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Samraat

Samraat Jadhav  |1852 Answers  |Ask -

Stock Market Expert - Answered on Apr 22, 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
Asked by Anonymous - Apr 22, 2024Hindi
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Money

I want to be a professional trader. Should I do more investment or F&O trading?

Ans: Trading is a zero-sum game, no one in the world have made money by trading, use stock market only as an investment vehicle.
Asked on - Apr 22, 2024 | Answered on Apr 22, 2024
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Ok so How Rakesh Jhunjhuna, Vijay Kedia and Radhakrishnan Dhamani have made money by trading? Can it be a profession if we do it by relevant skills, experience and education
Ans: they all have made money through Investing only and not trading dear.
Asked on - Apr 22, 2024 | Answered on Apr 23, 2024
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Alright, So Can you please give me some best Investment ideas?
Ans: Always invest in Quality companies.
Be discipline.
Stay away from market noise.
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  |4647 Answers  |Ask -

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

Money
Iam a retired person. Now only shear trading . Before I have more money loss.
Ans: It's commendable that you're seeking advice to secure your financial future after retirement. Share trading can be quite volatile and risky, especially if you have experienced significant losses in the past. Let’s discuss how mutual funds can be a safer and more effective way to manage your investments post-retirement.

Understanding Your Current Situation
Past Experiences with Share Trading
You mentioned experiencing significant losses through share trading. This is a common scenario as the stock market can be unpredictable. Share trading requires extensive knowledge, time, and a high-risk tolerance. Post-retirement, it's crucial to prioritize stability and regular income.

The Need for Stability and Regular Income
As a retiree, your primary goal should be to preserve your capital and ensure a steady income stream. Unlike during your working years, you no longer have a regular salary to fall back on, making prudent investment choices essential.

Why Mutual Funds are Suitable for Retirees
Professional Management
Mutual funds are managed by professional fund managers who have expertise in selecting and managing a diversified portfolio of assets. This reduces the burden on you to actively manage and monitor investments.

Diversification
Mutual funds offer diversification by investing in a variety of securities. This helps spread risk across different asset classes, industries, and geographies, thereby reducing the impact of any single investment's poor performance on your overall portfolio.

Lower Risk Compared to Direct Stock Trading
Direct stock trading can be highly volatile and risky. Mutual funds, especially those with a conservative approach like debt funds or balanced funds, offer a more stable and predictable performance, aligning better with the needs of retirees.

Regular Income Options
Certain types of mutual funds, like monthly income plans (MIPs) and systematic withdrawal plans (SWPs), are designed to provide regular income. This can be beneficial for meeting your day-to-day expenses without having to worry about the market's fluctuations.

Tax Efficiency
Mutual funds, particularly equity-linked savings schemes (ELSS), can offer tax benefits. Even without the tax benefits, mutual funds can be more tax-efficient compared to fixed deposits and other traditional saving instruments, especially considering long-term capital gains tax advantages.

Transitioning from Share Trading to Mutual Funds
Evaluating Your Risk Tolerance
Given your past losses in share trading, it's essential to reassess your risk tolerance. Post-retirement, you should focus on low-risk or moderate-risk investments that provide stable returns.

Choosing the Right Types of Mutual Funds
Debt Mutual Funds
Debt mutual funds invest in fixed income instruments like bonds, government securities, and corporate debt. They offer relatively lower risk and stable returns, making them suitable for retirees.

Balanced or Hybrid Funds
Balanced or hybrid funds invest in both equities and debt instruments. They provide a balance between growth and stability, making them a good option if you're looking for moderate risk and return.

Monthly Income Plans (MIPs)
MIPs primarily invest in debt instruments with a small portion in equities. They are designed to provide regular income, which can be beneficial for meeting monthly expenses.

Systematic Withdrawal Plans (SWPs)
SWPs allow you to withdraw a fixed amount regularly from your mutual fund investments. This ensures a steady cash flow while your remaining investment continues to grow.

Setting Up a Systematic Investment Plan (SIP)
If you still have a lump sum amount to invest, consider setting up a Systematic Investment Plan (SIP). SIPs allow you to invest a fixed amount regularly, reducing the impact of market volatility and providing the benefit of rupee cost averaging.

Consulting a Certified Financial Planner
Given the complexities involved in transitioning your investment strategy, consulting a Certified Financial Planner (CFP) can be immensely beneficial. They can provide personalized advice based on your financial goals, risk tolerance, and investment horizon.

Implementing Your New Investment Strategy
Reallocating Your Funds
Gradually move your investments from high-risk shares to mutual funds. This transition should be done systematically to avoid significant market impact and to benefit from potential short-term gains in shares.

Monitoring and Rebalancing Your Portfolio
Regularly monitor your mutual fund portfolio to ensure it aligns with your financial goals. Rebalance your portfolio periodically to maintain the desired asset allocation and risk level.

Leveraging SWPs for Regular Income
Set up SWPs in your mutual fund investments to provide a steady stream of income. This can help cover your regular expenses and provide financial stability.

Final Insights
Switching from share trading to mutual funds can significantly enhance your financial security post-retirement. Mutual funds offer professional management, diversification, lower risk, regular income options, and tax efficiency, making them an ideal choice for retirees.

By evaluating your risk tolerance, choosing the right types of mutual funds, setting up SIPs, and consulting a Certified Financial Planner, you can create a stable and growth-oriented investment portfolio. Regular monitoring and rebalancing will ensure your investments remain aligned with your financial goals.

Your past experiences with share trading have taught you valuable lessons. Now, with a focused approach towards mutual funds, you can achieve financial stability and peace of mind. Embrace this new strategy to secure a comfortable and worry-free retirement.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

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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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