Sir, I want to invest Rs.25000 per month, if i invest for 3 years, i would like to know how much corpus i can build and what are name of the mutual fund i should go ahead. Also suggest 2 or 3 tax saver fund for Rs.12500.

Ans: Hi Mohanraj. With monthly sip amount of Rs. 25000, you may achieve a corpus of Rs. 10-12Lakh in 3 years approx with CAGR of 12-14%. In regards with your requirement, you may consider the below schemes for your portfolio.

• Nippon India Large Cap Fund
• ICICI Pru Large & Mid cap Fund
• Quant Tax Plan Fund
• Mirae Asset Tax Saver Fund

 

Ans: To achieve a corpus of 1 crore in 10 years, you'll need a disciplined monthly SIP investment. Assuming an average annual return of around 10%, you might need to invest approximately Rs. 50,000 to Rs. 55,000 per month in mutual funds.

For mutual fund selection:

Large-cap Funds: Offer stability and consistent returns.
Mid-cap Funds: Higher growth potential but with increased risk.
Diversified Equity Funds: Provide a mix of large and mid-cap stocks for balanced growth.
Balanced Funds: Combine equity and debt for stable returns with moderate risk.
Consider consulting a financial advisor to help select the right mutual funds based on your risk tolerance, investment horizon, and financial goals.

Ans: It's great that you're planning for your retirement at 38. Let's explore your investment options to reach your goal of a 2 crore corpus:

• Start with SIPs: Since you're looking to invest 6000 per month, Systematic Investment Plans (SIPs) in mutual funds are a smart choice. SIPs offer the benefit of rupee cost averaging and can help you build wealth over time.

• Asset Allocation: Given your age and long-term investment horizon, consider a diversified portfolio comprising equity and debt funds. Equity funds offer growth potential, while debt funds provide stability.

• Equity Mutual Funds: Allocate a significant portion of your SIPs to equity mutual funds. These funds invest in stocks and have the potential to generate higher returns over the long term. Look for funds that have a track record of consistent performance and align with your risk tolerance.

• Debt Mutual Funds: To balance risk, consider allocating a portion of your SIPs to debt mutual funds. These funds invest in fixed-income securities like bonds and offer relatively stable returns. They can provide a cushion during market downturns.

• Review and Adjust: Regularly review your investment portfolio and make adjustments as needed. As you approach retirement, consider gradually shifting your allocation from equity to debt to reduce volatility and preserve capital.

• Consider Tax-saving Funds: If you haven't already, explore Equity Linked Savings Schemes (ELSS), also known as tax-saving funds. These funds offer tax benefits under Section 80C of the Income Tax Act while providing exposure to equity markets.

• Consult a Certified Financial Planner: Seeking advice from a Certified Financial Planner can provide valuable insights into structuring your investment portfolio and achieving your retirement goals. They can assess your risk profile, investment horizon, and financial objectives to tailor a plan that suits your needs.

• Stay Disciplined: Consistency is key to long-term investing success. Stick to your SIPs even during market fluctuations and avoid making impulsive decisions based on short-term market movements.

• Monitor Progress: Keep track of your investment performance and periodically reassess your progress towards your retirement goal. Adjust your strategy as necessary to stay on track and maximize returns.

By following these steps and staying committed to your investment plan, you can work towards achieving your retirement goal of a 2 crore corpus. Remember, investing is a journey, and patience and discipline are essential for success.

Ans: You aim to accumulate a corpus of Rs. 3 crore in 5 years.
You can invest Rs. 50,000 per month.

Assessing Your Investment Strategy
Monthly Investment Capacity
You can invest Rs. 50,000 per month.
This is a substantial amount, indicating good financial discipline.

Suitable Mutual Fund Categories
Equity Mutual Funds

Large-Cap Funds:
Invest in well-established companies.
Provide stability and moderate growth.

Mid-Cap Funds:
Invest in medium-sized companies.
Offer higher growth potential with moderate risk.

Multi-Cap Funds:
Diversify across large, mid, and small-cap companies.
Balance risk and return.

Suggested Allocation for Mutual Funds
Monthly Investment Allocation
Large-Cap Funds: 40%
Allocate Rs. 20,000 per month.
Focus on stability and steady growth.
Mid-Cap Funds: 30%
Allocate Rs. 15,000 per month.
Target higher growth potential.
Multi-Cap Funds: 30%
Allocate Rs. 15,000 per month.
Balance risk and returns.

Disadvantages of Index Funds and Direct Funds
Index Funds
Limited Returns:
Follow market index.
May miss high-growth opportunities.
Less Flexibility:
Cannot adapt to market changes quickly.

Passive management limits adjustments.
Direct Funds
Lack of Guidance:
Require individual research.
Lack professional advice.
Higher Risk:
May not align with risk tolerance.
Involves more personal decision-making.

Benefits of Regular Funds through MFD with CFP
Professional Guidance:
Access to Certified Financial Planner.
Align investments with financial goals.
Active Management:
Better market response.
Potentially higher returns.
Regular Monitoring:
Ongoing review and adjustments.
Ensure optimal performance.

Final Insights
Invest Regularly: Consistency is key.
Monitor Performance: Review and adjust periodically.
Stay Disciplined: Stick to your investment plan.
Investing in the suggested categories with professional guidance will help achieve your financial goal.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in