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Ramalingam

Ramalingam Kalirajan  |10071 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 09, 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
Akshata Question by Akshata on May 09, 2024Hindi
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Hi sir can you suggest the which mutual funds give high return

Ans: Choosing mutual funds solely based on past returns can be risky as past performance may not necessarily indicate future performance. Instead, it's essential to consider various factors such as investment objectives, risk tolerance, and investment horizon. Here are some tips to help you select mutual funds that may potentially offer higher returns:

Investment Goals: Determine your investment goals, whether it's wealth creation, retirement planning, or saving for a specific goal. Different goals may require different investment strategies and risk profiles.
Risk Tolerance: Assess your risk tolerance to determine how much volatility you can tolerate in your investment portfolio. Higher returns often come with higher risk, so it's crucial to align your investments with your risk tolerance.
Diversification: Invest in a diversified portfolio of mutual funds across various asset classes such as equity, debt, and international funds. Diversification can help reduce overall portfolio risk and enhance long-term returns.
Fund Manager's Track Record: Evaluate the track record and experience of the fund manager managing the mutual fund. A skilled and experienced fund manager can make a significant difference in fund performance over the long term.
Expense Ratio: Consider the expense ratio of the mutual fund, which represents the annual fees charged by the fund house for managing the fund. Lower expense ratios can translate to higher returns for investors over time.
Consistency of Performance: Look for mutual funds that have demonstrated consistent performance over different market cycles rather than just focusing on short-term returns. Consistency indicates the fund's ability to deliver returns across various market conditions.
Fund House Reputation: Choose mutual funds offered by reputable fund houses with a strong track record of managing investor funds responsibly and ethically.
Regular Monitoring: Regularly monitor the performance of your mutual fund investments and review your investment strategy periodically to ensure it remains aligned with your financial goals and risk tolerance.
Remember, there's no guarantee of high returns in mutual fund investments, and it's crucial to invest with a long-term perspective while diversifying your portfolio appropriately.

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  |10071 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 26, 2024

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suggest mutual fund for long term for good returns
Ans: Selecting Mutual Funds for Long-Term Growth

Investing in mutual funds for long-term growth requires careful consideration of various factors to ensure the suitability of the funds for your financial goals and risk tolerance. Here's a comprehensive guide to help you navigate the selection process:

Understanding Long-Term Investment Objectives:

Before choosing mutual funds, it's essential to define your long-term investment objectives, such as wealth accumulation, retirement planning, or funding a specific financial goal. Understanding your investment horizon, risk tolerance, and return expectations will guide you in selecting suitable funds aligned with your objectives.

Analyzing Fund Performance and Track Record:

Evaluate the historical performance and track record of mutual funds over long-term periods, preferably five to ten years or more. Look for funds that have consistently outperformed their benchmarks and peers, demonstrating strong fund management capabilities and investment strategies conducive to long-term growth.

Assessing Fund Management Team:

Examine the expertise and experience of the fund management team responsible for making investment decisions. A skilled and seasoned fund manager with a proven track record of delivering consistent returns can significantly impact the long-term performance of the fund.

Examining Fund Portfolio and Strategy:

Review the composition of the fund's portfolio, including asset allocation, sectoral exposure, and diversification across stocks or securities. A well-diversified portfolio with exposure to different sectors and market caps can mitigate risks and enhance long-term growth potential.

Considering Risk Factors and Volatility:

Evaluate the risk profile of mutual funds, considering factors such as volatility, downside protection, and susceptibility to market fluctuations. While higher-risk funds may offer the potential for greater returns over the long term, they also entail increased volatility and downside risk, which may not be suitable for all investors.

Assessing Expense Ratios and Fees:

Compare the expense ratios and fees associated with mutual funds, including management fees, administrative costs, and other expenses. Lower expense ratios translate to higher returns for investors over the long term, as less of the fund's assets are consumed by fees and charges.

Choosing Fund Categories and Investment Styles:

Select mutual funds from different categories and investment styles to build a diversified portfolio that balances growth potential with risk mitigation. Consider allocating investments across equity funds, debt funds, hybrid funds, and thematic funds based on your risk appetite and investment objectives.

Seeking Professional Advice and Guidance:

Consult with a Certified Financial Planner (CFP) who can provide personalized advice and guidance tailored to your financial goals, risk tolerance, and investment preferences. A CFP can help you navigate the mutual fund landscape, select suitable funds, and construct a diversified portfolio optimized for long-term growth.

Conclusion:

Investing in mutual funds for long-term growth requires thorough research, careful analysis, and a disciplined approach to portfolio construction. By focusing on fund performance, management expertise, risk factors, and investment objectives, you can identify suitable mutual funds that align with your long-term financial goals and aspirations.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |10071 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 06, 2024

Asked by Anonymous - May 06, 2024Hindi
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Hi could you please tell me in which mutual funds should i invest in and would give me good returns
Ans: Mutual fund selection depends on various factors such as your financial goals, risk tolerance, investment horizon, and asset allocation preferences. Here are some popular mutual fund categories you may consider for potentially good returns:

Large Cap Funds:
Large-cap funds invest in well-established companies with stable earnings and strong market presence.
These funds offer relatively lower risk compared to mid and small-cap funds and are suitable for investors with a conservative risk appetite.
Mid Cap and Small Cap Funds:
Mid and small-cap funds invest in companies with high growth potential but higher volatility.
These funds can generate higher returns over the long term but come with increased risk. They are suitable for investors with a higher risk tolerance and longer investment horizon.
Multi Cap or Flexi Cap Funds:
Multi-cap or flexi cap funds have the flexibility to invest across large, mid, and small-cap stocks based on market conditions.
These funds offer diversification benefits and can adapt to changing market dynamics, making them suitable for investors seeking balanced growth opportunities.
Sector Funds:
Sector funds focus on specific sectors or industries such as technology, healthcare, or banking.
These funds can provide opportunities for higher returns if the selected sector outperforms the broader market. However, they also carry higher sector-specific risks.
Index Funds and Exchange-Traded Funds (ETFs):
Index funds and ETFs replicate the performance of a specific market index such as the Nifty or Sensex.
These funds offer low expense ratios and are ideal for investors seeking passive investment options with diversified exposure to the equity market.
Debt Funds:
Debt funds invest in fixed-income securities such as government bonds, corporate bonds, and money market instruments.
These funds provide stability and regular income, making them suitable for conservative investors or those with short-term investment goals.
Before investing, assess your financial goals, risk tolerance, and investment horizon. Consider consulting with a Certified Financial Planner or mutual fund advisor to create a personalized investment plan tailored to your needs and objectives. Regularly review your portfolio and make adjustments as needed to stay on track towards achieving your financial goals.

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |10071 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 01, 2025

Asked by Anonymous - Jul 06, 2025Hindi
Money
Dear Sir, My home loan is 24.5 LAC. And it's started from last year April 2024, my emi is 30,600 per month for 10 years, if i paid 10 LAC in Jan 2026 it will be beneficial for me or wait for sometime to pay pre closure amount
Ans: Your question is very timely and thoughtful.

You have already completed over one year of EMI payments.

You are also planning a Rs. 10 lakh prepayment in Jan 2026.

This shows strong discipline and intention to reduce debt early.

That is highly appreciated.

Let’s evaluate the benefit from all angles before making the decision.

Let’s assess your EMI schedule, tax benefits, interest savings, and liquidity needs.

We will also look at emotional peace, risk readiness, and overall financial health.

» EMI Tenure and Loan Progress

– Your loan began in April 2024. EMI is Rs. 30,600 for 10 years.

– By Jan 2026, you would have paid 21 EMIs. That is nearly 2 years of repayment.

– You would still have around 99 EMIs pending after Jan 2026.

– Most interest is paid in the first few years. That’s how home loan schedules work.

– So prepayment at this stage can save you substantial interest.

– But, the benefit must be compared with your other financial needs.

– This is not only about saving interest. It is about holistic financial planning.

» Interest Cost Evaluation and Savings Opportunity

– Your home loan interest rate is not mentioned. But let us assume a normal range.

– Most floating-rate loans now charge 8.5% to 9.5% annually.

– Prepaying Rs. 10 lakhs will reduce the outstanding principal sharply.

– As a result, the total interest over the loan period will reduce.

– You may save many lakhs over the long term by doing this early prepayment.

– You will also reduce your EMI period or future EMI amount.

– That helps you become debt-free faster.

– But, timing matters. January 2026 is still over 5 months away.

– You must consider where that Rs. 10 lakhs is now kept.

– Is it earning anything? If kept idle in savings, it gives low returns.

– In that case, prepayment gives better value.

– But if it is growing in mutual funds or long-term instruments, returns may be higher.

– Compare this interest cost versus what you earn from that Rs. 10 lakh.

– You must also think about safety, peace of mind, and future stability.

» Tax Benefits on Home Loan and Prepayment Impact

– Under Sec 24(b), you get deduction of up to Rs. 2 lakhs on home loan interest.

– This reduces your taxable income. Helps especially if you are in the 20% or 30% slab.

– Also, under Sec 80C, you get Rs. 1.5 lakh deduction for principal.

– But that Rs. 1.5 lakh 80C is usually covered by EPF, PPF, insurance, ELSS, etc.

– If you prepay Rs. 10 lakh, your interest in future years may fall.

– Then, the Rs. 2 lakh interest deduction under Sec 24(b) may not be fully used.

– But remember, you are spending Rs. 10 lakhs to save Rs. 2-3 lakhs of tax.

– That alone should not decide the choice.

– Interest saved is usually more than tax benefit lost in the long run.

– Prepayment still makes sense. But only if you are not compromising other goals.

– Always assess tax benefit as a secondary aspect, not the main reason.

» Your Liquidity and Emergency Readiness

– The biggest question is: Will you have enough money left after prepayment?

– Will you still have emergency funds of 6 to 12 months of expenses?

– Will you have cash for job loss, health issues, or family needs?

– Rs. 10 lakh is a big amount. Once paid, you cannot get it back easily.

– Banks do not refund prepayments. So you must be ready for cash crunch.

– If you have other liquid savings of at least Rs. 3 to 5 lakhs, then it is safe.

– But if this Rs. 10 lakh is your full backup, wait before prepaying.

– You must not become asset-rich but cash-poor.

– Also, do not disturb investments set for your long-term goals.

– Check how your mutual funds, PF, PPF, child goals, and retirement are aligned.

– Your financial safety net should never be at risk due to a home loan prepayment.

» Emotional Peace and Debt Reduction Mindset

– Paying off loans early gives peace of mind.

– Mentally, it feels lighter to reduce your EMI burden.

– For many families, freedom from loans matters more than returns from investment.

– If this Rs. 10 lakh is not required for your next 5 years, then prepaying is peaceful.

– But if the same money is helping you sleep better by keeping it in hand, wait.

– Your comfort and security are more important than any math.

– Financial planning is not only numbers. It is also emotional readiness.

– A good Certified Financial Planner balances both head and heart.

– If you feel better seeing lesser EMIs or faster closure, then go ahead with prepayment.

– If you fear losing liquidity or missing opportunities, then wait.

– In either case, the aim is to stay financially strong, not just interest-efficient.

» Other Choices to Use That Rs. 10 Lakh

– If you are not fully prepared for long-term goals, this Rs. 10 lakh may help.

– Retirement corpus, child education, spouse goals — all need investment.

– If those are underfunded, invest this Rs. 10 lakh in mutual funds.

– But not in index funds or direct funds.

– Index funds may look cheap, but they follow the market blindly.

– They underperform in volatile or sideways markets.

– Actively managed mutual funds by experienced managers adapt better.

– Direct funds also seem cheaper on surface.

– But there is no support, guidance, or review.

– Regular plans through a qualified MFD with CFP guidance add long-term value.

– The extra 0.5% cost gives better selection, periodic review, and mistake-avoidance.

– That brings better return than direct, unmanaged investing.

– So if you delay prepayment, don’t keep that Rs. 10 lakh idle.

– Put it to work through a long-term, diversified, tax-aware mutual fund portfolio.

– Match it to your goals, age, and risk appetite.

– Use only debt funds for less than 3 years. Use equity for more than 5 years.

– Also follow the updated capital gains tax rules now in force.

– These will apply when you exit mutual funds later.

– If this Rs. 10 lakh is not required in near future, investing may grow your wealth.

– If this feels unsafe, then home loan prepayment is still a good call.

» Ideal Approach Based on Situation

– If you have no major upcoming expense, then early prepayment is useful.

– If your emergency fund is untouched, then this move is secure.

– If your long-term goals are already funded, prepayment clears debt faster.

– If interest rate is above 9%, prepayment becomes even more beneficial.

– If job is stable and no income interruption is foreseen, go ahead.

– But if any of these are weak or uncertain, do not hurry.

– Wait for 6-12 months. Observe how rates, income, and expenses move.

– Meanwhile, invest that Rs. 10 lakh in a short-term fund with liquidity.

– Let that money earn better than savings account.

– If situation remains strong by Jan 2026, you may prepay with full confidence.

– Else, you can decide again at that point based on comfort and readiness.

– Either way, you are still progressing.

– Both options — prepayment or investing — are productive, if handled with thought.

» Finally

– You are thinking in the right direction. That’s the best start already.

– You are not ignoring the EMI burden. You want to plan ahead.

– That is very encouraging.

– Do not feel forced to prepay or delay.

– The right answer depends on your comfort, liquidity, and goals.

– Early prepayment is good if your financial base is ready.

– But there is no harm in waiting a few more months and reassessing.

– Peace and clarity are more important than urgency.

– You can also take part prepayment route. Pay Rs. 5 lakh in Jan 2026.

– Keep another Rs. 5 lakh for emergency or mutual fund.

– That brings the best of both.

– Stay debt-free, but also stay liquid and goal-focused.

– A Certified Financial Planner can help you model both paths and take balanced action.

– The right move is one that fits your full financial picture — not just the EMI part.

– Keep going strong.

– You are already ahead of many by asking this question today.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |10071 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 01, 2025

Asked by Anonymous - Jul 05, 2025Hindi
Money
I am 35yrs old and my monthly salary is 75k. I am married and I have family health insurance of 10 lakhs, I have a daughter and a son and we are expecting the third child in the month of December. I have started with SIP of 1k 3 months back. I am taking mortgage loan of 30 lakhs on the house for 13 % interest from IIFL kindly suggest me to utilise the loan amount properly in various ways possible to invest. I am planning to utilise for the coaching centre development and 10 lakhs is taken for my brothers kidney transplant treatment expenditure.
Ans: – You are managing family, career, and investments together.
– Starting SIP early is a very positive step.
– Taking responsibility for your brother’s treatment shows great strength.
– Planning coaching centre development is a wise idea.
– Having family health cover is also a good base already.

» Analysing the Loan and Its High Interest Rate

– Rs. 30 lakhs loan at 13% interest is quite costly.
– This means high EMI and high total interest outgo.
– Every rupee must be used carefully to avoid wastage.
– Unused funds from the loan must not sit idle.
– Interest burden will continue regardless of usage.

» Immediate Medical Emergency for Brother

– Rs. 10 lakhs for kidney transplant is necessary and unavoidable.
– Keep this amount fully liquid and easily accessible.
– Use savings account or short-term ultra-safe debt fund.
– Avoid locking this amount in business or market-linked funds.
– Medical treatment should be done on priority basis.

» Business Development – Coaching Centre Use

– This is an opportunity for future income growth.
– Plan expansion only after checking location demand.
– Avoid spending large amount at once.
– Phase out business investments over 6 to 12 months.
– Start with essentials like rent, furniture, and staff salary.
– Don’t overspend on branding or decoration initially.
– Use part of loan in setting up technology and marketing.
– Focus on breakeven as early as possible.

» Avoid Spending Full Loan Immediately

– You are not forced to use all Rs. 30 lakhs now.
– Keep a part of loan in low-risk parking place.
– Use short-term debt fund or liquid fund with no exit load.
– Withdraw when business or medical needs arise.
– Don’t allow funds to lie in savings account earning low interest.

» Do Not Use Any Amount for Consumption

– Don’t use loan money for personal luxury or lifestyle.
– No electronics, jewellery, or vehicles from this loan.
– You are paying 13% interest, use it only for value creation.
– Avoid giving any part of the loan to others as casual support.

» Managing EMI Alongside Household Budget

– EMI on Rs. 30 lakhs at 13% will be heavy.
– Your Rs. 75k salary will face pressure from EMI, SIP, and family.
– Keep fixed monthly expenses under tight control.
– Review all regular spends and cut non-essentials.
– Prioritise needs over wants for the next 2–3 years.
– Increase SIP only once your EMI is manageable.

» Continue SIP with Discipline

– Though amount is small, your SIP builds wealth habit.
– Don’t stop SIP even if budget becomes tight.
– Increase SIP slowly as income rises.
– Choose actively managed funds, not index funds.
– Index funds don’t protect during market fall.
– Active funds adjust to changes and give better protection.

» Direct Funds Are Not Ideal for You

– Avoid investing in direct mutual funds.
– You get no personalised support or guidance there.
– Wrong decisions can damage long-term wealth.
– Invest via regular plans with an MFD and CFP.
– Get full-time advice, updates, and goal tracking help.

» Emergency Fund is Missing

– You must keep Rs. 1–2 lakhs aside for emergencies.
– This should not come from loan amount.
– Build this over next few months from salary savings.
– Use high-liquidity options like liquid mutual funds or sweep FD.

» Child-Related Future Expenses

– You are expecting third child soon.
– Future expenses like education and health will increase.
– Avoid touching SIP or business funds for school fees.
– Plan separate SIPs for kids’ education goal later.
– Maintain health insurance with maternity cover wherever possible.

» Keep Personal and Business Accounts Separate

– Don’t mix business and personal funds.
– Create a separate bank account for coaching centre.
– Record all income and expense in simple format.
– Use business income to slowly repay loan too.

» Loan Repayment Should Be a Priority

– Try to repay part of loan early if possible.
– Business profit can be used to prepay some part.
– Even Rs. 2–3 lakhs paid early will reduce interest burden.
– Don’t wait for full term of loan.
– Avoid taking another loan till this one is cleared.

» Don’t Invest Remaining Loan in Risky Options

– Don’t try to grow loan money via equity investments.
– You are paying 13% interest.
– Most equity returns are not guaranteed and are market linked.
– If returns go down, you still pay full interest.
– Use loan only for fixed needs like business or treatment.

» Avoid Insurance-Cum-Investment Products

– Don’t use loan money for buying ULIPs or endowment plans.
– They give poor returns and lock your money.
– They mix insurance with investment, which is harmful.
– If you already hold such plans, review and consider surrender.
– Use that money in good mutual funds for better results.

» Long-Term Financial Strategy After Loan Use

– Once business is running, start surplus-based SIPs.
– Create specific SIPs for child education and retirement.
– Review insurance needs again after third child is born.
– Don’t over-rely on health cover from employer.
– Take term insurance separately for family safety.

» Monitoring and Support

– Review all goals every 6 months.
– Track loan balance, business income, SIP growth.
– A CFP can support you across all financial areas.
– Work with MFD for implementation and fund advice.

» Finally

– You are taking bold and smart steps under pressure.
– Rs. 10 lakhs for brother’s health is unavoidable.
– Use it only for that and keep it liquid.
– Use balance money gradually for coaching centre.
– Don’t spend full Rs. 30 lakhs in one go.
– Avoid luxury or emotional spending with loan money.
– Keep EMI low by avoiding misuse of loan.
– Continue SIP without fail.
– Avoid index funds and direct funds.
– Use only actively managed mutual funds through MFD.
– Repay loan as early as possible.
– Start new SIPs once income improves.
– Maintain strong financial habits and discipline.
– Your future will surely improve with right planning.

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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