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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on May 16, 2022

Mutual Fund Expert... more
Kausalya Question by Kausalya on May 16, 2022Hindi
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Money

Please suggest whether my investment are good:

1. Canara Robeco Emerging Equities - Growth

2.Mirae Asset Equity Allocator Fund of Fund growth - 1.65lakh

3. Mirae Asset Large Cap Fund - growth

4.Mirae Asset Tax Saver Fund - growth

5.Nippon India Gold Savings Fund - growth

6. SBI Gold Fund - Growth

7.SBI Small Cap fund

8.Tata Index Fund -

9.UTI Core Equity Fund

10. UTI Nifty Index Fund

11. UTI Nifty Next 50 Index Fund

Ans: Funds are not bad; however, there are too many funds

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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Mutual Funds, Financial Planning Expert - Answered on Apr 04, 2024

Ramalingam

Ramalingam Kalirajan  |6508 Answers  |Ask -

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

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Hello Sir I m investing 9000 in SBI small cap & 9000 in Quant small cap in Feb'2024. Also 6000 in Parag Parikh Flexi Cap and 6000 in Quant Flexi Cap for the period for 20+ years. Please review my funds. Is these are good to continue.
Ans: It's commendable that you're investing with a long-term horizon in mind. Let's review your fund choices:

SBI Small Cap: Small-cap funds typically carry higher risk but also the potential for higher returns over the long term. Given your investment horizon of 20+ years, investing in small-cap funds can be a sound strategy, as they have the potential to outperform over extended periods.

Quant Small Cap: Similar to SBI Small Cap, Quant Small Cap also falls into the small-cap category. It's essential to understand that small-cap funds can be volatile in the short term but may offer significant growth opportunities over the long run.

Parag Parikh Flexi Cap: Flexi-cap funds provide flexibility to invest across market capitalizations based on market conditions. Parag Parikh Flexi Cap is known for its diversified approach and focus on quality stocks. It's a suitable choice for long-term investors seeking exposure to a mix of large, mid, and small-cap stocks.

Quant Flexi Cap: Flexi-cap funds like Quant Flexi Cap offer flexibility in asset allocation, allowing the fund manager to adapt to changing market conditions. While Quant Flexi Cap may provide growth opportunities, it's essential to monitor its performance and ensure it aligns with your investment objectives.

Overall, your fund selection reflects a diversified approach across small-cap and flexi-cap categories, which can potentially provide robust growth prospects over the long term. However, it's essential to regularly review your investments to ensure they remain aligned with your financial goals and risk tolerance.

Consider consulting with a Certified Financial Planner periodically to reassess your investment strategy and make any necessary adjustments based on changing market dynamics and personal circumstances.

Best Regards,

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

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Ramalingam

Ramalingam Kalirajan  |6508 Answers  |Ask -

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

Money
Hi Sir, My name is Krishna & I am 38 years old and I have a savings of around 40Lakhs in bank in FD's and I started investing 20000 every month from Jan-2024 in these mutual funds [DSP Nifty 50 Equal Weight Index Fund Direct-Growth, HDFC Index Fund Nifty 50 Plan - Direct Plan, Nippon India Large Cap Fund - Direct Plan, Edelweiss Large Cap Fund - Direct Plan, ICICI Prudential Bluechip Fund - Direct Plan-Growth, Kotak Emerging Equity Fund - Direct Plan, Motilal Oswal Midcap Fund - Direct Plan,Axis Small Cap Fund - Direct Plan, Kotak Multi Asset Allocator FoF - Dynamic - Direct Plan, Edelweiss Aggressive Hybrid Fund - Direct Plan]. I checked through money control and value research before investing in these mutual funds. Please let me know if my investments are good?
Ans: Hello Krishna,

Your commitment to financial planning and investment is commendable. Let's analyze your mutual fund portfolio to ensure it aligns with your goals and risk tolerance.

Portfolio Composition
Your portfolio comprises a diverse range of mutual funds, spanning various categories including large-cap, mid-cap, small-cap, index funds, and hybrid funds. This diversified approach spreads risk across different market segments and investment styles.

Fund Selection
Index Funds: Investments in index funds like DSP Nifty 50 Equal Weight Index Fund and HDFC Index Fund Nifty 50 Plan provide exposure to the broader market, capturing the performance of the Nifty 50 index constituents.

Active vs. Passive Management:
While you've included both actively managed mutual funds and index funds (ETFs) in your portfolio, it's important to understand the differences between the two. Actively managed funds aim to outperform the market through active stock selection and portfolio management, while index funds passively track a specific index's performance.
Benefits of Actively Managed Funds:
Actively managed funds offer the potential for higher returns compared to index funds, especially during market inefficiencies or when skilled fund managers can identify lucrative investment opportunities. Additionally, active management allows for flexibility in portfolio construction and adjustments based on market conditions.
Potential Disadvantages of Index Funds:
While index funds offer low expense ratios and broad market exposure, they may lack the potential for outperformance compared to actively managed funds. Additionally, they're subject to tracking error, which occurs when the fund's performance deviates from the index it's designed to replicate.

Large Cap Funds: Nippon India Large Cap Fund, Edelweiss Large Cap Fund, and ICICI Prudential Bluechip Fund offer stability and growth potential by investing in established companies with strong fundamentals.

Mid Cap and Small Cap Funds: Motilal Oswal Midcap Fund and Axis Small Cap Fund aim to capitalize on the growth potential of mid-sized and small-sized companies, albeit with higher volatility.

Hybrid and Multi-Asset Funds: Kotak Multi Asset Allocator FoF - Dynamic and Edelweiss Aggressive Hybrid Fund provide a blend of equity and debt exposure, suitable for investors seeking balanced returns with lower risk.

There are some advantages to consider direct funds, and the cost savings can be significant in the long run. However, there are some potential benefits to using a regular MFD:
Advantages of Investing Through a Mutual Fund Distributor (MFD):
• Personalized Advice: MFDs can be helpful for beginners or those who lack investment knowledge. They can assess your risk tolerance, financial goals, and investment horizon to recommend suitable mutual funds. This personalized guidance can be valuable, especially if you're new to investing.
• Convenience: MFDs handle all the paperwork and transactions on your behalf, saving you time and effort. They can help with account setup, SIP registrations, and managing your portfolio across different funds.
• Investor Support: MFDs can be a point of contact for any questions or concerns you may have about your investments. They can provide ongoing support and guidance throughout your investment journey.

Fund Research
Cross-referencing your fund selections with reputable sources like Moneycontrol and Value Research is a prudent approach. These platforms offer valuable insights into fund performance, risk metrics, and portfolio composition, aiding informed investment decisions.

However, relying solely on mutual fund ratings overlooks individual financial goals and risk tolerance. Ratings may not account for changing market conditions or long-term performance. Blindly following ratings can lead to a mismatched portfolio, potentially resulting in suboptimal returns and increased investment risk over time.

Continuous Monitoring
Regularly reviewing your portfolio's performance, fund ratings, and market dynamics ensures alignment with your financial goals and risk appetite. Periodic rebalancing and adjustments may be necessary to optimize returns and manage risk effectively.

Conclusion
Your mutual fund portfolio exhibits diversity and a thoughtful selection process, indicating a sound investment strategy. By staying informed, maintaining a disciplined approach, and periodically reassessing your investments, you're well-positioned to achieve your financial objectives.

Best Regards,

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

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Latest Questions
Moneywize

Moneywize   |165 Answers  |Ask -

Financial Planner - Answered on Oct 06, 2024

Asked by Anonymous - Oct 05, 2024Hindi
Money
I’m from Pune. I’m 48 with two children. Should I invest in ELSS funds to save tax, or should I focus on traditional instruments like PPF and fixed deposits?
Ans: Deciding between Equity Linked Savings Schemes (ELSS) and traditional investment instruments like Public Provident Fund (PPF) and Fixed Deposits (FDs) depends on various factors, including your financial goals, risk tolerance, investment horizon, and tax-saving needs. Here's a comprehensive comparison to help you make an informed decision:

1. Understanding the Investment Options

a. ELSS (Equity Linked Savings Schemes)

• Nature: Equity Mutual Funds with a tax-saving component.
• Lock-In Period: 3 years (shortest among tax-saving instruments under Section 80C).
• Returns: Potentially higher returns as they are invested in equities, but subject to market volatility.
• Tax Benefits: Investments up to ?1.5 lakh per annum are eligible for deduction under Section 80C.
• Liquidity: Relatively higher liquidity post the lock-in period compared to other tax-saving instruments.

b. PPF (Public Provident Fund)

• Nature: Government-backed long-term savings scheme.
• Lock-In Period: 15 years.
• Returns: Moderate and tax-free returns, revised periodically by the government (typically around 7-8% p.a.).
• Tax Benefits: Investments up to ?1.5 lakh per annum qualify for deduction under Section 80C. The interest earned and the maturity amount are tax-free.
• Safety: Very low risk as it's backed by the government.

c. Fixed Deposits (FDs)

• Nature: Fixed-term investment with banks or post offices.
• Lock-In Period: Varies; typically no lock-in for regular FDs, but tax-saving FDs have a 5-year lock-in.
• Returns: Fixed interest rates, generally lower than ELSS but higher than savings accounts. Current rates vary but are around 5-7% p.a. for tax-saving FDs.
• Tax Benefits: Investments up to ?1.5 lakh in tax-saving FDs qualify for deduction under Section 80C.
• Safety: Low risk, especially with reputable banks.

2. Factors to Consider

a. Risk Appetite

• ELSS: Suitable if you are willing to take on market-related risks for potentially higher returns.
• PPF & FDs: Ideal for conservative investors seeking capital protection and guaranteed returns.

b. Investment Horizon

• ELSS: 3-year lock-in period, but generally better for medium to long-term goals.
• PPF: 15-year commitment, suitable for long-term goals like retirement or children's education.
• FDs: Flexible, but tax-saving FDs require a 5-year lock-in, suitable for medium-term goals.

c. Returns

• ELSS: Historically, ELSS funds have outperformed PPF and FDs over the long term, but with higher volatility.
• PPF: Offers stable and tax-free returns, which are beneficial in a low-interest-rate environment.
• FDs: Provide guaranteed returns, useful for capital preservation but may lag behind inflation and equity returns over time.

d. Tax Efficiency

• ELSS: Returns are subject to capital gains tax. Short-term (if held for less than 3 years) gains are taxed as per your income slab, while long-term gains (exceeding ?1 lakh) are taxed at 10%.
• PPF: Completely tax-free returns.
• FDs: Interest earned is taxable as per your income slab, which can reduce the effective returns.

3. Recommendations Based on Your Profile

Given that you are 48 years old with two children, your investment strategy should balance between growth and safety, considering your proximity to retirement and financial responsibilities.

a. Diversified Approach

A balanced portfolio that includes both ELSS and traditional instruments like PPF and FDs can help mitigate risks while aiming for reasonable growth.

• ELSS: Allocate a portion (e.g., 30-40%) to ELSS to benefit from potential equity growth, which can help in wealth accumulation for retirement or funding children's education.
• PPF: Continue contributing to PPF for long-term, stable, and tax-free returns. Given its 15-year tenure, it aligns well with retirement planning.
• FDs: Use FDs for short to medium-term goals or as a part of your emergency fund, ensuring liquidity and capital preservation.

b. Consider Your Tax Bracket

If you are in a higher tax bracket, maximizing tax-saving instruments under Section 80C can provide significant tax relief. ELSS, PPF, and tax-saving FDs all qualify, so diversifying among them can spread risk and optimize tax benefits.

c. Assess Liquidity Needs

Ensure you have sufficient liquidity for unforeseen expenses. While ELSS has a shorter lock-in compared to PPF, both still tie up funds for a few years. Maintain a separate emergency fund in a more liquid form, such as a savings account or liquid mutual funds.

d. Review Your Risk Tolerance

At 48, with retirement possibly 10-20 years away, a moderate risk appetite might be suitable. ELSS can offer growth potential, while PPF and FDs provide stability.

4. Additional Considerations

• Emergency Fund: Ensure you have 6-12 months' worth of expenses saved in a highly liquid form.
• Insurance: Adequate health and life insurance are crucial, especially with dependents.
• Debt Management: If you have any high-interest debt, prioritize paying it off before locking funds in fixed instruments.

5. Consult a Financial Advisor

While the above guidelines provide a general framework, it's advisable to consult with a certified financial planner or advisor. They can offer personalized advice tailored to your specific financial situation, goals, and risk tolerance.

Finally, both ELSS and traditional instruments like PPF and FDs have their unique advantages. A diversified investment strategy that leverages the strengths of each can help you achieve a balanced portfolio, ensuring both growth and security. Given your age and family responsibilities, striking the right balance between risk and safety is essential for long-term financial well-being.

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Kanchan

Kanchan Rai  |364 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Oct 06, 2024

Asked by Anonymous - Aug 11, 2024Hindi
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Relationship
This is urgent. Pls help. My son 18 yrs has been in a relationship with his classmate. He is intelligent and very venerable as he is innocent.She has been abetting him and his behaviour on the family has changed. He shouts at us and kind of surrendered himself to her. Anything we say irritates him. He has started telling lies. He locks the room and is on the phone hours together. Even if he tells that he is sleepy, she doesn't allow him to sleep. He doesn't know that we are aware of it. We tried to indirectly talk but he doesn't care about anything as he blindly follows her instructions. He doesn't listen to anyone. We feel something is wrong. Should we talk to her parents or use some law? Making them sit and advice doesn't work.
Ans: The challenge here is that he’s likely in a highly emotional and intense phase of his life, where his attachment to this person may feel all-consuming. When someone feels like they're being judged or controlled, they tend to push back harder, and it seems that's what’s happening with your son. Approaching him with confrontation or involving legal measures may only cause him to withdraw even more.

What he needs right now, even if he doesn't realize it, is understanding and connection. If you can find a way to express your concern for his well-being, not just your disapproval of his relationship, it might open up a space for dialogue. He may feel trapped in this relationship in ways he can't yet see. Your role can be to help him feel safe enough to reflect on his own choices, rather than feel he has to defend them.

This is a delicate situation, and while it may seem urgent, sometimes a softer approach allows for a deeper breakthrough. Your patience, love, and ability to listen might be the key to guiding him through this

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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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