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51-Year-Old Seeks Low-Risk Investment Diversification: FD, Mutual Funds, Stocks, and SIP

Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

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

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - Jul 19, 2024Hindi
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"I am 51 years old. I have Fixed Deposits (FDs) worth around INR 50 lakhs and INR 10 lakhs in mutual funds. I am not a risk-taking person and am hesitant to invest money in equities/stocks. I want to start a SIP but am unable to identify the right SIP due to my low risk tolerance. Please advise how I can diversify my investment. Additionally, please suggest how I can invest in stocks and recommend some good stocks. Also, suggest a good SIP to start and the monthly amount for investment."

Ans: Current Financial Overview
Age: 51 years
FDs: Rs 50 lakhs
Mutual Funds: Rs 10 lakhs
Risk Tolerance: Low
Financial Goals
Wealth Preservation
Low-Risk Investments
Exploring SIP Options
Building a Diversified Portfolio
Investment Strategy
Fixed Deposits (FDs)
Current Allocation: Rs 50 lakhs
Purpose: Safe and secure investments with assured returns.
Action: Continue maintaining FDs for risk-free returns.
Mutual Funds
Current Allocation: Rs 10 lakhs
Purpose: Diversification and moderate growth.
Action: Maintain current mutual fund investments.
Systematic Investment Plan (SIP)
SIP for Low-Risk Investors
Purpose: Steady and consistent growth with low risk.
Suggested Funds: Choose balanced or conservative hybrid funds.
Monthly SIP Amount: Rs 10,000 - Rs 20,000
Fund Selection:
Balanced Advantage Fund
Conservative Hybrid Fund
Reason: These funds balance equity and debt exposure, reducing risk.
SIP Allocation Example
Balanced Advantage Fund: Rs 5,000 per month
Conservative Hybrid Fund: Rs 5,000 per month
Building a Sizable Corpus
Focus on Mutual Funds
Objective: Build a sizable corpus through mutual funds before exploring stocks.
Steps:
Increase SIP investments gradually.
Choose funds with a good track record and low volatility.
Review fund performance with the help of a Certified Financial Planner.
Understanding Market Cycles
Education and Guidance
Purpose: Learn about market cycles and investment strategies.
Approach:
Regular consultations with your fund manager.
Attend investment seminars/webinars.
Read investment-related books and articles.
Diversification Strategy
Combining FDs, Mutual Funds, and SIPs
FDs: Rs 50 lakhs (continue as is)
Mutual Funds: Rs 10 lakhs (maintain)
SIPs: Rs 10,000 - Rs 20,000 per month in balanced and conservative hybrid funds
Final Insights
Diversification: Balance between FDs, mutual funds, and SIPs.
Low-Risk Focus: Choose conservative investment options.
Steady Growth: Aim for consistent and steady returns.
Regular Review: Monitor investments periodically and adjust as needed.
Education: Learn about market cycles with the help of your fund manager.
By following this diversified strategy, you can achieve steady growth while maintaining low risk, ensuring financial security.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
Asked on - Jul 22, 2024 | Answered on Jul 23, 2024
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Thank you for the reply. "Please advise me on the following: SBI is now coming up with a new NFO, the Innovative Opportunities Fund. Is it a good investment? Also, are the other mutual funds I am currently holding (SBI Multicap Fund, SBI Nifty50 Equal Weight Index, SBI Automotive Opportunities Fund) good for the long run?"
Ans: SBI Innovative Opportunities Fund
New Fund Offers (NFOs) are often untested.

They lack a performance history.

It's better to invest in funds with proven track records.

Existing Mutual Funds
SBI Multicap Fund:

Multicap funds are diversified.

They invest across market capitalizations.

This can be a good long-term investment.

SBI Nifty50 Equal Weight Index Fund:

Index funds mirror the market.

They lack active management.

Actively managed funds can offer better returns.

SBI Automotive Opportunities Fund:

Sectoral funds are risky.

They focus on specific sectors, increasing risk.

Diversified funds are safer and more stable.

Recommendations
Avoid thematic, sectoral, and index funds.

Choose actively managed diversified funds with a good track record.

They offer better risk management and potential returns.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
Asked on - Jul 23, 2024 | Answered on Jul 24, 2024
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Thank you. Please suggest some actively managed diversified funds in SBI for a long term investment. Also, I hope Balance Advantage fund and Multicap Funds are good selections to start two SIP's of 10K each.
Ans: Given market dynamics, consulting a Certified Financial Planner (CFP) will provide tailored advice and ensure your investments align with your long-term goals. Regular reviews and adjustments are essential.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
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

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Asked by Anonymous - Apr 22, 2024Hindi
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Hello Sir, I'm Saumya getting 37k in hand per month & I'm 26 years old. I want to start SIP with an amount of RS.5000, for this purpose on which mutual fund I should invest and how can I diversify my portfolio.
Ans: Hello Saumya, it's great to hear about your interest in starting a SIP to build your wealth at such a young age. With your monthly income of 37k, investing 5000 Rs in SIP is a prudent step towards your financial goals. Let's explore your options for mutual funds and portfolio diversification.

For your SIP investment, considering your age and risk appetite, you may opt for a diversified equity mutual fund. These funds invest in a mix of large-cap, mid-cap, and small-cap stocks, providing growth potential over the long term. Since you're starting with a moderate investment amount, you can consider starting with a single diversified equity fund initially.

Now, regarding diversification, it's essential to spread your investments across different asset classes to reduce risk. Alongside your equity SIP, you may also consider allocating a portion of your savings to debt mutual funds or fixed deposits. Debt funds offer stability and regular income, balancing the volatility of equity investments.

Moreover, considering your long-term financial goals, it's wise to diversify geographically as well. Investing in international funds or global ETFs can provide exposure to foreign markets, further diversifying your portfolio and reducing dependency on the domestic market.

As you progress and your income increases, you can gradually increase your SIP amount and diversify into more mutual funds across various categories. Regularly reviewing your portfolio's performance and rebalancing it based on your financial goals and market conditions is crucial for long-term success.

Remember, investing is a journey, and it's essential to stay committed and patient. Consulting with a Certified Financial Planner can provide personalized advice tailored to your financial situation and goals, helping you make informed investment decisions.

Starting early and being consistent with your investments will play a significant role in achieving your financial aspirations. Best of luck on your investment journey!

Best Regards,

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Chief Financial Planner,

www.holisticinvestment.in

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Sir i am currently in class 11 th and i just want to prepare for jee mains and advanced 2026 exam so give me some roadmap to achieve and also guide me for computer science
Ans: Shreya, I trust that you have already enrolled in a coaching center, whether it be online or in person, and have finished your eleventh syllabus. (1) If you have not yet created your own short-notes for the 11th syllabus that has been completed, prepare it and continue to revise them every three days until 2026, even after you have commenced studying the 12th syllabus in December 2024. (2) Review the questions that you have incorrectly answered or skipped in mock tests conducted by your Coaching Center and/or practiced independently. (3) In order to increase your rank/percentile by targeting computer science at a reputable college/institute, prioritize mathematics (although all three subjects are equally important). (4) You should be thorough with NCERT books, particularly those pertaining to chemistry, in conjunction with the materials provided by your coaching institute. (5) Have 1-2 reference books for each subject. Not exceeding two. (6) Review the questions that were incorrectly answered or skipped in your mock and practice exams and retake the test. It is advisable to maintain a distinct note-book for these types of questions, which should include answers and elucidating notes, in order to review them repeatedly for all three subjects. (7) Download the SYLLABUS of JEE Main 2025 (available on Google by searching for "JEE Main Information Bulletin") and print it out, as there will be no significant changes to the syllabus in 2026. Maintain it on your study table and continue to update the 11th syllabus chapters and concepts that you have covered to date by marking them with a checkmark. This will boost your confidence if you continue to update the same till November 2025. (8) A slight difference in Syllabus might be visible when you acquire the 2026 JEE Main / JEE Advanced Syllabus. The same can be resolved within 15 days to one month in 2025-26. (9) Increase your productivity by studying for 45 minutes to 1 hour, taking a 10-minute break, and then continuing for 45 minutes. (10) Take a 2-3 minute break every 45 minutes while practicing questions, whether offline or online. This break should consist of closing your eyes and taking long breaths to enhance your concentration and mental capacity. (11) Additionally, it is recommended that you acquire the 20-40 PREVIOUS years question paper book of JEE (Main & Advanced) from Amazon. Arihant's, Disha's, or MTG's publications are recommended. Once you have finished reading a chapter, practice and complete it to determine the extent to which you have comprehended the concepts and to identify areas that require improvement. (12) By October 2025, ensure that you have reviewed significantly more than 90% of the previous years questions. Your confidence will be further bolstered by this. (13) After the mock test is completed at your coaching center, clarify all incorrectly answered or ignored questions and continue to revise and practice them, as these types of questions will significantly disrupt your performance in the actual JEE. (14) If you are a regular school student, inquire with your class teacher about the minimum attendance requirement as outlined in the Board's regulations (State, CBSE, ICSE, etc.). Utilize the remaining 15% by taking time off and preparing for your JEE, if only 85% attendance is required. (15) THE MOST IMPORTANT Value Added Suggestion: Rather than solely relying on JEE, please participate in 5-7 entrance exams/counseling process with a JEE score for getting admission into any one of the private engineering colleges to have a variety of options to select the most suitable one. All the BEST for Your Prosperous Future.

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T S Khurana

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Tax Expert - Answered on Nov 23, 2024

Asked by Anonymous - May 11, 2024Hindi
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Can you please suggest on capital gains as per Indian taxation laws arising in the below two queries : 1) property purchased with joint ownership, me and my wife’s name in 2015 at a cost of 64,80,000, housing improvements done for the cost of 1000000 and brokerages of 200000 paid and sold the same property at 10000000 in Dec 2023? 2) 87% of the proceeds got from the deal i.e 8700000, have been reinvested to pay 25% amount in purchasing another joint ownership property in Dec 2023, 3) I have invested in another under construction property in Nov 2023 by taking housing loan, which is on me and my wife’s name worth 1.4 cr, here the primary applicant is me only while wife is just made a Co applicant in the builder buyer agreement and also on the housing loan . So what are the LTCG tax liabilities arising from the above 3 scenarios for FY 2023-2024 and FY 2024-2025. I intend to sale off the property acquired in (2) by Dec 2024 and use that proceeds to close the housing loan for the property acquired in (3), will this sale of property be inviting any tax liabilities if the complete proceeds received from the sale of the property in (2) would be utilised to close the housing loan taken in Nov 2023 for the property in (3) ? Since in FY 23-24, I would be claiming the LTCG from the sale proceeds of 1) invested in the purchase of property in 2), and I intend to sale off this property in Dec 2024, will the LTCG claim be forfeited on the property sale in (1), should I hold this property at least for further 1 year so that sale of this property in 2) will not invite STCG?
Ans: (A). Let's first talk about F/Y 2023-24 :
You jointly sold a Property during the year for Rs.76.80 lakhs (64.80+10.00+2.00), & sold the same for Rs.100.00 lakhs.
You have jointly also purchased Property No.3 (I suppose it is Residential only), for Rs.140.00 lakhs.
You should avail exemption u/s-54 & file your ITR accordingly. Please disclose all details about sale & purchase in your ITR.
02. Now coming to the F/Y 2024-25 :
You intend to Sell Property No.2, which was acquired in 2023-24. Any Gain on Sale of it would be Short Term capital Gains & taxed accordingly.
Alternatively, you may hold this sale of property no.2 (for 2 years from its purchase) & avoid STCG
You are free to utilize the sale proceeds in a way you like, including paying off your housing Loan.
Please note to avail exemption u/s 54 only from investment in property no.3 & not 2.
Most welcome for any further clarifications. Thanks.

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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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