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Ramalingam

Ramalingam Kalirajan  |7162 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 14, 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 - May 06, 2024Hindi
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sir i am rahul , i am investing 25k monthly sip in tata small cap, paragh parikh flexi cap , sbi small and contra , bank of india small cap , are these funds good ?

Ans: Hi Rahul, that's great that you're investing in Mutual Funds (MFs) with a monthly SIP of Rs. 25,000! Disciplined investing is a key to building wealth for your future goals. Let's discuss your current MF choices:

1. Diversification is Key!

You've chosen four Small Cap Funds. While Small Caps offer potentially high returns, they also come with higher risk. Spreading your investments across different asset classes (like Large Caps or Flexi Caps) can help manage risk.

Consider a Broader Mix: A Certified Financial Planner (CFP) can help you analyze your risk tolerance and investment goals. They can suggest a diversified portfolio with a mix of funds like Large, Mid, and Flexi Cap Funds to potentially achieve your goals with a balanced approach.

2. Actively Managed Funds:

Pick Winners! Your chosen funds are actively managed, meaning fund managers try to outperform the market by picking stocks they believe will grow. Actively managed funds can outperform the market, but there's no guarantee.

Do Your Research! Actively managed funds charge higher fees than passively managed Index Funds. Research the fund's track record, investment philosophy, and fees before investing.

3. Review and Rebalance:

Market Changes! The stock market keeps changing. What looks good today might not be suitable tomorrow. Regularly reviewing your portfolio with a CFP is important.

Stay on Track! Rebalancing your portfolio periodically helps you maintain your target asset allocation and manage risk. A CFP can guide you on how often to review and rebalance your portfolio.

Remember, building wealth is a marathon, not a sprint. Sticking to your SIP plan, staying diversified, and regularly reviewing your portfolio with a CFP will help you navigate the market fluctuations and achieve your long-term financial goals.

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

Ramalingam Kalirajan  |7162 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 09, 2024

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I am 37 years old and doing below SIPs, please suggest if these are decent funds? Mirrae Asset Large & Mid Cap - 3000 Quant Small Cap - 5000 PGIM Mid Cap - 5000 Axis Mid Cap - 2500 Nippon Small Cap - 5000 UTI Nifty 50 Index - 3000 UTI Nift Next 50 Index - 2000 Parag Parikh Flex Cap - 3000
Ans: It's impressive to see your commitment to systematic investment plans (SIPs) at this stage of your financial journey. Your selection showcases a thoughtful mix of funds across various categories, reflecting a well-diversified approach.

Diversification is key to managing risk, and your choice of funds spanning large & mid-cap, small-cap, and flexi-cap categories demonstrates a balanced strategy.

As a Certified Financial Planner, I commend your focus on actively managed funds over index funds. While index funds offer lower expense ratios, they lack the potential for outperformance that actively managed funds can provide, especially in volatile markets.

However, it's essential to regularly review your SIPs to ensure they align with your financial goals and risk tolerance. Market dynamics and fund performance can warrant adjustments over time.

Consider consulting with a certified financial planner periodically to reassess your investment strategy and make informed decisions based on changing market conditions.

Remember, patience and discipline are crucial virtues in long-term investing. Stay committed to your financial plan, and you'll reap the rewards of disciplined investing over time.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7162 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 27, 2024

Asked by Anonymous - Jun 12, 2024Hindi
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Sir, I am new and I have started investing in SIP of 7 thousand from this month: quant small cap fund direct -1000, Tata small cap fund-500, quant mid cap fund direct- 1000, Nippon India large cap-1000, UTI nifty 50 index fund - 2000, JM FLEXI cap fund direct-500, Aditya Birla sunlife psu equity-1000 Please inform me whether these funds are good and also I hv plan to keep these sips for 10 yr horizon.
Ans: Your Current Investment Portfolio

You have started investing Rs. 7,000 monthly through SIPs. This is a great step towards building your financial future. Your portfolio includes a mix of small cap, mid cap, large cap, flexi cap, index, and sectoral funds. Here’s an analysis of your choices:

Small Cap Fund: Rs. 1,500
Mid Cap Fund: Rs. 1,000
Large Cap Fund: Rs. 1,000
Index Fund: Rs. 2,000
Flexi Cap Fund: Rs. 500
Sectoral Fund: Rs. 1,000
Evaluation of Your Portfolio

1. Small Cap Funds

Small cap funds can provide high returns. However, they come with high risk. Having Rs. 1,500 in small cap funds is acceptable, but be prepared for volatility.

2. Mid Cap Fund

Mid cap funds balance risk and return. They have growth potential with moderate risk. Your Rs. 1,000 investment here is well-placed.

3. Large Cap Fund

Large cap funds are more stable. They provide steady returns. Your Rs. 1,000 investment in a large cap fund is good for stability.

4. Index Fund

Index funds track the market. However, they do not adapt to market changes. This can limit returns. Instead, consider actively managed funds for better performance.

5. Flexi Cap Fund

Flexi cap funds provide flexibility. They invest across market caps. Your Rs. 500 in a flexi cap fund is a good choice for diversification.

6. Sectoral Fund

Sectoral funds focus on specific sectors. They carry higher risk. Rs. 1,000 in a sectoral fund is fine, but keep an eye on sector performance.

Disadvantages of Index Funds

Index funds mimic the market. They do not adjust to market conditions. This can limit potential returns. Actively managed funds offer professional management. They adapt to market changes and seize opportunities.

Disadvantages of Direct Funds

Direct funds need constant monitoring. They require you to actively manage and rebalance your portfolio. This can be time-consuming. Regular funds, managed through a Certified Financial Planner (CFP), offer professional advice and management.

Benefits of Actively Managed Funds

Actively managed funds aim to outperform the market. They are managed by experts who make strategic decisions. These funds can deliver higher returns compared to index funds.

Suggestions for Additional Investments

Since you plan to keep these SIPs for a 10-year horizon, consider these additions:

1. Balanced Advantage Funds

These funds adjust the equity-debt mix. They provide growth with stability.

2. International Funds

These funds invest globally. They offer diversification beyond Indian markets.

3. Debt Funds

These funds provide stability. They are good for balancing your portfolio.

Systematic Investment Plan (SIP)

Continue with your SIP approach. It helps in disciplined investing. SIPs also average out the purchase cost, reducing market timing risk.

Review and Rebalance

Regularly review your portfolio. Ensure it aligns with your goals and risk tolerance. Make adjustments if necessary.

Consult a Certified Financial Planner

A CFP can provide tailored advice. They manage your portfolio professionally and ensure your investments are aligned with your goals.

Final Insights

Your current mutual fund investments are diversified. However, consider replacing index funds with actively managed funds. This can enhance your returns.

Diversify further with balanced advantage, international, and debt funds. Continue with SIPs and consult a CFP for professional advice.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7162 Answers  |Ask -

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

Asked by Anonymous - Jun 19, 2024Hindi
Money
Sir, I am new and I have started investing in SIP of 7 thousand from this month: quant small cap fund direct -1000, Tata small cap fund-500, quant mid cap fund direct- 1000, Nippon India large cap-1000, UTI nifty 50 index fund - 2000, JM FLEXI cap fund direct-500, Aditya Birla sunlife psu equity-1000 Please inform me whether these funds are good and also I hv plan to keep these sips for 10 yr horizon.
Ans: Let's dive into a detailed analysis and provide you with comprehensive guidance on your SIP investments for a 10-year horizon. It's great to see your initiative in starting a systematic investment plan. Here's a thorough evaluation of your investment portfolio with a focus on various aspects to help you understand the implications of your choices and make informed decisions.

Understanding Your Current Investment Portfolio
You've chosen a diverse mix of mutual funds for your SIPs, which is a good strategy. This diversity helps in spreading risk and capturing growth from different segments of the market. Let's break down your investments into categories and analyze each one:

Small Cap Funds: You've invested in two small cap funds. Small cap funds have the potential for high growth, but they also come with high volatility.

Mid Cap Funds: You've allocated funds to a mid cap fund. Mid caps strike a balance between growth potential and risk.

Large Cap Funds: You've chosen a large cap fund, which provides stability to your portfolio with lower risk compared to small and mid cap funds.

Index Funds: You've invested in an index fund, which aims to replicate the performance of the Nifty 50 index.

Flexi Cap Funds: You've invested in a flexi cap fund, which offers the flexibility to invest across market caps.

Sector-Specific Funds: You've allocated funds to a PSU equity fund. Sector-specific funds can be volatile and are often dependent on the sector's performance.

Evaluating Small Cap Funds
Small cap funds can deliver impressive returns, especially in a growing economy. However, they are highly volatile and susceptible to market fluctuations. Over a 10-year horizon, these funds can provide substantial growth if the companies perform well.

Advantages:

High growth potential.
Beneficial in a bullish market.
Disadvantages:

High volatility.
Risk of significant losses during market downturns.
Mid Cap Funds: Balancing Growth and Stability
Mid cap funds offer a balance between the high growth potential of small caps and the stability of large caps. These funds invest in mid-sized companies that have significant growth potential and are more stable than small caps.

Advantages:

Potential for good returns.
Moderate risk compared to small caps.
Disadvantages:

Can be volatile.
Requires a longer investment horizon to mitigate risks.
Large Cap Funds: Stability and Consistent Returns
Large cap funds invest in well-established companies with a solid track record. These funds provide stability to your portfolio and are less volatile compared to small and mid cap funds.

Advantages:

Lower risk and volatility.
Consistent returns over the long term.
Disadvantages:

Lower growth potential compared to small and mid caps.
Returns may be modest.
Index Funds: A Critical Analysis
You've invested in an index fund which tracks the Nifty 50. Index funds are passively managed and aim to replicate the index's performance. While they offer diversification and low expense ratios, there are some drawbacks:

Disadvantages:

Limited to the performance of the index.
Cannot outperform the market.
Lack of active management to navigate market downturns.
Benefits of Actively Managed Funds:

Potential to outperform the market.
Active management to mitigate risks.
Flexibility in changing market conditions.
Flexi Cap Funds: Versatile and Adaptive
Flexi cap funds are versatile as they can invest across different market capitalizations. This flexibility allows the fund manager to capitalize on opportunities in any segment.

Advantages:

Diversification across market caps.
Ability to adapt to market conditions.
Disadvantages:

Performance highly dependent on the fund manager's expertise.
May have higher expense ratios.
Sector-Specific Funds: Concentrated Risk
You've invested in a PSU equity fund, which focuses on public sector undertakings. Sector-specific funds can be rewarding if the sector performs well but are highly risky.

Advantages:

High returns if the sector performs well.
Targeted exposure to a specific sector.
Disadvantages:

High risk due to concentration in one sector.
Performance is sector-dependent and can be volatile.
Active vs. Direct Funds: Considerations
You've chosen direct funds, which means you invest directly with the mutual fund company without intermediaries. While this can save on commission fees, there are advantages to investing through a Certified Financial Planner (CFP):

Disadvantages of Direct Funds:

Requires thorough research and understanding.
No professional guidance in fund selection and management.
Benefits of Investing through CFP:

Expert advice and tailored investment strategies.
Regular portfolio review and adjustments.
Better understanding of market trends and opportunities.
Long-Term Investment Strategy
A 10-year investment horizon is a substantial period, allowing you to ride out market volatility and benefit from compounding returns. Here's how you can make the most of your investments:

1. Stay Consistent with SIPs:
Continue your SIPs regularly to benefit from rupee cost averaging, which helps in buying more units when prices are low and fewer when prices are high.

2. Diversify Your Portfolio:
Ensure your portfolio remains diversified across different market caps and sectors to spread risk and capture growth from various segments.

3. Review and Rebalance:
Periodically review your portfolio with a CFP to ensure it aligns with your financial goals. Rebalancing helps in maintaining the desired asset allocation.

4. Monitor Performance:
Track the performance of your funds and compare them with benchmark indices. If a fund consistently underperforms, consider switching to better-performing alternatives.

5. Focus on Financial Goals:
Align your investments with specific financial goals, such as retirement, children's education, or buying a home. This helps in maintaining discipline and focus.

Final Insights
Investing in SIPs for a 10-year horizon is a smart choice. You've diversified across different types of funds, which is commendable. However, it's crucial to regularly review your portfolio, seek expert advice, and make adjustments as needed. Stay informed about market trends and remain consistent with your investments. Your financial journey is a marathon, not a sprint. With patience and prudent decision-making, you're likely to achieve your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

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Pushpa

Pushpa R  |33 Answers  |Ask -

Yoga, Mindfulness Expert - Answered on Nov 27, 2024

Asked by Anonymous - Nov 22, 2024Hindi
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Hi Pushpa, I start my day with morning meditation which brings calm and peace to my mind. But after first instance that angers me, the calm from the morning is lost and the mood for the entire day is disturbed. Although I don't express the anger outside in words or action, but the mind is definitely angered. What can I do so that words or actions don't anger me ? And if they do, how can I bring myself back to my calm state quickly ?
Ans: To remain calm even when faced with anger, it's essential to train the mind regularly, not just in the mornings. Here’s a simple way to handle it:

Mindful Breathing: When you feel anger rising, pause and take deep breaths. Slowly inhale for 4 counts, hold for 4, and exhale for 6 counts. This simple practice can calm your mind in moments.

Witness Your Anger: Instead of reacting, observe the anger. Tell yourself, "This is just a passing emotion. I don't need to hold on to it."

Practice Gratitude: Shift your focus to something positive—like a good moment from your day. Gratitude quickly softens anger.

Carry Peace Throughout the Day: After morning meditation, visualize yourself remaining calm no matter what happens. This mental preparation helps when challenges arise.

Remember, meditation and mindfulness need consistent guidance to become effective. A yoga or meditation coach can teach you techniques tailored to your personality and lifestyle. Self-practice is good, but expert guidance ensures you build resilience faster and avoid frustration.

When anger disrupts your peace, see it as a signal to return to your breath and inner calm—each time, you grow stronger.

R. Pushpa, M.Sc (Yoga)
Online Yoga & Meditation Coach
Radiant YogaVibes
https://www.instagram.com/pushpa_radiantyogavibes/

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Asked by Anonymous - Jun 09, 2024Hindi
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Milind Vadjikar  |706 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 27, 2024

Asked by Anonymous - Nov 27, 2024Hindi
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Hi Milind, Hope you are doing well. I am an NRI. I am 42-year-old. I am a Software engineer. My son is 11-year-old. Please share your guidance for better investment in MF or Stocks which has better returns with less risk. The plan is for my son’s education for his degree. Please find my plan. 1. I can spend 20K per month towards SIP. 2. Plan is for 8 years investment. 3. In next 8 years, my target is to make 40 to 50 lakhs Please provide your inputs to my following queries 1. Which mutual funds can help to achieve my above goal? 2. Is it better to invest in 2 to 3 mutual funds ? 3. How much I need to SIP to achieve my above goals? 4. How can I apply investments in the mutual fund from United Kingdom? 5. Do I need open DMAT account ? If so, please guide how can I do this from UK? 6. Do I need to do KYC? If so, please guide how can I do this from UK? Appreciate you if you guide me Thank you
Ans: Hello;

To generate a corpus of around 50 L in 8 years you have two options:

1. Start with 20 K monthly SIP and step it up each year by 15% upto 8 years.

2. Start with a monthly sip of 31 K which may yield you a corpus of around 50 L after 8 years.

A modest 12% return from equity mutual funds is considered.

Mutual funds will be certainly better then direct stocks from a risk perspective.

You may invest in a flexicap type mutual fund and a large and midcap type mutual fund in the proportion of 50:50 for your investment.

You may select any fund from the top quartile in these categories.

You don't need a demat account.

You will need to do KYC before investing, some investment apps/AMCs offer it to be done online even for NRIs.

Happy Investing;

...Read more

Anu

Anu Krishna  |1330 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 27, 2024

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I am a Single mother (divorcee) of 4year old kid. I was separated when the kid was around a year old, because of his habits and abusive nature. I didn't want my to go through the same The father or his family never asked to see the kid. Now my kid asks questions "where is my dad", "everyone has father, where is mine". It breaks my heart and i am not sure how to handle it. How can I tell my kid that the father doesn't want to be involved in a polite way so that it doesn't break my kid.
Ans: Dear Sushma,
I am sure this is really tough for you.
What I can suggest is actually reading out books to him that explain separation/divorce through stories. This will enable him to understand that there are families and not all families are the same. But do ensure that you give him a good image about his father. Bitterness as a seed can grow and that is not healthy for a child at all. As the story progresses, you may want to insert the truth that in some families, the father/mother are not involved and choose to be away. This maybe difficult for him to fathom right now but slowly comparing his life with his friends, he will have more questions as he grows up. Take it one day at a time...break the truth gently and very age appropriately and right now, stories seem to be the better way.

Later in life as he grows even older, he can choose to seek and understand the truth in his own way. It may seem like a big contrast then but he will know that you had in his childhood come from a space of concern for his emotional growth.

You may also check in with other single mothers and they will surely have some things to share on it...at the end of the day, do what you think is right as a mother for your child.

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...Read more

Ramalingam

Ramalingam Kalirajan  |7162 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 27, 2024

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Dear Sir, I am 38 years old and I want to invest 60 lakh in mutual fund as lumpsum or STP over one year. I am planning to break it to 4 parts of 15 lakh each and invest in Nifty 50, Nifty midcap 150, one multi cap and one flexi cap. I have an invest horizon of 20 years. I have invested in real estate so I have already diversified myself so want to stick to mutual funds for 60 lakhs. Please advise if this is wise or am I being dumb?
Ans: Your financial planning shows a clear and thoughtful approach. Allocating Rs 60 lakh with a 20-year horizon is wise. However, let’s evaluate your strategy to ensure optimal diversification, risk management, and returns.

Diversification Achieved:
Your existing real estate investments ensure risk is spread across asset classes.

Long-Term Horizon Advantage:
A 20-year horizon allows you to absorb market volatility and maximise compounding benefits.

Focus on Mutual Funds:
Sticking to mutual funds for this corpus is logical and efficient.

Reassessing Your Allocation Plan
Lumpsum vs Systematic Transfer Plan (STP):
Lumpsum investment can expose you to market timing risks. Use STP over 12–18 months to reduce volatility.

Equity Fund Categories Selection:
Your idea of investing in large-cap, mid-cap, multi-cap, and flexi-cap funds is balanced.

Issues with Index Fund Allocation
Concerns with Nifty 50 and Nifty Midcap 150:
Index funds lack active management, leading to missed opportunities during market fluctuations.

Benefits of Actively Managed Funds:
Active funds aim for better returns through expert fund manager insights and stock selection.

Advantages of Multi-Cap and Flexi-Cap Funds
Multi-Cap Funds:
These funds provide exposure across large-cap, mid-cap, and small-cap segments, ensuring balanced growth.

Flexi-Cap Funds:
Fund managers can freely allocate investments to market segments based on opportunities.

Complementary Approach:
Combining these funds with active large- and mid-cap funds ensures robust diversification.

Strategic Recommendations
Adopt a Blend of Active Funds:
Replace index funds with actively managed large- and mid-cap funds.

Focus on Quality Fund Selection:
Choose funds with consistent long-term performance and experienced fund managers.

Allocate Based on Risk Appetite:
Consider 60–70% allocation to equity funds for growth and 30–40% to hybrid or debt funds for stability.

Start STP Immediately:
Park your lumpsum in liquid funds and systematically transfer to equity funds monthly.

Taxation Awareness
Equity Mutual Funds Tax Rules:

LTCG above Rs 1.25 lakh is taxed at 12.5%.
STCG is taxed at 20%.
Debt Funds Taxation:
LTCG and STCG are taxed as per your income slab.

Plan Exit Strategy:
Use SWP (Systematic Withdrawal Plan) after 20 years to optimise tax benefits.

Risks and Monitoring
Mitigate Market Risks:
Diversified fund selection and STP lower volatility risks.

Review Regularly:
Monitor your portfolio yearly and rebalance if needed.

Avoid Over-Concentration:
Ensure no single fund category dominates your portfolio.

Additional Suggestions
Emergency Fund:
Ensure an emergency fund of at least 6–12 months' expenses.

Insurance Coverage:
If not already covered, secure adequate health and term insurance.

Avoid Unnecessary Additions:
Stick to mutual funds without over-diversifying into unrelated assets.

Final Insights
Your planned allocation reflects thoughtful diversification and long-term focus. Replacing index funds with actively managed funds can enhance returns. Using an STP will balance market volatility effectively. With consistent monitoring and expert fund selection, your Rs 60 lakh investment can achieve your 20-year 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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