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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Nov 20, 2019

Mutual Fund Expert... more
Vinod Question by Vinod on Nov 20, 2019Hindi
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What are the best SIPs to start new investments?

Ans:

Multicap: Suitable options considering quality and value for money at present levels are UTI Equity Fund, Axis Multicap and Motilal Oswal Multicap 35

Focused: Suitable options considering quality and value for money at present levels are Axis Focused 25 and Motilal Oswal Focused 25

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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What are the best sips for a beginner to start investing?
Ans: Systematic Investment Plans (SIPs) are a disciplined way to start investing in mutual funds. They allow you to invest a fixed amount regularly, making it easier to build wealth over time. For beginners, SIPs offer the advantage of rupee cost averaging, reducing the impact of market volatility.

Choosing the Right Fund Category:
As a beginner, it's important to choose the right category of mutual funds for your SIPs. Avoid high-risk categories like small-cap or sectoral funds initially. Start with funds that have a balanced risk-return profile, such as large-cap or multi-cap funds. These funds invest in well-established companies and provide more stability.

Disadvantages of Direct Funds:
While direct funds may seem appealing due to lower expense ratios, they require more hands-on management. For a beginner, regular funds managed through a Certified Financial Planner (CFP) offer better guidance and ease. The CFP can help in fund selection, portfolio monitoring, and rebalancing, ensuring that your investments align with your goals.

The Benefits of Actively Managed Funds:
Avoid index funds as they merely replicate the market and do not offer the potential for outperforming it. Actively managed funds, on the other hand, involve expert fund managers making informed decisions to select stocks with higher growth potential. This can result in better returns over time, especially when guided by a CFP.

Starting with an Appropriate SIP Amount:
Begin with an amount you are comfortable with, even if it's as low as Rs 500 to Rs 1,000 per month. The key is consistency. Over time, you can increase your SIP contributions as your income grows. This approach helps in building the habit of saving and investing regularly.

Investment Horizon and Goals:
Consider your investment horizon and financial goals before starting your SIP. If you are investing for a long-term goal like retirement or a child’s education, equity mutual funds through SIPs are ideal. For short-term goals, debt-oriented funds may be more suitable.

Tax Efficiency:
Be mindful of the tax implications of your SIP investments. Equity mutual funds held for over a year qualify for long-term capital gains tax, which is relatively lower. This makes them tax-efficient for long-term investments. Additionally, investing in certain funds can help you save on taxes under Section 80C.

Review and Monitor Your SIPs:
Regularly review your SIP investments to ensure they are performing as expected. A CFP can help you track the performance of your funds and make necessary adjustments. This ensures that your portfolio stays aligned with your changing goals and risk appetite.

Emergency Fund Before SIP:
Before starting your SIPs, ensure you have an adequate emergency fund in place. This fund should cover at least 6 to 12 months of your monthly expenses. Having an emergency fund ensures that you won’t need to disrupt your SIP investments in case of unforeseen financial needs.

Avoid Over-Diversification:
While diversification is important, avoid spreading your investments across too many funds. Start with 2-3 funds that align with your risk profile and goals. Over-diversification can dilute your returns and make it harder to manage your portfolio.

Final Insights:
Starting SIPs is a smart and disciplined way to begin your investment journey. Focus on choosing the right fund category, start with a manageable amount, and ensure you have a clear investment horizon. Regular monitoring with the help of a Certified Financial Planner will help you stay on track towards achieving your financial goals.

Best Regards,

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

..Read more

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Ramalingam

Ramalingam Kalirajan  |7454 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 03, 2025

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Can you please tell me the best sips for long term 12 yrs investment plan
Ans: A 12-year SIP investment plan is ideal for wealth creation. Long-term investing helps overcome market volatility and compound returns effectively. Let’s create a structured plan for you to achieve your financial goals.

Why SIPs for Long-Term Investments
Power of Compounding: SIPs maximise returns over the long term by compounding.

Rupee Cost Averaging: It reduces risk by spreading investments across market cycles.

Discipline: Regular investments cultivate financial discipline for goal achievement.

Flexibility: You can start, pause, or modify SIPs based on financial needs.

Focus on Actively Managed Funds
Superior Returns: Active funds outperform passive ones by focusing on high-growth opportunities.

Dynamic Strategy: Fund managers adjust portfolios to adapt to market conditions.

Expert Guidance: Professional fund managers ensure better diversification and performance.

Recommendation: Choose actively managed funds with a strong track record and experienced managers.

Suggested Mutual Fund Categories for 12-Year Horizon
Equity Funds
Large-Cap Funds

Invest in well-established companies with stable growth.
These are ideal for moderate-risk investors.
Mid-Cap Funds

Focus on mid-sized companies with high growth potential.
Suitable for investors willing to take moderate to high risk.
Flexi-Cap Funds

Invest across large, mid, and small-cap companies.
Offer diversification and balanced growth.
Sector or Thematic Funds

Invest in specific sectors like technology or healthcare.
Suitable only for investors who can take higher risks.
Hybrid Funds
Aggressive Hybrid Funds

Combine equity and debt for balanced risk and returns.
Ideal for cautious investors seeking equity exposure.
Balanced Advantage Funds

Dynamically allocate between equity and debt based on market conditions.
Provide stable returns during volatile periods.
Setting Realistic Expectations
Wealth Accumulation: SIPs generate significant wealth over 12 years if done consistently.

Investment Amount: A monthly SIP of Rs. 10,000 may accumulate Rs. 50-60 lakhs in 12 years.

Growth Potential: Larger SIPs or additional investments can help achieve higher corpus goals.

Tax Implications on Mutual Fund Investments
Equity Funds: LTCG above Rs. 1.25 lakh is taxed at 12.5%.

Debt Components: Gains are taxed as per your income slab.

Tax Efficiency: Choose funds aligning with your tax bracket for better post-tax returns.

Importance of Diversification
Reduce Risk: Allocate investments across equity, hybrid, and debt funds.

Optimise Returns: Diversification balances high-growth and stable-income assets.

Avoid Concentration: Invest in 4-5 funds across different categories.

SIP Investment Strategies
Increase SIP Annually

Align SIPs with income growth to boost corpus.
Stay Invested

Avoid premature withdrawals to let compounding work.
Rebalance Periodically

Adjust portfolio based on market performance and life goals.
Final Insights
A 12-year SIP investment plan ensures disciplined wealth creation. Actively managed funds provide better growth opportunities than index funds. Focus on diversification, consistent investments, and regular reviews for optimal returns.

Your long-term commitment to SIPs can transform your financial future significantly.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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Latest Questions
Ramalingam

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Hello, I am looking for MF portfolio advice for my investments. I am planning to invest 60K monthly with 10% yearly stepup in MF to create corpus for my future goals. * Daughter higher studies: corpus ~3cr, time: 18yrs * Daughter marriage: corpus ~1cr, time: 24yrs * Retirement planning: Sufficient for me and my wife, time: 25 yrs Please suggest proper breakups, which MF should i go for. (Currently i am investing in Index funds only...50% Nifty50, 30% Nifty Next50, 20% Nifty Midcap 150...)
Ans: Your dedication to achieving long-term goals is commendable. Investing Rs. 60,000 monthly with a 10% yearly step-up is a disciplined approach. However, relying solely on index funds may not be the most effective strategy. Let’s review and refine your portfolio to maximise returns while managing risks.

Drawbacks of Index Fund Investments
Lack of Flexibility: Index funds mirror the market, offering no scope for outperformance. Actively managed funds, however, provide flexibility to adapt to market conditions.

Sectoral Concentration: Index funds often have higher weights in specific sectors. This increases risks during sector downturns.

Missed Opportunities: Index funds do not benefit from opportunities outside the index universe.

Tax Inefficiencies: While index funds save on fund management fees, their passive nature may lead to frequent portfolio adjustments, triggering short-term capital gains (STCG) taxes.

To optimise your investments, transitioning to a mix of actively managed funds is recommended.

A Comprehensive Investment Plan for Your Goals
1. Daughter’s Higher Studies (Corpus: Rs. 3 crore, Time: 18 years)
Focus on equity-oriented funds with exposure to large-cap, mid-cap, and flexi-cap categories.

Use SIP mode for disciplined investment. Allocate 50% of your monthly SIPs here initially.

Review and rebalance this portion every 3 years to align with market trends.

2. Daughter’s Marriage (Corpus: Rs. 1 crore, Time: 24 years)
Invest in a mix of mid-cap funds and hybrid funds to balance growth and stability.

Allocate 30% of your SIPs to this goal. As the timeline shortens, shift towards debt-oriented funds to reduce risks.

3. Retirement Planning (Time: 25 years)
For retirement, diversify into equity funds with some allocation in balanced advantage funds.

Ensure 20% of your SIPs flow here initially. Gradually increase allocation in safer instruments like debt mutual funds as you near retirement.

Proposed Monthly Investment Allocation
Daughter’s Higher Studies: Rs. 30,000
Daughter’s Marriage: Rs. 18,000
Retirement: Rs. 12,000
With the 10% annual step-up, maintain proportional increases across all goals.

Suggested Mutual Fund Categories
Large-Cap Funds

Offer stability and steady growth. Ideal for higher education and retirement goals.
Mid-Cap Funds

Potential for higher returns. Suitable for long-term goals like marriage and education.
Flexi-Cap Funds

Provide diversification by investing across large, mid, and small-cap stocks.
Balanced Advantage Funds

Balance equity and debt dynamically. Add stability to retirement planning.
Debt Funds

For short-term needs and to lower portfolio risk as goals near.
Key Portfolio Management Tips
Regular Monitoring: Review your portfolio semi-annually to ensure alignment with goals.

Systematic Transfer Plans (STPs): Gradually move equity investments to debt funds closer to goal timelines.

Tax Planning:

Equity Mutual Funds: LTCG above Rs. 1.25 lakh taxed at 12.5%.
Debt Funds: Both LTCG and STCG taxed as per your income tax slab.
Leverage these rules while rebalancing your portfolio.
Emergency Fund: Maintain 6-12 months of expenses in liquid funds or savings accounts to handle contingencies.

Insights on Direct vs. Regular Funds
Direct Funds: Require constant tracking and knowledge to optimise. Not suitable for most investors.

Regular Funds via a CFP:

Offers personalised advice tailored to your goals.
Simplifies rebalancing and tax optimisation.
Ensures access to a diversified, well-managed portfolio.
Investing with the guidance of a Certified Financial Planner ensures structured decision-making and goal alignment.

Final Insights
Your current commitment to investing and goal clarity is praiseworthy. However, fine-tuning your strategy is essential for optimal outcomes. Diversify beyond index funds, embrace actively managed funds, and align investments with your unique goals and timelines.

With disciplined execution, periodic reviews, and professional guidance, you can achieve financial security for yourself and your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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We are an unmarried couple living on rent in Pune. My landlord stays abroad so he doesn't have a problem as long as we don't create any problem for him. We have been here for over 3 years, working and living with the consent of our parents. Recently, a neighbour had an argument in the society and since then she has been finding a way to have us vacate the place because she thinks only married couples should be allowed. My landlord wants us to resolve the differences immediately. How do I resolve this amicably with the neighbour?
Ans: Let’s take a moment to imagine the space you and your partner share in Pune—not just the physical home, but the emotional and social landscape that surrounds it. Sometimes, when unexpected challenges arise, like the concerns of a neighbor, they offer us an invitation to explore deeper connections and understandings.

A Journey of Understanding
Picture this situation as a garden. Each relationship, whether with your neighbor, landlord, or your partner, is a unique plant requiring its own care and attention. When one plant seems to overshadow another, it doesn't mean they can't coexist; it simply means finding the right balance and nourishment for both.

Exploring Perspectives
Consider walking in your neighbor’s shoes for a moment. What might be beneath her insistence that only married couples reside in the society? Perhaps there’s a story, a belief, or a concern that’s shaping her actions. By gently uncovering her motivations, you open the door to empathy and understanding.

Communicating with Compassion
Imagine approaching your neighbor with the warmth of a handshake and the openness of a conversation. You might say, “I understand there may be concerns about our living situation. We’ve always strived to be respectful and considerate neighbors. Can we talk about any specific worries you might have?” This invites dialogue rather than confrontation, fostering a space where both sides can express their feelings.

Finding Common Ground
Think about the shared elements that bind a community together—respect, kindness, and mutual support. Perhaps there’s a way to reassure your neighbor of your commitment to these values. Offering to participate in community activities or addressing any specific concerns she has can build trust and dissolve misunderstandings.

Seeking Harmony
Envision a harmonious resolution where both your needs and your neighbor’s concerns are acknowledged. It might involve setting clear boundaries, demonstrating your reliability as tenants, or even finding creative solutions that respect everyone’s viewpoints. The goal isn’t to win a dispute but to cultivate a peaceful and respectful coexistence.

Embracing Collaboration
Sometimes, the most effective solutions emerge when both parties collaborate rather than confront. You and your neighbor might discover that, beneath the surface, there are shared interests or goals that can bridge the gap between differing perspectives. This collaboration can transform a potential conflict into an opportunity for stronger community bonds.

Reflecting on Your Path
As you navigate this situation, take a moment to reflect on what matters most to you and your partner. How can you honor your relationship while also respecting the community you’re part of? By aligning your actions with your values and approaching the challenge with empathy, you create a foundation for lasting harmony.

The Bigger Picture
Remember, every challenge is a chance to grow and deepen your connections. By addressing your neighbor’s concerns with compassion and openness, you not only work towards resolving the immediate issue but also contribute to a more understanding and cohesive community.

In this journey, trust in your ability to communicate effectively, empathize deeply, and find solutions that honor both your relationship and the community around you. As you move forward, let each step be guided by respect, understanding, and the shared desire for a peaceful coexistence.

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Recently, we had an Arranged Marriage after my Wife had amicably broken up from a Long Term Relationship, due to various Reasons. But she's still in touch with her Ex Boyfriend, they both are "Just Friends" now. Her Ex Boyfriend is getting Married, next Month. It is a Destination Wedding in another State. He has invited my Wife to his Wedding. My Wife wants to attend his Wedding, but I don't want to allow her. So, outrightly Refused to give her Permission to go for attending the Wedding of her Ex Boyfriend. My Wife got upset & called me "Insecure". Now, she's not talking with me properly & being Emotionally Distant, but she's still insistent upon going to attend the Wedding of her Ex Boyfriend. Now I don't understand whether my Wife still has any Feelings for her Ex Boyfriend or am I being Unreasonable, here? Is she justified in wanting to attend the Wedding of her Ex Boyfriend, in spite of being Married to me? Or am I justified in being Uncomfortable about it? Who is Right & who is Wrong here? And how to sort out this matter, amongst us, without involving her Ex Boyfriend?
Ans: Let’s pause for a moment and reflect on what’s really happening here—not just on the surface, but beneath it, where emotions and meanings intertwine. This isn’t simply about a wedding, an invitation, or even an ex. It’s about two people, you and your wife, navigating a new relationship, trying to understand each other’s worlds while also protecting your own.

A Curious Question
What if we looked at this situation differently? Instead of asking, Who’s right and who’s wrong? we ask, What does this moment teach us about trust, boundaries, and connection? You see, people often focus on the conflict, but conflicts are just doorways. Behind that door lies something far more valuable—a chance to grow together.

Your Perspective
You’ve drawn a line, and there’s a reason for that. Maybe it’s not about the wedding itself but what it symbolizes. Perhaps it stirs questions in you: Does this mean she values the past more than our present? Or maybe it touches a part of you that wonders, Am I enough? Will she choose me fully, without hesitation?

These are important questions. Not because they point to a problem, but because they show you care deeply about this relationship. You want to feel secure, and that’s not unreasonable.

Her Perspective
Now, imagine her world for a moment. To her, this invitation may not be about her ex at all. It may represent closure, a way of proving to herself—and to you—that the past has no hold on her. When you said no, perhaps she didn’t hear your concern but instead felt her integrity questioned. People often respond to what they feel is happening, not what is said.

A Different Kind of Conversation
What if, instead of focusing on “permission” or the wedding itself, you shared your feelings in a way that invites her to understand you? You might say, “When I think about you going, I feel uncomfortable. Not because I don’t trust you, but because I care so deeply about us, and this stirs something in me that I want to understand better. Can we talk about this together?”

Notice how that changes the dynamic? It shifts from conflict to curiosity, from control to connection. When you share your vulnerability, you invite hers.

The Path Forward
Here’s something worth trying:

Invite Understanding: Begin by asking her what attending the wedding means to her. Not as a challenge, but with genuine curiosity. People often reveal surprising truths when they feel safe.

Share Your Truth: Let her know this isn’t about her ex, but about your own feelings and the meaning you place on her decision. For example, “I want to feel like we’re prioritizing our relationship in every choice we make. How do you see this fitting into that?”

Find the Balance: The goal isn’t to force a decision but to discover what feels right for both of you. Maybe there’s a middle ground where you both feel respected. Or maybe, through this conversation, you’ll find clarity on what truly matters.

Focus on Connection: This isn’t about a single event; it’s about building a foundation. Every conversation, every decision, is a brick in the home you’re building together. Make sure the bricks are laid with care and mutual respect.

The Bigger Picture
What matters most isn’t whether she attends the wedding. It’s whether, in navigating this, you both feel closer, more understood, and more aligned. That’s the real success—turning a moment of tension into a story of growth.

When you approach this not as a problem to solve but as an opportunity to deepen your relationship, you may discover that the answers come naturally. Because people don’t just need to be “right”; they need to feel loved, valued, and understood. And that’s something both of you can give to each other, starting now.

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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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