Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Dev

Dev Ashish  |48 Answers  |Ask -

MF Expert, Financial Planner - Answered on Aug 24, 2023

Dev Ashish is a fee-only SEBI-registered investment advisor with over 15 years of active experience in the stock market. In 2011, he founded StableInvestor, a platform for personal finance and financial planning.
He provides professional fee-only investment advisory services to small and high networth individuals in order to help them achieve their financial goals.
Ashish's views are regularly published in national business publications. He has an MBA degree from NMIMS, Mumbai and also holds an engineering degree.... more
Rajiv Question by Rajiv on Aug 09, 2023Hindi
Listen
Money

In which MF i should start SIP of 10000 for next 10 years span time, my target amount to be accumulated is 1 Cr

Ans: To reach Rs 1 Cr in 10 years, you need to invest Rs 42-48,000 per month at 10-12% average returns. If you are able to increase your monthly investments by at least 7% each year, then this requirement (starting) comes down to Rs 32-36,000 per month.

While it is possible to generate more than 12% returns in equities, it is not easy to do that and most people will be unable to achieve it consistently. So better to invest with reasonable expectations and also try to increase your investment amount to a higher amount if possible.

Note (Disclaimer) - As a SEBI RIA, I cannot comment on specific schemes/funds that are provided or asked for in the questions in the platform. And the views expressed above should not be considered professional investment advice or advertisement or otherwise. No specific product/service recommendations have been made and the answers here are for general educational purposes only. The readers are requested to take into consideration all the risk factors including their financial condition, suitability to risk-return profile and the like and take professional investment advice before investing.
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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |5260 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 12, 2024

Asked by Anonymous - Apr 12, 2024Hindi
Listen
Ramalingam

Ramalingam Kalirajan  |5260 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 17, 2024

Listen
Money
I want to start SIP for 3k and what time to reach 1 crore and which fund is best to start. Your advice much appreciated.
Ans: Investing in a Systematic Investment Plan (SIP) is a wise decision for long-term wealth creation. A disciplined approach and the right investment choices can help you reach your financial goals. Here’s a detailed guide to help you start a SIP and eventually accumulate ?1 crore.

Understanding SIP and Its Benefits
Regular and Disciplined Investment
A SIP allows you to invest a fixed amount regularly, ensuring discipline in your investment journey. It helps in building a substantial corpus over time without a significant initial investment.

Rupee Cost Averaging
With SIP, you buy more units when prices are low and fewer when prices are high. This averaging effect helps in reducing the overall cost per unit over time.

Power of Compounding
Regular investments over a long period benefit from compounding. The returns generated on your investments also earn returns, leading to exponential growth of your corpus.

Time Horizon and Expected Returns
Long-Term Perspective
To accumulate ?1 crore with a SIP of ?3,000 per month, you need a long-term perspective. Typically, equity mutual funds, which have historically provided higher returns, are suitable for such goals.

Expected Returns
While returns are not guaranteed, equity mutual funds have historically offered returns in the range of 12-15% per annum. These returns can help in achieving your target over a longer duration.

Choosing the Right Fund
Equity Mutual Funds
Equity mutual funds invest in stocks and have the potential for higher returns. They are suitable for long-term goals and can help in wealth creation.

Actively Managed Funds
Actively managed funds have professional fund managers who select stocks based on research and market analysis. They aim to outperform the market and provide better returns compared to index funds.

Disadvantages of Index Funds
Limited Flexibility
Index funds replicate a market index and lack the flexibility to adapt to market changes. They do not attempt to outperform the market.

Average Returns
Index funds provide returns that match the market index. They do not aim for higher returns through active management.

Benefits of Actively Managed Funds
Professional Management
Actively managed funds are handled by experienced fund managers who make informed investment decisions. This professional management can lead to better performance.

Potential for Higher Returns
These funds aim to outperform the market by selecting high-potential stocks. This can result in higher returns over the long term.

Role of a Certified Financial Planner
Personalized Advice
A Certified Financial Planner (CFP) provides personalized advice based on your financial goals, risk tolerance, and investment horizon. They help in selecting the right funds for your needs.

Regular Monitoring
CFPs monitor your investments regularly and suggest adjustments based on market conditions and changes in your financial situation. This ensures your investments stay on track.

Disadvantages of Direct Funds
Lack of Guidance
Investing in direct funds means you do not get the benefit of professional advice. This can be challenging, especially for new investors.

Time-Consuming
Researching and selecting funds on your own can be time-consuming. A CFP saves you time and helps in making informed decisions.

Conclusion
Starting a SIP of ?3,000 per month in an actively managed equity mutual fund can help you reach ?1 crore over a long period. It is important to have a long-term perspective, understand the benefits of professional management, and avoid the pitfalls of "get rich quick" schemes. With disciplined investing and regular reviews, your financial goals are achievable.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |5260 Answers  |Ask -

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

Listen
Money
Hi sir iam 36 yrs right now.i am planning to start sip of around 10000rs per month.please suggest some funds to invest
Ans: starting a SIP is a great decision. It's good to start early and stay consistent.

At 36, you have ample time to build a strong portfolio.

Importance of SIPs
Systematic Investment Plans (SIPs) are powerful.

They help you invest small amounts regularly and build wealth over time.

SIPs also bring discipline and mitigate market volatility.

Categories of Mutual Funds
Equity Mutual Funds
Equity funds invest in stocks.

They offer high growth potential but come with higher risk.

Ideal for long-term goals due to compounding.

Debt Mutual Funds
Debt funds invest in bonds and fixed-income securities.

They provide stable returns with lower risk.

Suitable for short to medium-term goals.

Hybrid Mutual Funds
Hybrid funds combine equity and debt.

They balance risk and reward.

Good for medium-term goals.

Evaluating Your Risk Appetite
Before choosing funds, assess your risk tolerance.

Higher risk can bring higher rewards but also higher losses.

Choose a mix of funds that match your comfort level.

Recommended Fund Types
Large Cap Funds
Large cap funds invest in large, established companies.

They are less volatile and provide stable returns.

Mid Cap Funds
Mid cap funds invest in medium-sized companies.

They offer higher growth potential with moderate risk.

Small Cap Funds
Small cap funds invest in small, emerging companies.

They are high-risk but can give high returns over the long term.

Multi Cap Funds
Multi cap funds invest across large, mid, and small cap stocks.

They offer diversification and balance risk and reward.

Balanced Advantage Funds
Balanced advantage funds adjust between equity and debt.

They provide stability and growth.

Suitable for moderate risk investors.

Steps to Start Your SIP
Define Your Goals

Identify your financial goals.

Is it retirement, children's education, or a big purchase?

Set Your Budget

You mentioned Rs. 10,000 per month.

Make sure it's affordable and sustainable.

Choose Fund Categories

Based on your risk appetite, select a mix of equity, debt, and hybrid funds.

Start Small and Increase Gradually

Begin with Rs. 10,000 and increase as your income grows.

Monitoring and Rebalancing
Regularly review your investments.

Rebalance your portfolio based on performance and market conditions.

This keeps your investments aligned with your goals.

Tax Implications
Understand the tax implications of your investments.

Equity funds held for over a year have lower tax rates.

Debt funds held for over three years benefit from indexation.

Final Insights
Starting a SIP is a smart move.

Your plan to invest Rs. 10,000 monthly is a great start.

Diversify across large cap, mid cap, small cap, and balanced funds.

Monitor and rebalance regularly to stay on track.

With consistency and smart choices, you’ll achieve your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Latest Questions
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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x