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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on May 14, 2021

Mutual Fund Expert... more
abhishek Question by abhishek on May 14, 2021Hindi
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Q1. Have I invested in too many funds?

Ans: Yes, 4 to 6 schemes are sufficient

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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Sanjeev

Sanjeev Govila  | Answer  |Ask -

Financial Planner - Answered on May 10, 2023

Money
Sir, I have following mutual Funds and I believe I have made many mistakes.. Need your advice as all are completing 12 months now. Canera robeco infrasturcfure fund Growth Regular - 5000/SIP - total value 70000 (with small lumpsum) Current Value 72236 - I am not sure whether to keep or not? UTI Flexicap - 5000 SIP with total value 65000 Current value 64500 - I am not sure whether to keep or not? Mirae asset large cap growth regular - 5000 SIP - total value 113000 (With small lumpsums) Current Value 115000 - I am not sure whether to keep or not? Axis focused 25 growth regular - 5000 SIP - total value 75000 (with small lumpsums) - Current Value 74700 - I am not sure whether to keep or not? Axis Bluechip growth regular - 5000 SIP TOtal Value 155000 - Current Value 155100 - I am not sure whether to keep or not? Kotak small Cap growth regular No SIP - I put in lumpsums during dips - total value 2 lakhs current value 202946 - I plan to keep it and eventually bring it to direct mode and continue investing - what's your opinion? SBI Contra Fund growth regular - NO SIP - I put in lumpsums during dips total value 166000 and current value 179780 - I plan to continue and bring it eventually to direct mode and continue investing. What is your opinion? SBI Contra fund - direct growth No SIP - I put in lumpsums during dips - total value 125000 current value 133000 - I plan to keep it and continue investing during dips and will eventually bring the 166000 from the regular mode also to the direct mode. What is your opinion? SBI Flexi CAP regular growth No SIP - I put in lumpsums during dips ) - Total value 1 lakh - current value - 103500 - I am not sure whether to continue investing in this one or not? Invesco India regular growth - 5000 SIP - total value - 40000 - current value - 40900 - I am not sure whether to continue or not? DSP Mid Cap regular growth - 5000 SIP - total value 40000 - current value 40200 - I am not sure whether to continue or not? HDFC Multicap Regular Growth - 5000 SIP - total value 50000 (with small lumpsum) - Current vlaue - 50260 - I might just continue with this one. What is your opinion? Parag Parikh Flexi cap regular growth No SIP - I put in money during dips - total value 2.7 lakh - current value - 2.93 Lakhs. I plan to continue investing lumpsums during dips and will eventually bring it in direct mode. What is your opinion? SBI Large and mid cap direct growth - 5000 SIP - total value approx 70000 - current value approx 74000. I might just continue with this one. What is your opinion? Quant ELSS direct growth No SIP - I put in money during dips. Total value approx 3 lakhs. Current value (haven't checked). I plan to continue putting lupmsums during dips. What is your opinion? Nippon India Small Cap direct growth No SIP - I put in money during dips. Total value approx 2.8 lakhs. Current Value (Haven't checked). I plan to continue putting lump sums during dips). What is your opinion? Kotak Bluechip Direct growth - No SIP. I put in money during dips. total value 2.35 lakhs. Current value approx 2.5 lakhs. I plan to continue putting lumpsums during dips. What is your opinion? As, I can see that there are too many funds and lots of overlapping also. Many funds have been at their historically low and some have been at the lowest ladder in rankings with continue bad performance. Thus, I need to reduce the number of funds and stop the bad ones and also to reduce the overlapping. It is not a goal based investment but simply an investment with no time horizon but I do not see myself touching them for the next 10 years. In fact, I plan to just keep putting in more so my approach can be seen as aggressive one and I would not mind going bullish on small caps and mid caps as the time horizon is long. Please advice me on how to proceed. Thanks
Ans: Puneet
You have 17 MFs and it is not possible for me to analyse and give recommendations on each one of them in the time available to me.

But from a cursory glance, I can surely say that there are too many of them. Too many of MFs neither give you diversification nor provide you safety or better returns. They only make monitoring difficult.

Since you are comfortable with an aggressive portfolio and have a long time horizon of 10 years, my advice to you is:-
• Straightaway cut down your number of funds to half – say 8. Use one of the rating websites to know which one is good and which not. Such websites are not the best way to select funds but, in your case, would work fine.
• The cutting down should be category-wise. Try not to have more than one fund per category. Rarely should you have two per category.
• If you only wish to have equity funds, then your total number of funds could be even lesser. Go in for Large Cap / Index Fund, Flexicap Fund, Large & Mid Cap Fund, Mid Cap Fund, Small Cap Fund, and maybe an Aggressive Hybrid or an Asset Allocator Fund. Try and take more funds with a value oriented approach than growth approach.
• One selected, do the same for SIPs and bulk amounts.
• Lastly, monitor your funds once in six months and rebalance if required.

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

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

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[21/04, 10:11 pm] Prabu Ravichandran: Hi Experts, I am 40 years old. I am investing in mutual fund SIPs. My portfolio has following funds each 1000Rs SIP monthly. 1) Quant Infrastructure 2) Quant Mid cap 3) Quant Small cap 4) Quant Active 5) Quant Flexi cap 6) ICICI Pru Infrastructure 7) ICICI Pru Bluechip 8) ICICI Pru Bharat 22 FOF 9) Nippon India Large cap 10) Nippon India Growth 11) Nippon Small cap 12) Nippon India Multi cap 13) Nippon Power & Infra 14) Aditya Birla Sun Life PSU 15) SBI PSU 16) Invesco PSU 17) JM Large cap 18) JM Value fund 19) JM Flexi cap 20) Tata Small cap 21) HDFC Mid cap opportunities 22) Mahindra Manulife Mid cap 23) Mahindra Manulife Multi cap 24) Motilal Oswal Mid cap [21/04, 10:14 pm] Prabu Ravichandran: Am I good to continue on these funds? Do I need to add/remove any funds for a good portfolio. Please provide your thoughts.
Ans: Your portfolio appears to be heavily concentrated with multiple funds, possibly leading to overlap and excessive diversification. It's essential to streamline your investments to avoid redundancy and maintain a clear investment strategy. Consider consolidating similar funds or those with overlapping objectives. Assess the performance, risk, and alignment with your financial goals for each fund. Periodic review and adjustments are crucial to ensure your portfolio remains aligned with your objectives and risk tolerance. Consulting a financial advisor can help you optimize your portfolio and ensure a more focused investment approach.

..Read more

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

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

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Hello, I am 32 years old and have started investing in following funds. Please review. I am investing with a horizon of 10 - 15 years and ready to take risk. The investment is not linked to any specific goal but to save and create wealth. 1. Parag Parik - 10k 2. Kotak Multicap - 10k 3. Canra Rebocco Small Cap - 5k 4. Canara rebocco blue chip - 5k 5. ICICI PRU value discovery - 10k 6. AXIS Growth Opportunities - 9k 7. HDFC Balance Advantage - 7k 8. Groww Index Fund - 7k 6. Axis ELSS - 2.5k
Ans: It's great to see your proactive approach towards investing at the age of 32, with a clear horizon of 10-15 years and a willingness to take on risk to achieve your wealth creation goals. Let's review your investment portfolio to ensure alignment with your objectives.

Assessment of Fund Selection:

Parag Parikh Long Term Equity Fund (PPLTEF): This fund follows a flexible investment strategy, investing in a mix of Indian and foreign equities. It's known for its consistent performance and focus on quality stocks.

Kotak Standard Multicap Fund: Multicap funds offer diversification across market capitalizations. Kotak is a reputable AMC, and this fund has a strong track record of delivering steady returns over the long term.

Canara Robeco Small Cap Fund: Small-cap funds have the potential for high growth but come with higher volatility. Canara Robeco has a decent reputation, but small-cap investments require careful monitoring due to their inherent risk.

Canara Robeco Bluechip Equity Fund: Blue-chip funds invest in large-cap stocks known for their stability and reliability. This fund offers a conservative approach within your portfolio, balancing the risk associated with small-cap investments.

ICICI Prudential Value Discovery Fund: Value-oriented funds focus on undervalued stocks with growth potential. ICICI Pru is a trusted AMC, and this fund aims to deliver long-term capital appreciation.

Axis Growth Opportunities Fund: This fund targets growth-oriented companies across sectors. With a focus on mid and small-cap stocks, it adds diversification to your portfolio but may come with higher volatility.

HDFC Balanced Advantage Fund: Balanced advantage funds dynamically manage equity exposure based on market conditions. This can provide stability during market downturns while capturing growth opportunities during upswings.

Groww Index Fund: Index funds passively track market indices. While they offer low expense ratios and broad market exposure, they may underperform actively managed funds during certain market conditions.

Axis Long Term Equity Fund (ELSS): ELSS funds offer tax benefits under Section 80C of the Income Tax Act. Axis is a reputable AMC, and this fund invests predominantly in equity, providing potential for capital appreciation along with tax savings.

Overall Portfolio Assessment:

Your portfolio reflects a diversified mix of equity funds across market capitalizations and investment styles. It's well-suited for long-term wealth creation, considering your risk appetite and investment horizon.

Recommendation:

Regularly review your portfolio's performance and rebalance if necessary to maintain your desired asset allocation. Consider consulting with a Certified Financial Planner periodically to ensure your investments remain aligned with your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Ravi

Ravi Mittal  |431 Answers  |Ask -

Dating, Relationships Expert - Answered on Nov 22, 2024

Asked by Anonymous - Nov 22, 2024Hindi
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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  |683 Answers  |Ask -

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

Asked by Anonymous - Nov 13, 2024Hindi
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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.

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