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Ramalingam

Ramalingam Kalirajan  |6995 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 20, 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
Preetam Question by Preetam on May 20, 2024Hindi
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I have started investing 25000/month from Jan 24 in MF, I go on purchasing 5 Different funds of 5000 per month is it right or should I stick to some 5 funds with sip, every 6month's I will increase my investment by 10% my age is 47 and at 56 I am looking to get 1CR corpus

Ans: Evaluating Your Investment Strategy
Introduction
Congratulations on starting a disciplined investment journey. Investing ?25,000 per month and planning to increase it by 10% every six months shows a strong commitment.

Current Strategy Assessment
Investing in five different mutual funds each month is a diversified approach. However, consistency is key in mutual fund investments.

Benefits of Systematic Investment Plans (SIPs)
SIPs offer the advantage of rupee cost averaging and discipline. Sticking to a set of funds through SIPs ensures regular investments without market timing.

Diversification and Consistency
Diversification across different mutual funds is beneficial. However, investing in too many funds can lead to overlap and management challenges.

Recommended Approach
Stick to Consistent SIPs: Choose five well-performing funds and invest consistently in them via SIPs.

Review and Rebalance: Regularly review your funds' performance and rebalance if needed. This keeps your portfolio aligned with goals.

Fund Selection
Choose funds that align with your risk tolerance and financial goals. A mix of large-cap, mid-cap, and multi-cap funds can provide balanced growth.

Suggested Allocation
Large-Cap Fund: ?5,000
Mid-Cap Fund: ?5,000
Multi-Cap Fund: ?5,000
Balanced Advantage Fund: ?5,000
Debt Fund: ?5,000
This allocation provides exposure to different market segments, ensuring diversification and stability.

Increasing Investments
Your plan to increase investments by 10% every six months is excellent. It leverages the power of compounding and accelerates wealth creation.

Example
Starting with ?25,000 and increasing by 10% every six months can significantly boost your corpus over nine years.

Achieving the ?1 Crore Goal
Your goal of accumulating ?1 crore by age 56 is achievable with disciplined investing and regular reviews.

Estimated Returns
Assuming a moderate annual return of 12%, your increasing SIP strategy can help you reach your target. The key is consistency and regular increments.

Monitoring and Adjusting
Regularly monitor your portfolio's performance. Make adjustments based on market conditions and fund performance. Consulting a Certified Financial Planner (CFP) can provide personalized guidance.

Professional Advice
A CFP can help you navigate market complexities, select the right funds, and make necessary adjustments. They offer tailored advice aligning with your financial goals.

Conclusion
Sticking to a consistent SIP strategy with a mix of funds and increasing investments regularly is a prudent approach. Regular monitoring and professional advice can help you achieve your ?1 crore goal by age 56.

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 Kalirajan  |6995 Answers  |Ask -

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Hello Sir, My name is Girish aged 38 years and I need your suggestions on the MF. I have started SIP in the following mutual funds.1. ICICI Prudential Bluechip Fund (G) - investing since a month - 5,000 per month 2. SBI Blue Chip Fund (G) - investing since a month - 5,000 per month 3. HDFC Balanced Advantage Fund - Direct Plan (IDCW) - investing since 14 months - 2,000 per month4. Nippon India Large Cap Fund - Regular Plan (G) - investing since 2 months - 2,000 per month 5. Parag Parikh Flexi Cap Fund - Direct Plan (G) - investing since 2 years - 2,000 per month 6. UTI MNC Fund - Direct Plan (G) - investing since 14 months - 2,000 per month I would like to know if my portfolio is good. I will be planning to invest for the next 10-15 years. What would be the corpus at the end of 15 years?Do you foresee any changes to be made in my portfolio? Please suggest.
Ans: Your portfolio consists of a mix of large-cap, flexi-cap, balanced advantage, and sectoral funds, which provides diversification across different market segments. However, it's essential to periodically review and rebalance your portfolio to ensure it remains aligned with your long-term financial goals and risk tolerance.

Consider assessing the performance of each fund relative to its benchmark and peers. If any fund consistently underperforms or deviates significantly from its investment objective, you may consider replacing it with a better-performing alternative.

Additionally, ensure that your asset allocation reflects your risk profile and investment horizon. If you have a long-term investment horizon of 10-15 years, you may consider adding more exposure to equity funds for potentially higher returns.

As for the corpus at the end of 15 years, it would depend on various factors such as the performance of the funds, the consistency of your contributions, and market conditions. You may use online SIP calculators to estimate the potential corpus based on your ongoing SIP contributions and expected returns.

Consulting with a financial advisor can provide personalized guidance tailored to your specific circumstances and objectives.

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