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Should I invest in Ujjivan Small Finance, Tata Power, and PFC for the long term?

Samraat

Samraat Jadhav  |2057 Answers  |Ask -

Stock Market Expert - Answered on Aug 28, 2024

Samraat Jadhav is the founder of Prosperity Wealth Adviser.
He is a SEBI-registered investment and research analyst and has over 18 years of experience in managing high-end portfolios.
A management graduate from XLRI-Jamshedpur, Jadhav specialises in portfolio management, investment banking, financial planning, derivatives, equities and capital markets.... more
Asked by Anonymous - Aug 28, 2024Hindi
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Dear Sir Is ujjivan Small finance and Tata power and PFC is good for long term ?

Ans: except ujjivan all good
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  |6568 Answers  |Ask -

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

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Hi. Pls advise on HDFC bank, ITC, BHARTI AIRTEL , LINDE, HDFC AMC for long term 7 to 10 years
Ans: Evaluating Long-Term Investments: Mutual Funds vs. Direct Stocks
Investing in individual stocks like HDFC Bank, ITC, Bharti Airtel, Linde, and HDFC AMC for a long-term horizon of 7 to 10 years can be rewarding. However, choosing mutual funds over direct stocks may provide several advantages. Let's explore this in detail.

Understanding Direct Stock Investments
Potential Benefits of Direct Stock Investments

High Growth Potential: Individual stocks can offer significant returns if the companies perform well over the long term.

Ownership and Control: Direct stock investments provide shareholders with ownership, allowing them to vote on company matters.

Dividends and Capital Gains: Investors can benefit from both dividends and capital appreciation.

Challenges of Direct Stock Investments

Market Volatility: Stock prices can be highly volatile, leading to potential losses if not managed properly.

Research and Monitoring: Investing in individual stocks requires thorough research and continuous monitoring of market trends and company performance.

Concentration Risk: Investing in a few stocks can lead to concentration risk, affecting your portfolio if one company underperforms.

The Case for Mutual Funds
Advantages of Mutual Funds

Diversification: Mutual funds invest in a diversified portfolio of stocks, reducing the risk associated with individual stock investments.

Professional Management: Managed by experienced fund managers who make informed decisions based on market research and analysis.

Convenience and Simplicity: Investing in mutual funds is straightforward and does not require constant monitoring and research by the investor.

Liquidity: Mutual funds are highly liquid, allowing investors to redeem their units as needed.

Evaluating Actively Managed Funds

Performance and Expertise

Fund Manager Expertise: Actively managed funds benefit from the expertise of fund managers who can navigate market volatility and identify growth opportunities.

Performance Track Record: Many actively managed funds have a track record of outperforming the market and index funds over the long term.

Benefits Over Index Funds

Flexibility: Actively managed funds can adapt to changing market conditions, whereas index funds are tied to the performance of a specific index.

Potential for Higher Returns: With skilled management, actively managed funds can potentially deliver higher returns than index funds.

Choosing the Right Mutual Funds
Factors to Consider

Investment Objective: Align your mutual fund selection with your financial goals and risk tolerance.

Fund Performance: Review the historical performance of the mutual funds, focusing on long-term returns and consistency.

Expense Ratio: Consider the expense ratio, as lower costs can enhance net returns over time.

Fund Manager's Track Record: Evaluate the experience and track record of the fund manager in managing similar funds.

Assessing Your Current Stock Portfolio
HDFC Bank

Strengths: Leading private sector bank with a strong track record of growth and profitability.

Risks: Exposure to economic cycles and regulatory changes in the banking sector.

ITC

Strengths: Diversified business model with strong presence in FMCG, hotels, and agriculture.

Risks: Regulatory challenges in the tobacco business, which is a significant revenue contributor.

Bharti Airtel

Strengths: Major telecom operator with a strong presence in India and Africa.

Risks: High competition in the telecom sector and regulatory risks.

Linde

Strengths: Leading industrial gases company with a strong global presence.

Risks: Exposure to economic cycles and fluctuations in demand for industrial gases.

HDFC AMC

Strengths: One of the largest asset management companies in India with a robust track record.

Risks: Market risks and competition in the asset management industry.

Transitioning to Mutual Funds
Steps to Transition

Evaluate Current Holdings: Assess the performance of your current stock holdings and their alignment with your financial goals.

Identify Suitable Funds: Research mutual funds that align with your investment objectives and risk tolerance.

Gradual Transition: Consider a gradual transition to mutual funds to avoid potential market timing risks.

Seek Professional Guidance: Consult with a Certified Financial Planner to create a tailored investment strategy.

Reaching Your Financial Goals
Setting Realistic Goals

Define Your Target: Clearly define your financial target, such as accumulating Rs. 3-4 crore by the age of 45.

Regular Investments: Continue your systematic investment plans (SIPs) to maintain a disciplined investment approach.

Review and Adjust: Regularly review your investment portfolio and make adjustments based on market conditions and personal financial goals.

Diversification and Risk Management

Balanced Portfolio: Ensure a balanced portfolio with a mix of equity, debt, and other asset classes to manage risk effectively.

Regular Monitoring: Monitor your investments regularly and rebalance your portfolio as needed to stay on track with your goals.

Conclusion
Choosing mutual funds over direct stocks can offer diversification, professional management, and convenience, making it a prudent choice for long-term investment. Evaluating your current stock portfolio and gradually transitioning to suitable mutual funds can help you achieve your financial goals effectively.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Milind

Milind Vadjikar  |387 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 13, 2024

Asked by Anonymous - Oct 12, 2024Hindi
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Hi, age 40 years, monthly net salary Rs 85k, married , 1 kid. Recently have constructed new house. Ground floor commercial shops, and 1st floor residential 2bhk flat were we stay. Home loan 1.05 cr with monthly EMI of 85k for next 30 years & All current savings exhausted due to new construction. Commercial shops have potential for monthly rental income of 60k to 70k.please guide on below for strategy: 1) how to close home loan in next 10 years 2) considering 60 as retirement age, need corpus of 8 cr to fund kid education, marriage and for rest of livelihood.
Ans: Hello;

1. Immediately let out the commercial shops on long lease with yearly rent hikes. This is crucial to fund your loan EMI.

Assuming this to yield rental income of 70 K per month.

You will still need to shell out 15 K for the EMI amount from your income.

2. So after deducting EMI cut from your monthly pay we are left with
70 K.
Earmarking 30 K for your regular expenses, I suggest you start a monthly SIP of 40 K in a pure equity mutual fund with yearly top-up of 11% minimum.

This may grow into a corpus of 1.47 Cr after 10 years part of which you may utilise to settle off the overdue loan amount.

3. The balance corpus left after settling the loan is expected to be around 54 L. At this stage you will need enhance monthly sip to 1.5 L with 13 % yearly top-up for the next 10 years.

4. The corpus from SIP after the next 10 years may be 6.3 Cr. The balance corpus of 54 L may grow into a sum of 1.83 Cr. Both added will give you a comprehensive corpus of 8.13 Cr, as desired. ( A modest return of 13% from pure equity mutual funds is considered).

Happy Investing!!

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.

...Read more

Nayagam P

Nayagam P P  |3811 Answers  |Ask -

Career Counsellor - Answered on Oct 13, 2024

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Sir the median package at ssnce for cse core is less than rvce ise .So does it make more viable option considering placement in mind .I have a dream of becoming software engineer from my childhood. But my seniors are advising for rvce ise.what to do should I follow my dream or placement.I am a Bangalore resident and Tamil is my mother tongue.
Ans: Ashwin, my son, graduated from RVCE in 2023 and secured employment through campus placement with a reputable software company. Despite being among the highest achievers in COMEDK, he opted for ECE instead of the more accessible CSE. We did not compel him to join CSE. Following his second year, he progressively shown an interest in software and obtained several certifications through NPTEL, Internshala, and similar platforms. Regarding his experience, while ISE is commendable, CSE is the superior option. Simply enter 'RV placement statistics 2024'. Select the initial result to get the Placement Statistics of RV directly. The top placements are for Computer Science Engineering, followed by Electronics and Communication Engineering, and then Information Science Engineering. The recommendations of your seniors, your personal interests, and the branch with the highest placement statistics are distinct considerations. Kindly review the Course Curriculum for both CSE and ISE and make a decision. Kindly review one of my detailed responses below, in which I have explicitly outlined the stages, recommendations, and methods that a first-year engineering student should adhere to till their fourth year for campus placement. All the BEST for Your Prosperous Future.

To know more on ‘ Careers | Education | Jobs’, ask / follow Us here in RediffGURUS.

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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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