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

Samraat Jadhav  |2386 Answers  |Ask -

Stock Market Expert - Answered on Jun 30, 2023

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
ANKUR Question by ANKUR on Jun 26, 2023Hindi
Listen
Money

I purchase stock daily of 2 -3 good companies...just like sip types ...whenever i receive more than 2% price i sell it...and start purchasing again and so on.. Is it a good stratergy

Ans: 2% is very less you should shift this to 5%
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

Ramalingam

Ramalingam Kalirajan  |9752 Answers  |Ask -

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

Listen
Money
Hi, Every month i invest Rs.6000 (i.e 1000 in each SIP as below 1) Aditya Birla Sun Life Small Cap Fund - GROWTH, 2) Axis Flexi Cap Fund - Regular Plan - Growth ,3)Canara Robeco Emerging Equities - Regular Plan - GROWTH ,4)HDFC Large and Mid Cap Fund - Regular Growth Plan ,5)ICICI Prudential Flexicap Fund - Growth ,6)Nippon India ELSS Tax Saver Fund-Growth Option and RS.50,000/- in Liquiloans is it good ? should i continue with the same stock..
Ans: It's great to see your disciplined approach towards investing through SIPs and also diversifying across various mutual fund categories. Let's review your current investments and provide some insights:

Diversification: You've done a good job diversifying across different mutual fund categories like Small Cap, Flexi Cap, Emerging Equities, Large and Mid Cap, Flexicap, and ELSS. This approach can help spread the risk and potentially enhance returns.
Performance Review: It's essential to periodically review the performance of your funds. While past performance is not indicative of future results, checking the fund's performance relative to its benchmark and peers can give you insights into its consistency and potential.
Liquiloans: Investing in platforms like Liquiloans involves lending money to borrowers, which carries a higher level of risk compared to traditional investment avenues. The risk associated with such platforms is higher due to factors like borrower defaults and platform-specific risks. Given the higher risk involved, it's crucial to evaluate whether this aligns with your risk tolerance and overall investment strategy. Considering your other diversified mutual fund investments, you might want to reconsider allocating a significant portion to such platforms and explore more stable and regulated investment options to safeguard your investment capital.
Professional Advice: Consider consulting a Certified Financial Planner to get a comprehensive review of your portfolio. They can provide personalized advice tailored to your financial goals, risk tolerance, and investment horizon. They can also guide you on whether to continue with your current SIPs or make any necessary adjustments.
Stay Invested: Investing is a long-term journey, and it's essential to stay invested and not get swayed by short-term market fluctuations.
Remember, while your current investment strategy seems well-diversified, it's crucial to review and adjust periodically to align with your financial goals and market conditions. Best wishes on your investment journey!

..Read more

Ramalingam

Ramalingam Kalirajan  |9752 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 29, 2024

Asked by Anonymous - May 29, 2024Hindi
Money
I have invested rs 20 l (2 lakhs each) in these 10 stocks Hul jiofinancial syngene hdfc idfc Britannia hcl titan Asian paints nestle I have also invested rs 10 lakhs in quant elss fund. Is this a viable strategy for the long term or should i reduce my exposure to some stocks? I understand that there might be overlap between the 10stocks and the stocks in the quant fund. Thanks
Ans: Assessing Your Current Investment Strategy

Your current investment strategy includes Rs 20 lakh in 10 stocks and Rs 10 lakh in an ELSS mutual fund. This shows a proactive approach towards wealth creation. Let’s analyze your strategy and see if any adjustments are necessary.

Evaluating Your Stock Portfolio

Investing Rs 2 lakh each in 10 stocks provides diversification across different sectors. Here’s a brief assessment of your stock choices:

HUL: A strong player in the FMCG sector. Consistent performer with a stable market presence.

Jio Financial: A relatively new entity but backed by a strong parent company. Potential for growth in the financial services sector.

Syngene: A leading contract research organization. Strong growth prospects in the biotech and pharma sectors.

HDFC: A leading financial institution. Stable performance with potential for growth in the banking and financial services sector.

IDFC: Involved in infrastructure financing. Growth potential but subject to sectoral risks.

Britannia: Another strong FMCG player. Consistent performance with a strong market presence.

HCL: A major IT services company. Growth potential in the global IT services market.

Titan: Leading player in the jewelry and watch segments. Strong brand presence and growth potential.

Asian Paints: Market leader in the paints sector. Consistent performance with strong market presence.

Nestle: A global FMCG giant. Stable performer with a strong market presence.

Analyzing Overlap with Quant ELSS Fund

The Quant ELSS fund also invests in a diversified portfolio of stocks. There might be an overlap between the stocks you hold and the fund’s portfolio. Overlap can increase your exposure to certain stocks, reducing diversification benefits.

Benefits of Diversification

Diversification reduces risk by spreading investments across different sectors. Your current stock portfolio covers various sectors, which is good for managing risk. However, excessive overlap with your ELSS fund can increase concentration risk.

Considerations for Adjusting Your Portfolio

Review Overlap: Check the portfolio of the Quant ELSS fund. Identify any significant overlaps with your stock portfolio. Too much overlap can increase risk.

Sector Diversification: Ensure that your investments cover diverse sectors. Avoid overexposure to any single sector to manage risk better.

Performance Review: Regularly review the performance of your stocks. Make adjustments if certain stocks underperform consistently.

Risk Tolerance: Assess your risk tolerance. If you prefer lower risk, consider reducing exposure to high-volatility stocks.

Exploring Additional Investment Options

Balanced Funds: Consider balanced or hybrid funds. They invest in both equity and debt, offering growth with reduced risk.

Debt Mutual Funds: For safer investments, consider debt mutual funds. They provide steady returns with lower risk compared to equities.

Systematic Investment Plan (SIP): Invest in mutual funds through SIPs. It provides disciplined investing and benefits from rupee cost averaging.

The Risks of Investing in Direct Stocks

Investing in direct stocks can be rewarding, but it also comes with significant risks. Understanding these risks is crucial for making informed investment decisions.

Market Volatility: Individual stocks can be highly volatile. Market fluctuations can lead to significant losses, especially if you are not well-versed in stock analysis.

Concentration Risk: Holding a limited number of stocks increases concentration risk. Poor performance in a few stocks can drastically affect your overall portfolio.

Lack of Diversification: Unlike mutual funds, which spread investments across numerous securities, individual stock investments may lack diversification, increasing exposure to specific risks.

Time and Expertise Required: Successful stock investing requires extensive research, continuous monitoring, and expertise. Not everyone has the time or skills to manage this effectively.

Company-Specific Risks: Individual stocks are subject to company-specific risks such as management changes, regulatory issues, and business performance. These factors can significantly impact stock prices.

Advantages of Investing in Mutual Funds

Investing in mutual funds can mitigate many of the risks associated with direct stock investments. Here are some benefits:

Professional Management: Mutual funds are managed by professional fund managers who have the expertise and resources to analyze and select stocks.

Diversification: Mutual funds invest in a wide range of securities, reducing the impact of poor performance by any single stock.

Reduced Risk: Diversification and professional management help in reducing overall investment risk.

Convenience: Investing in mutual funds is more convenient. It requires less time and effort compared to managing individual stocks.

Systematic Investment Options: Mutual funds offer options like SIPs, which promote disciplined investing and can benefit from market volatility through rupee cost averaging.

Reinvesting in Mutual Funds

Given the risks associated with direct stock investments and the benefits of mutual funds, it might be wise to consider reinvesting in mutual funds. Here’s how you can approach this:

Diversified Equity Funds: Consider investing in diversified equity funds. These funds invest across various sectors and market capitalizations, providing balanced exposure to different segments of the market.

Balanced or Hybrid Funds: As mentioned earlier, balanced or hybrid funds offer a mix of equity and debt, providing growth potential with reduced risk.

Debt Funds for Stability: To ensure capital preservation and steady income, allocate a portion of your investments to debt funds. They provide stability and can act as a buffer against equity market volatility.

ELSS for Tax Benefits: Continue investing in ELSS funds for tax-saving benefits under Section 80C. ELSS funds also have a three-year lock-in period, encouraging long-term investing.

Consulting a Certified Financial Planner

A Certified Financial Planner (CFP) can provide personalized advice based on your financial goals and risk tolerance. They can help you evaluate your current portfolio and suggest adjustments. A CFP can also assist in creating a diversified investment strategy tailored to your needs.

Regular Portfolio Review

Performance Monitoring: Regularly monitor the performance of your investments. Adjust your portfolio based on market conditions and personal goals.

Rebalancing: Periodically rebalance your portfolio to maintain the desired asset allocation. This helps in managing risk and optimizing returns.

Goal Alignment: Ensure your investments align with your financial goals. Adjust your strategy if there are changes in your goals or financial situation.

Conclusion

Your current investment strategy shows a good understanding of diversification and growth potential. However, it’s important to manage overlap with your ELSS fund to maintain diversification benefits. Consider additional investment options like balanced or debt mutual funds for a safer approach. Consulting a Certified Financial Planner can provide personalized guidance to optimize your investment strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9752 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 26, 2024

Listen
Money
I have a stock portfolio of 8 cr nheritanced from my father, please adivse if i sell or keep it, i would like to sell n play safe n invest in fd n earn monthly interest, is it a good strategy, fyi i also work n get a monthly salary of 5lkhs, my goal is to reitre with 10 cr liquid cash plus some passive income
Ans: Current Financial Situation
Stock Portfolio: Rs 8 crore inherited from your father.

Monthly Salary: Rs 5 lakhs.

Retirement Goal: Retire with Rs 10 crore liquid cash and passive income.

Evaluating Your Strategy
Risk Appetite: You prefer playing safe. Understandable, but let's explore better options.

Fixed Deposits (FDs): They offer safety but low returns. Over time, inflation will erode your purchasing power.

Diversified Approach
Balanced Portfolio: A mix of equity and debt can provide better returns while managing risk.

Mutual Funds: Consider investing in mutual funds. They offer diversification and professional management.

Disadvantages of Fixed Deposits
Low Returns: FDs provide lower returns compared to other investments like equity.

Inflation Impact: Returns may not keep up with inflation. Your purchasing power decreases over time.

Advantages of Mutual Funds
Higher Returns: Equity mutual funds can offer higher returns over the long term.

Diversification: Mutual funds spread risk across various sectors and companies.

Professional Management: Managed by experienced fund managers.

Active Management Over Index Funds
Actively Managed Funds: They aim to outperform the market. Provide higher returns with professional oversight.

Index Funds: Simply replicate market indices. May not perform well in all market conditions.

Steps to Take
Consult a Certified Financial Planner: Get a professional assessment of your portfolio. They can guide you in consolidating and reinvesting.

Gradual Reinvestment: Slowly reinvest your stock portfolio into mutual funds. Ensure a balanced mix of equity and debt funds.

Maintaining Passive Income
Systematic Withdrawal Plans (SWP): Mutual funds offer SWPs. They provide regular income while keeping your principal invested.



Building the Retirement Corpus
Regular Contributions: Continue saving and investing a portion of your salary.

Review and Adjust: Periodically review your investments. Make necessary adjustments based on market conditions and personal goals.

Final Insights
Balanced Approach: Combining equity and debt provides better returns and safety.

Professional Guidance: Consult a Certified Financial Planner for a tailored strategy.

Long-Term Perspective: Focus on long-term growth and stability for your retirement corpus.

Inflation Protection: Ensure your investments can outpace inflation to maintain purchasing power.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9752 Answers  |Ask -

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

Asked by Anonymous - Nov 03, 2024Hindi
Money
Sir , 1.5lakh monthly SIP divided in large mid and small cap. Rest 50k in ETFs and US stocks. Is it a good strategy in long term ,10-15year? Thankyou
Ans: Your commitment to a structured investment plan reflects foresight, and it's commendable that you've outlined a mix of asset classes. Let's break down each part of your strategy and provide insights on optimising for a 10-15-year horizon.

1. SIP Allocation Across Large, Mid, and Small Cap Funds
Investing Rs 1.5 lakh monthly in a diversified mix of large, mid, and small-cap funds can be a productive approach. This diversified allocation has several benefits:

Growth Potential: Mid and small-cap funds provide the opportunity for higher growth compared to large-cap funds. With a long-term horizon, you have time to weather any short-term volatility.

Stability from Large Caps: Large-cap funds add stability. They tend to be less volatile than mid and small caps, which helps maintain balance within your portfolio.

Balanced Returns: By spreading your SIPs across these categories, you’re hedging risk while maximizing growth potential. Each category performs differently depending on market conditions, so a mixed approach balances returns.

2. Disadvantages of ETFs in a Long-Term Portfolio
Although ETFs can be attractive, they may not be ideal for a long-term, goal-oriented investment strategy. Here’s why:

Lack of Active Management: ETFs mirror an index and lack active management. This can limit performance during economic shifts as they can’t adapt to market changes or take advantage of specific opportunities like actively managed funds.

No Downside Protection: With ETFs, you follow the market's highs and lows directly, which may expose your portfolio to greater risks. Actively managed funds can provide better downside protection.

Tax Implications: ETFs also incur capital gains tax, which reduces returns, especially for investors in higher tax brackets. Actively managed funds may offer tax-efficiency options.

3. Direct Investments in US Stocks and Long-Term Viability
Investing in US stocks can bring geographic diversification and exposure to sectors not as prevalent in India. However, a few considerations are crucial:

Currency Exchange Risk: Returns can be impacted by fluctuations in exchange rates. Rupee depreciation could enhance returns, while appreciation could reduce them.

Economic Conditions: Economic shifts in the US affect the performance of these stocks. Being mindful of global trends is essential.

Taxation on US Stocks: Gains from US stock investments attract foreign tax implications. These tax rules differ from domestic investments, and understanding them is necessary to avoid surprises.

Importance of Using Regular Mutual Funds Over Direct Plans
While direct plans may seem appealing due to lower costs, investing through a Certified Financial Planner (CFP) using regular funds offers several advantages:

Professional Guidance: With a CFP, you gain access to expert insights on asset allocation and market trends. This guidance can align your investments with changing life stages and goals.

Regular Reviews: The financial landscape shifts regularly. With regular plans managed through a CFP, your portfolio is monitored and adjusted as needed. This oversight optimises your returns over time.

Focused Strategy: A CFP can help align your investment mix according to your unique financial goals. Direct plans place the full responsibility on you, which can be challenging without extensive knowledge.

Reviewing Your Investment Strategy Annually
An annual review of your investments with a Certified Financial Planner can add substantial value to your portfolio:

Rebalancing Portfolio: Market performance varies across asset classes. Regularly rebalancing your portfolio ensures you maintain the desired allocation in line with your goals.

Capitalising on Market Trends: A CFP can identify new opportunities or areas of risk, allowing you to make timely adjustments to your strategy.

Adjusting to Life Changes: Major life events can impact your financial goals. By reviewing your plan annually, you ensure it aligns with any new financial commitments or lifestyle changes.

Tax Implications for Equity and Debt Funds
Understanding the tax structure is key in maximising your returns. Here’s how capital gains taxation works:

Equity Mutual Funds: Long-term capital gains (LTCG) over Rs 1.25 lakh are taxed at 12.5%. Short-term capital gains (STCG) are taxed at 20%.

Debt Mutual Funds: LTCG and STCG are taxed as per your income tax slab. Knowing the tax implications will help you choose investments more tax-efficiently for long-term growth.

Emergency and Contingency Planning
It’s essential to maintain an emergency fund alongside your investments:

Contingency Fund: This fund should ideally cover 6-12 months’ expenses. Keep it in liquid assets for easy access during unforeseen events.

Medical and Health Planning: Unexpected medical costs can strain your portfolio. Consider separate investments or health insurance to cover medical expenses.

Final Insights
Your investment approach, focused on a diversified SIP with exposure to different markets, is a strong foundation. By ensuring an annual review with a Certified Financial Planner, you can keep your portfolio aligned with your goals, account for changing market dynamics, and mitigate risks. Remember, staying disciplined and adaptable in your strategy will help you reach your long-term objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

Latest Questions
Dr Nagarajan J S K

Dr Nagarajan J S K   |1784 Answers  |Ask -

NEET, Medical, Pharmacy Careers - Answered on Jul 15, 2025

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