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Hemant

Hemant Bokil  | Answer  |Ask -

Financial Planner - Answered on Feb 15, 2023

Hemant Bokil is the founder of Sanay Investments. He has over 15 years of experience in the field of mutual funds and insurance.Besides working as a financial planner, he also hosts workshops to create financial awareness. He holds an MCom from Mumbai University.... more
Nitiksha Question by Nitiksha on Feb 14, 2023Hindi
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What is the risk of investing in Mutual Funds?

Ans: Hi Nitishka , Risk Can be defined as your response to tolerance level. So its subjective and what's risky for me many not be risky for you. So in Mutual Funds specially wherever you will see equity as a component, you will see that much part of the portfolio as RED or GREEN depending on equity market performance. But more te equity in the portfolio more is the possibility of good gains and vice versa. So All in all i can say when you are driving your car on the road you drive it with safety and not with the intention of meeting with an accident. So in mutual funds too risk is there in the form of equity to create possibility of better returns and fund house takes care as to not spoil the party by choosing wrong equity as they have their own set of rules to assess the stock selection.
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  |6903 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 08, 2024

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How do Mutual Funds help manage risk
Ans: Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of securities such as stocks, bonds, or other assets. Here's how mutual funds help manage risk:
1. Diversification: Mutual funds invest in a diversified portfolio of securities across different asset classes, sectors, industries, and geographic regions. Diversification helps spread risk and reduces the impact of adverse events affecting a single security or sector on the overall portfolio.
2. Professional Management: Mutual funds are managed by experienced fund managers who conduct thorough research, analysis, and investment selection based on market conditions, economic outlook, and investment objectives. Fund managers make informed decisions to optimize returns while managing risks effectively.
3. Risk Assessment and Management: Fund managers assess various types of risks such as market risk, credit risk, liquidity risk, and interest rate risk associated with the securities in the portfolio. They employ risk management techniques such as asset allocation, security selection, and hedging strategies to mitigate risks and protect investors' capital.
4. Asset Allocation: Mutual funds allocate investments across different asset classes such as equities, fixed income securities, and cash equivalents based on the fund's investment objective and risk profile. Asset allocation helps balance risk and return potential, depending on investors' goals, time horizon, and risk tolerance.
5. Regulatory Oversight: Mutual funds are regulated by regulatory authorities such as the Securities and Exchange Board of India (SEBI) in India. Regulatory oversight ensures that mutual funds adhere to regulatory guidelines, disclose relevant information to investors, and operate in a transparent and accountable manner, enhancing investor protection and confidence.
6. Transparency and Liquidity: Mutual funds provide transparency regarding their portfolio holdings, investment strategy, and performance through regular disclosures and reports. Additionally, mutual funds offer liquidity, allowing investors to buy or sell fund units at prevailing net asset values (NAVs) based on the fund's liquidity terms and redemption process.
By offering diversification, professional management, risk assessment, regulatory oversight, and transparency, mutual funds help investors manage risk effectively while seeking to achieve their financial goals over the long term.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner
www.holisticinvestment.in

..Read more

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Milind

Milind Vadjikar  |556 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 02, 2024

Asked by Anonymous - Nov 01, 2024Hindi
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Hi I am 43 years old working in corporate sector in Bangalore for last 20 years. I got impacted by job loss due to the economic scenario and I am finding it difficult to get a job now for almost last 1 year. I am living off my savings. My investments are 1.5 Cr in FD, 2.75 Cr direct investment in equity, 80 Lakh in MF, 35 Lakh in PF, 1 Cr in NPS/Pension fund and 50 Lakhs in Gold. I live in the house I own and I have no loan. I also own a piece of Land worth 60 lakhs. I dont have any debts now. I dont have term life insurance, I have health insurance cover of 2 CR for family. My son is in 10th standard and wants to study abroad which will be a major expense in future. My monthly expenditure including school fees is 1.75 lakhs. Please advise me on how to manage the assets and how to move around the investments as getting a job seems to be more difficult.
Ans: Hello;

Following is the sum of investments you currently hold:

1. FDs: 1.5 Cr
2. Direct stocks: 2.75 Cr
3. MF corpus: 0.8 Cr
4. Land property: 0.6 Cr
5. PF corpus: 0.35 Cr
6. NPS corpus: 0.2 Cr
Grand TOTAL: 6.20 Cr

You should apply for premature withdrawal of NPS. Since this being premature withdrawal your corpus of 1 Cr will get divided into two components 0.8 Cr worth annuity you will have to buy while rest 0.2 Cr comes to you which is indicated above.

The gold asset worth 50 L is purposely not considered here. It may be used as a emergency safe reserve.

You may invest 6.2 Cr corpus in ICICI Pru equity savings fund (low to moderate risk) and do an SWP at 3% which may yield you a monthly income of ~1.4 L (post tax).

The 0.8 Cr of NPS used to buy annuity will yield you a monthly income of around 40 K (6% annuity rate considered), therefore your total monthly income will be 1.4+0.4=1.8 L.

The average returns of ICICI Pru equity savings fund are 8-9% but it is relatively less risky and this is more important.

To fund overseas education of your son, you may have to partially deplete the corpus apart from emergency gold reserves.

Hence it makes sound practical sense to have term life cover of ~ 2 Cr with riders for critical care and accident benefit for 15-20 years, apart from the health care cover which you have already.

This will ensure son's education and income for regular household expenses remain more or less unaffected in the unfortunate situation of your demise.

Also please keep searching for assignments, if not possible full time, maybe part time or on consultation basis.

This will keep you focused and busy.

Feel free to revert.

Happy Investing;

...Read more

Milind

Milind Vadjikar  |556 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 02, 2024

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Milind Vadjikar  |556 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 02, 2024

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I have taken parents health insurance in office coverage is 1 lack base and top up is 3lacks and premium is 38.5k. Since im paying more for less coverage planning to take outside. Taken care supreme with rider for mother which doesn't have waiting period. Father has gone through heart surgery no insurnace is willing to give the insurnace except care heart with the waiting period 2 years and co pay 20% and consumables will not be covered and heart related will not be covered. For both mother and father i need to pay 5k per month for care insurnace. Its like a burden paying office insurnace 38.5k and outside 60k . What should i do, I'm really confused to take outside health insurance or not. Cannot stop office insurnace since it does take have waiting period for parents. Please help me
Ans: Hello;

What is the current age of your mother and father?

Based on your reply I may be able to guide you suitably.

Best wishes;

...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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