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Ajit Mishra  | Answer  |Ask -

Answered on Aug 26, 2020

Nilanjan Question by Nilanjan on Aug 26, 2020Hindi
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I am sharing with you my present portfolio along with the purchase price.

Ans: Please advise whether should I hold, sell or buy these stocks.

1. Bajaj Finance  23 stocks @2850.00 each - Hold

2. Bata 2 stocks@1409.07 each- Hold

3. BPCL 20stocks@338.55 each- Hold

4. Eicher motors 2 stocks@17670.09each- Hold

5. Gail 50 stocks@77.76 each- Hold

6. HDFC Bank 40 stocks@1083.86each- Hold

7. ICICI Bank 20 stocks@ 374.14 each- Hold

8. L&T 50 stocks@1110.73 each- Hold

9. Relience 25 stocks @ 1183.36 each- Hold

10. SBI card 20 stocks@ 744.83 each- Hold

11. SBI 45 stocks@ 223.98 each- Hold

12. Tata motors 20 stocks@ 87.08 each – Hold for atleast 2-3 years

13. Tata Steel 30 stocks@274.18 each- Hold

14. Titan 25 stocks@ 974.51 each- Hold

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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You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |8319 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 11, 2024

Money
I have the following shared in my portfolio. Bajaj Hindustan Dcb bank Ircon international Kirloskar Ferro Lic housing finance Zee learn Shall I hold or sell
Ans: It's commendable that you're taking the time to review and reassess your investment portfolio. Making informed decisions is crucial for long-term financial growth and stability. Let's analyze your current stock holdings and explore whether you should hold or sell them, considering mutual funds as a viable alternative for diversification and professional management.

Current Stock Holdings Analysis
Bajaj Hindustan
Bajaj Hindustan is a well-known company in the sugar industry. However, the sugar industry is often subject to high volatility due to fluctuating commodity prices, government policies, and unpredictable weather patterns. This can make it a risky investment in the long term.

DCB Bank
DCB Bank is a mid-sized private sector bank with a diverse portfolio of financial services. While banking stocks can provide stable returns, they are also subject to economic cycles and regulatory changes. Mid-sized banks like DCB Bank can be more vulnerable to market fluctuations compared to larger, well-established banks.

Ircon International
Ircon International, an engineering and construction company, mainly deals with infrastructure projects. Infrastructure stocks can be lucrative, but they come with risks like project delays, cost overruns, and dependency on government contracts. This sector can be cyclical, with performance tied to economic growth and policy support.

Kirloskar Ferrous
Kirloskar Ferrous is involved in the manufacturing of pig iron and castings. The steel and iron industry is highly cyclical and capital-intensive, often impacted by global demand, trade policies, and raw material prices. This can lead to significant volatility in stock performance.

LIC Housing Finance
LIC Housing Finance is one of the leading housing finance companies in India. It is relatively stable due to the demand for housing finance. However, it can be affected by interest rate changes, regulatory policies, and the overall health of the real estate market.

Zee Learn
Zee Learn operates in the education sector, providing various educational services. The education sector has growth potential, especially with the increasing focus on quality education. However, it is also subject to regulatory changes and competition, which can impact its profitability.

Considering Mutual Funds for a Diversified Approach
Benefits of Mutual Funds
Diversification: Mutual funds spread investments across various sectors and asset classes, reducing risk.
Professional Management: Experienced fund managers actively manage the portfolio, making informed decisions based on market conditions.
Liquidity: Mutual funds offer high liquidity, allowing you to buy or sell units easily.
Tax Efficiency: Long-term investments in equity mutual funds enjoy favorable tax treatment.
Disadvantages of Direct Stocks
High Risk: Investing in individual stocks carries higher risk due to lack of diversification.
Market Volatility: Stocks can be highly volatile, and individual investors might find it challenging to time the market.
Time-Consuming: Managing a stock portfolio requires continuous monitoring and analysis.
Steps to Transition to Mutual Funds
Step 1: Evaluate Your Investment Goals
Identify your long-term financial goals, risk tolerance, and investment horizon. This will help in selecting appropriate mutual funds that align with your objectives.

Step 2: Diversify Your Portfolio
Diversify your investments across various mutual fund categories, such as equity, debt, and hybrid funds. This ensures a balanced portfolio that can weather market volatility.

Step 3: Systematic Investment Plan (SIP)
Start a SIP to invest regularly in mutual funds. SIPs help in averaging out market volatility and inculcate disciplined investing.

Analyzing Your Current Investments
Bajaj Hindustan: Hold or Sell?
Given the high volatility and risk associated with the sugar industry, consider selling Bajaj Hindustan. Reallocate the funds into diversified mutual funds for more stable returns.

DCB Bank: Hold or Sell?
Mid-sized banks like DCB Bank can be more vulnerable to economic cycles. Consider selling and diversifying into mutual funds that include a mix of large-cap and mid-cap stocks for balanced exposure.

Ircon International: Hold or Sell?
Infrastructure stocks can be cyclical and risky. Selling Ircon International and investing in infrastructure-focused mutual funds can provide diversified exposure with professional management.

Kirloskar Ferrous: Hold or Sell?
The steel and iron industry’s cyclical nature makes Kirloskar Ferrous a risky investment. Consider selling and reallocating to diversified mutual funds for more consistent returns.

LIC Housing Finance: Hold or Sell?
Housing finance companies are relatively stable but can still be affected by market changes. Selling LIC Housing Finance and investing in financial sector mutual funds can offer diversified exposure with professional oversight.

Zee Learn: Hold or Sell?
The education sector has growth potential but also regulatory risks. Consider selling Zee Learn and investing in mutual funds that include a mix of sectors, including education, for balanced growth.

Benefits of Actively Managed Funds
Expertise: Fund managers bring in-depth market knowledge and expertise.
Research-Driven: Decisions are based on thorough research and analysis.
Performance: Aim to outperform market benchmarks through strategic asset allocation.
Final Insights
Transitioning from direct stock investments to mutual funds can provide diversification, professional management, and potentially more stable returns. Selling your current holdings in Bajaj Hindustan, DCB Bank, Ircon International, Kirloskar Ferrous, LIC Housing Finance, and Zee Learn, and reallocating the funds into well-chosen mutual funds, can help achieve your financial goals more effectively.

Start a systematic investment plan (SIP) in equity mutual funds to benefit from disciplined investing and compounding returns. Diversify across equity, debt, and hybrid funds to balance risk and reward.

Your proactive approach to reviewing your portfolio is commendable. With strategic changes and disciplined investing, you can build a robust and diversified portfolio for long-term financial growth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8319 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 05, 2025

Money
Dear Sir, I am aged 40 years a aggressive investor I have recent corpus of 13 lac in mutual fund and doing SIP of Rs30500 monthly in following funds . Nippon small cap - 9000 , Tata small cap - 7500 , Quant Small cap - 6000 , kotak small cap - 5000 and Pgmi Flexi cap -3000 and a vision for next 22 years with step up of 10 %. I also invest in PPF of 12500 monthly and In EPF with 25000 basic salary and i will also get Rs 50 lac from various LIC policy at the age of 60 . I want to know that is my approach is right and what would be the future corpus at the age of 62 years .
Ans: You are doing a disciplined and smart job with your investments. You have a long-term horizon, a strong SIP commitment, and a clear goal in mind. That’s a big step many don’t take seriously. Let me now evaluate your approach from all angles. This will be a 360-degree review of your investment plan and future readiness.

Let us go step-by-step to understand if your approach is right and what the future looks like.

Your Current Financial Setup

You are 40 years old now.

You have a mutual fund corpus of Rs 13 lakh.

You invest Rs 30,500 monthly through SIP.

You invest in four small cap funds and one flexi cap fund.

You step up your SIP by 10% annually.

You have a PPF investment of Rs 12,500 monthly.

You contribute to EPF. Your basic salary is Rs 25,000.

You will receive Rs 50 lakh from LIC policies at age 60.

Your investment horizon is 22 years from now.

This is a solid plan and shows discipline. Now, let us evaluate it carefully with insights and suggestions.

Assessment of Mutual Fund Investments

You are investing heavily in small cap mutual funds.

Four out of five funds are from the small cap category.

Small caps give high returns, but they also carry high risk.

Over 22 years, this risk may work in your favour.

But the ride will be bumpy. There will be sharp ups and downs.

At times, you may see short-term losses. That is normal.

However, putting over 85% of SIP in small caps may be risky.

You need better diversification for stability.

Adding large cap and mid cap funds may balance the risk.

Your Flexi cap fund does help a bit, but it is still not enough.

A blend of market caps will give smoother long-term growth.

It is better to slowly bring down small cap exposure to 50%.

Increase exposure to diversified and mid-cap funds gradually.

Don’t exit small cap funds suddenly. Take a phased approach.

This change will make your portfolio strong and well-balanced.

Step-Up SIP Strategy – Strong and Effective

Increasing SIP by 10% annually is a smart idea.

This fights inflation and grows your wealth faster.

It uses your rising income to build a big corpus.

Many investors ignore step-up. You are doing it correctly.

Keep increasing the SIP without fail every year.

Even a break in step-up can delay your target.

Review your SIPs yearly and adjust as income rises.

This strategy will help you reach your target corpus faster.

Investment in PPF – A Safe Long-Term Cushion

PPF offers guaranteed, tax-free interest.

You are investing Rs 12,500 monthly in PPF.

Over 22 years, this will become a strong safe corpus.

It adds stability to your overall financial plan.

PPF is good for retirement since it is risk-free.

Keep continuing till maturity. Do not withdraw early.

Interest rate may vary, but long-term returns are good.

You also get tax exemption under Section 80C.

This risk-free asset will protect you from equity market shocks.

EPF – A Reliable Retirement Contributor

Your EPF is linked to your Rs 25,000 basic salary.

The employer also contributes monthly.

Over 22 years, this will grow into a big amount.

EPF offers fixed, tax-free returns with no market risk.

It is an excellent tool for retirement planning.

Avoid premature withdrawals from EPF.

You can withdraw after retirement for use as income.

This will be a strong pillar of your retirement security.

LIC Maturity at Age 60 – A Special Boost

You will receive Rs 50 lakh from LIC policies at age 60.

This will come at a perfect time near retirement.

You must check if these are traditional or ULIP plans.

Traditional plans offer low returns, mostly below inflation.

ULIPs carry market risk and high charges.

If these are investment-cum-insurance plans, surrendering is wise.

You can reinvest that surrender amount in mutual funds.

Use proper asset allocation while reinvesting.

For insurance needs, use only term insurance.

Reinvesting in mutual funds can make this Rs 50 lakh grow further.

Future Corpus at Age 62 – What to Expect

With SIPs, EPF, PPF and LIC money, your total savings will be huge.

Your mutual fund corpus will grow rapidly with step-up.

Your PPF and EPF will grow safely, year after year.

LIC amount will give a big boost just before retirement.

With 10% SIP step-up, your corpus can cross Rs 9 to 10 crore.

Exact figure depends on market returns, SIP discipline, and inflation.

But you are definitely on the right path to reach financial freedom.

You are preparing for retirement very well.

This kind of planning gives peace of mind and confidence.

Things You Are Doing Right – A Quick Look

Strong SIP discipline and long-term vision.

Investing in equity for long-term wealth creation.

Following step-up SIP approach.

Investing in PPF and EPF for safe returns.

Keeping investment horizon of 22 years.

Maintaining separate LIC maturity plans.

You are showing smart behaviour as an aggressive investor.

Key Improvements You Should Consider

Reduce small cap exposure to 50% slowly.

Add more mid-cap and flexi cap funds.

Avoid overlapping funds from same category.

Review performance of all funds every 6 months.

Check expense ratios and consistency of returns.

Track goal progress once a year with clear targets.

Make sure your portfolio has good asset allocation.

Don’t hold funds only based on past returns.

Always go through a Certified Financial Planner for changes.

This will make your portfolio more stable and return-oriented.

Important Taxation Insight

Long-Term Capital Gains above Rs 1.25 lakh are taxed at 12.5%.

Short-Term Capital Gains are taxed at 20%.

Plan redemptions smartly to reduce tax.

Use staggered withdrawals near retirement.

Redeem equity funds over time, not all at once.

PPF and EPF are tax-free. LIC maturity is also tax-free.

But for mutual funds, plan redemptions with tax efficiency.

This will help you protect your wealth from tax erosion.

Important Notes on Fund Types and Investments

Do not use direct mutual funds if you are not an expert.

Direct funds need self-review and research, always.

There is no handholding or guidance with direct funds.

If you miss fund underperformance, losses may happen.

Regular funds through MFD with CFP advice are safer.

CFP will do goal review, fund analysis and rebalancing.

This adds value and protects your goals from derailment.

Always go through a trusted CFP for a 360-degree plan.

Your long-term wealth deserves the right expert attention.

Finally – Our Insights for You

You are on a great track with vision and discipline.

You are investing smartly across equity and debt.

With minor changes, your plan can become stronger.

Keep focus on diversification and risk management.

Review your goals and progress yearly with expert help.

Stick to your plan even during market falls.

Continue your SIP step-up and never skip contributions.

Use professional guidance to ensure smooth journey.

Your retirement will be financially independent and stress-free.

This approach will help you lead a proud, peaceful life post-60.

Stay committed and consistent. You are doing excellent already.

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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