withstand this situation and couldn't make proper decision in any aspect. Mam please help me out.
Ans: Dear Anonymous,
I understand your concerns. The first step is to focus on moving on; she has, and you should too. Prioritize your career, your family, and your future. Next, what has happened to your career progress has already happened. It's unfortunate, but there's no way to change that. But give yourself a second chance; work harder and achieve greater things than you even imagined before. Trust me, you are not the only person who is standing in a situation like this. Many have, and many more will. But the ones who have passed this time will give you the same advice that I did.

Best Wishes.

...Read more

Milind

Milind Vadjikar  |682 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 22, 2024

Asked by Anonymous - Nov 13, 2024Hindi
Listen
Money
Sir, I am 40yrs old. Having monthly takehome salary of 1.1 lakh and rental income of 36000. My investment are 2 flats worth of 1cr. 4 plots in Bhubaneswar worth of 2crs. EPF balance 50 lakh, LIC policies worth of 16 lakhs, NPS worth of 10 lakhs. My monthly saving commitments are - EPF (employee+employer) 28000 NPS 15000 MF 7500 Gold scheme 5000 Financial burden - HL emi of 24000 Monthly expanses 50000 I would like to retire at 50. Please advise for retirement plan with life expectancy of 80yrs.
Ans: Hello;

The value of your investments after 10 years;

A. EPF Corpus+Contribution: 1.6 Cr
B. NPS Corpus+Contribution: 53 L
C. MF(sip) + Gold(sip): 25 L
D. Real estate (land): 3.26 Cr

So sum of A, C & D gives us a corpus of 5.11 Cr

Since you will withdraw NPS before 60 age 80% of corpus will go into annuity while 20% will be available to you.

So you may expect monthly income of around 21 K from annuity(42.4 L).

Balance 10.6 L get added to 5.11L taking your total corpus to ~ 5.2 Cr.

If you invest 5 Cr in a conservative hybrid debt fund and do a SWP at the rate of 3%, you may expect a monthly income of around 1.1 L(post-tax).

Add your monthly rental income of 36 K(No growth factored) and annuity income of 21 K to this and you have total monthly income of 1.67 L after 10 years.

Your current monthly expenses of 50 K after 10 years would be around 90 K and 1.6 L after 20 years.

Considering return of around 7-7.5% from the conservative hybrid debt fund you will still generate inflation adjusted return at 3% SWP after 80 years of age.

Assumptions:
Inflation rate-6%
Return from EPF-8%
Return from NPS-9%
Return from MF-10%
Return from gold-7%
Return from Land-5%
Annuity rate-6%

The spare flat is not considered in this because it will continue to yield you rental income in retirement.

Since real estate(land) returns may fluctuate over 10 years suggest to increase MF sip(6X) as a back-up, also in this case you may decide to retain & invest in NPS upto 60 age.

Of course MF returns are also not assured but you are improving the odds by backing two appreciable assets(RE & equity) over long-term.

Happy Investing;
X: @mars_invest

...Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 22, 2024

Money
My age 62, male, getting rental income Rs. 90k nett. Already subscribing 12.5k in PPF for the past 2 1/2 years. No other investments. My target is 5 crores in 10 years. I already have Mediclaim Rs.50 lakhs for me & wife . Please advice me what to do.
Ans: Your current financial foundation is strong and shows promise:

A rental income of Rs. 90,000 per month provides consistent and predictable cash flow. This stability can serve as the backbone for your investment strategy.

PPF contributions of Rs. 12,500 per month for 2.5 years reflect disciplined saving. However, its returns may be insufficient to achieve a high-growth target like Rs. 5 crores in 10 years.

A robust Mediclaim policy of Rs. 50 lakhs for you and your wife ensures adequate health coverage. This safeguard allows you to focus on wealth-building without worrying about medical emergencies.

Despite these positive factors, achieving Rs. 5 crores in 10 years requires a carefully crafted and growth-oriented strategy.

Defining and Prioritising Your Financial Goals
Achieving Rs. 5 crores is ambitious yet achievable with a focused approach:

Define this target as your primary financial goal over the next decade.

Break it into manageable milestones: for example, Rs. 50 lakhs every 1-2 years in cumulative investments and growth.

Prioritise high-return investments that align with your risk tolerance and financial capacity.

Optimising Existing PPF Contributions
While PPF is a secure investment, its growth potential is limited:

Returns: PPF currently offers an interest rate of approximately 7-7.5%, which barely outpaces inflation.

Contribution Review: Consider capping your PPF contributions at Rs. 1.5 lakh annually (to utilise the Section 80C benefit). This ensures that excess funds are redirected to higher-return investments.

PPF can serve as a low-risk component of your portfolio but should not dominate your investment strategy.

Building a Diversified Investment Portfolio
A diversified portfolio will provide a balance of risk and reward. Include the following components:

1. Equity Mutual Funds for Growth
Equity mutual funds are essential for achieving high returns over the long term:

Large-Cap Funds: These invest in established companies and offer stability with moderate growth. They are ideal for a portion of your portfolio to reduce risk.

Multi-Cap or Flexi-Cap Funds: These provide exposure to companies of all sizes, offering growth and diversification.

Sectoral and Thematic Funds: Avoid these unless you have a high risk tolerance and understand market dynamics.

ELSS Funds: These not only provide tax savings under Section 80C but also deliver market-linked returns.

Why Avoid Index Funds?

Index funds may offer simplicity and lower expense ratios, but they lack flexibility. They cannot adapt to market conditions or capitalise on outperforming sectors. Actively managed funds, on the other hand, have the potential to outperform the market, especially in a developing economy like India.

Start with a Systematic Investment Plan (SIP) in selected funds to build wealth steadily.

2. Debt Mutual Funds for Stability
Debt funds add stability to your portfolio and reduce overall risk:

Choose funds with low credit risk and moderate duration to ensure safety and predictable returns.

Debt funds are suitable for short- to medium-term goals or as a fallback during market corrections.

Taxation Note: Both LTCG and STCG on debt funds are taxed as per your income tax slab. This should be factored into your planning.

3. Balanced Advantage Funds
Balanced advantage funds (BAFs) dynamically allocate assets between equity and debt. They:

Provide exposure to equity while minimising downside risk.

Offer a suitable option for someone nearing retirement but seeking growth.

4. Gold Investments for Diversification
Allocate a small portion (5-10%) of your portfolio to gold:

Gold serves as a hedge against inflation and currency depreciation.

Choose gold ETFs or sovereign gold bonds for ease of liquidity and better returns.

Emergency Fund Creation
Having an emergency fund is non-negotiable:

Maintain at least 6-12 months of expenses in liquid investments like liquid mutual funds or high-interest savings accounts.

This ensures liquidity for unforeseen events without disturbing your long-term investments.

Focus on Retirement Planning
At 62, balancing growth and safety becomes critical:

Estimate your monthly retirement expenses, considering inflation over the next 10-15 years.

Your target of Rs. 5 crores should primarily serve as your retirement corpus.

Allocate assets thoughtfully:

60-70% in equity funds for growth.
30-40% in debt funds for stability.
Periodically rebalance your portfolio to maintain this allocation.

Strategic Tax Planning
Tax efficiency can significantly impact your returns:

Continue using Section 80C to its full potential, including ELSS funds and PPF.

Consider the National Pension System (NPS) for an additional Rs. 50,000 deduction under Section 80CCD(1B).

Be mindful of the new taxation rules for mutual funds:

Equity Mutual Funds: LTCG above Rs. 1.25 lakh is taxed at 12.5%; STCG at 20%.
Debt Funds: LTCG and STCG are taxed as per your income slab.
Consult a Certified Financial Planner to optimise your tax strategy.

Regular Portfolio Monitoring and Rebalancing
Investing is not a one-time activity:

Review your portfolio every six months or annually to track performance.

Rebalance your asset allocation periodically to align with your financial goals and risk appetite.

Stay committed to SIPs even during market downturns, as this ensures cost-averaging.

Additional Suggestions
Avoid Over-Reliance on PPF
While PPF is safe, it is not sufficient for wealth creation. Shift excess contributions to equity-based investments for better returns.

Avoid Direct Stocks
Direct equity investing requires time, expertise, and constant monitoring. It carries higher risk and may lead to losses without proper research. Instead, rely on equity mutual funds managed by professionals.

Avoid Mixing Insurance and Investments
Do not invest in ULIPs or endowment plans, as they offer suboptimal returns. Stick to pure insurance products for protection and mutual funds for growth.

The Role of a Certified Financial Planner
To achieve Rs. 5 crores, a well-crafted financial plan is essential. A Certified Financial Planner (CFP) can:

Analyse your current investments and recommend improvements.

Design a customised strategy tailored to your income, expenses, and goals.

Provide periodic reviews to ensure you stay on track.

Finally
Achieving Rs. 5 crores in 10 years is a realistic goal if you adopt a disciplined and diversified approach.

Optimise your PPF contributions and channel excess funds into higher-growth investments.

Build a diversified portfolio with equity and debt mutual funds.

Include a small allocation to gold and maintain an emergency fund.

Stay consistent with your SIPs and review your investments regularly.

Work with a Certified Financial Planner to create a personalised roadmap.

By following these steps, you can secure your financial future and meet your goals.

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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x