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Chat Transcript

Amit Trivedi

Author & Founder , Karmayog Knowledge

Equity investments simplified


Questions Answered


guest: Retired person, can save Rs 10000/- every month. Is it advisable to start SIP in MOST 35 and ABSL EQUITY fund (Rs 5000) in each. Just for savings. Please advise.

Amit Trivedi: If your regular expenses are taken care of, and you have long investment horizon, only then you may consider an SIP in equity funds. Also, please understand that in equity mutual funds, you are not saving (which is an effort to avoid various investment risks), but investing (which is an effort to potentially earn high returns by taking calculated investment risks).

guest: Hi Team, Goal 1 - Child education after 15 years. Present cost 25 lakh. Goal 2 - Retirement after 30 year. Present cost 50k/month. Goal 3 - House loan repayment 5 yrs. Present cost 23 Lakh. IDFC tax advantage RP-G 1500 Principal tax saver RP-G 1500 Reliance small cap RP-G 1000 Mirae Asset emerging Bluechip fund G DIRECT 7500 HDFC balanced fund GR RP-G 5000 Invesco India Growth Fund - Gr 5000 Motilal Oswal MOSt Focused Multicap 35 Fund - Growth - RP 7500 please suggest if funds looks good or need to reshuffle. Regards, manoj 9970290552

Amit Trivedi: While for your goals related to child`s education and retirement, since both are quite distant in future, you may consider equity funds, but these may not be suitable for a goal that is due in 5 years. Secondly, I am not sure if I understood your goal of repayment of housing loan - are you considering a lump sum payment after that period? Will there not be any EMIs? Or are you talking about a home loan that would get over through EMIs in 5 years? Answers to these questions are critical, as the decisions may be different in both situations. Also, I am assuming that you have taken care of your near term cash flow (short to medium term expenses and financial goals) requirements.

guest: i want to put 2 lack in MF for 20 to 25 yrs. which will be good MF for me. suggest.

Amit Trivedi: For a 20 to 25 year period, you may consider a diversified multi-cap fund. However, if you are a new investor, you may stick to a large-cap fund or an index fund.

guest: hi sir, I am 22 years old and i have invested in mostly in lump sum so can you suggest me what changes should i make so that i can get better return in next 7-8 years. And as i am a student do i have to pay tax ? please suggest me should i invest in small cap funds. Aditya Birla SL Cash Plus-G Rs 50000(lumpsum) HDFC Balanced Fund-Rs 15000(lump sum) HDFC Mid-Cap Opportunities Fund-Rs1500 p.m SIP for 3 years ICICI Prudential Balanced Advantage Fund-Rs 20000 (lump sum) Kotak Select Focus Fund Regular Plan-Rs 50000(lump sum) Reliance Top 200 Fund - Retail Plan-Rs 20000(lump sum) SBI Bluechip Fund-50000 (lump sum)

Amit Trivedi: What are you investing for? A purpose? You have mentioned "... so that I can get better return in next 7-8 years" - what does this sentence mean? "Better" than what? Do you have some financial goal after that period? If yes, how much do you think the amount could be? These are important questions to consider. Seeking "better" returns is a vague idea and hence you are not likely to get a good / correct answer. Secondly, your status as a student has nothing to do with your tax status. Whether you have to pay tax or not depends on your income for the year. Having said that, investment in mutual funds allow you to continue holding on your investments for long periods without worrying about taxes, provided you opt for "growth" option. The tax would be payable only when you sell your investments.

guest: From last 2.5 years by seeing past returns I have added SIP\`s in different MF\`s one by one (due to more excitement :)). All are direct funds. Even though currently most of funds are doing well, Now I feel there is a duplication of similar funds in my portfolio. I am 37 and willing to take risk in next 5-10 years. I am investing in below MF\`s. Please suggest whether I can drop (Club with other) some of MF\`s SIP or can add any MF. I am investing in Canara Robeco Emerging Equities, Dsp Blackrock Small Cap, Franklin India Smaller Companies, Hdfc Mid Cap Opportunities, L&T Emerging Businesses, L&T India Value, L&T Infrastructure, Principal Emerging Bluechip, Reliance Small Cap, Tata India Consumer, Mirae Asset Emerging Bluechip.

Amit Trivedi: Recently, SEBI issued a circular regularising the categorization of mutual fund schemes. This is a fantastic move by the regulator, which ensures that investors and their advisors can easily spot overlap across schemes. Look at the category in which the particular scheme falls and then check how many schemes do you hold within the same category. If you see duplication, take action.

guest: Age-30, Male, Unmarried Monthly income 80,000, Monthly Expense-40,000 Assets- None (lives in a rented house) Savings- 5 lakh in savings account. Insurance- Health Insurance by employer 3 lakhs Risk Profile- Risk Capacity: Moderate Risk Tolerance: Moderate Investment Goals- Retirement Planning:- Retirement Age-60 (Considering Inflation) Wealth Building Need 1 crore in 10 years for House Just started investing in MF\`s from April 2018. Axis Long Term equity Direct(G)- Lumpsum - 1 Lakh ( Jan 2018 ) Monthly SIP- 5000 (April 2018 Onwards) DSP Black Rock Tax Saver Fund Direct(G) - Monthly SIP- 5000 (April 2018 Onwards) SBI Blue Chip Regular(G)- Monthly SIP- 3000 (April 2018 Onwards) L&T India Value Fund Regular(G) - Monthly SIP- 3000 (April 2018 Onwards) Aditya Birla Sun life Dynamic Bond Fund Regular(G) - Monthly SIP- 2000 (April 2018 Onwards) Axis Liquid Fund(G)- Monthly SIP- 2000 (April 2018 Onwards) Earlier for tax savings invested in ppf & kick started elss from 2017. Need your expert help to analyze the portfolio for meeting desired goals, please suggest what can be done for the same. I have 2 Lakhs wish to invest in an alternate of FD I also have a question regarding Liquid funds as i have already stated SIP in Axis Liquid Fund my question - Is it good to invest in those? if yes what will be the best mode to invest in liquid funds SIP or Lumpsum also for how long to keep invested in them to gain good returns over FD\`s and optimize taxes and are the safe. Also Suggest to balance out tax implications on the investments.

Amit Trivedi: At the outset, let me congratulate you for giving such a detailed thought to your personal finances. Before we go on to the portfolio, I would like to suggest that you may kindly meet a health insurance advisor to check whether the employer provided health insurance is adequate. Why are you putting money in a liquid fund? Is it for building a contingency fund? If that is the purpose, please set a target for accumulating money in that fund, which could typically be between 3 to 6 months of household expenses. Once you achieve that amount, you may not continue putting more money in the liquid fund. So far as your other investments are concerned, you may continue to invest in these schemes (though this should not be considered as my recommendation for those specific schemes), and periodically evaluate the portfolio to see if there are any major changes in the scheme`s objectives or the fund management team. As you have already done, stay in growth option and do not withdraw unless (1) you reach the goal, or (2) you want to rebalance the portfolio, or (3) there is an adverse change in a particular scheme. This would allow you to defer your taxes till the time you do not book capital gains.

guest: Hi, I am investing 10000 per month in following mutul funds from last six months.My target to get 1Cr in next 15 years.I can increase sip amount per year 10%.Please suggest what changes should be done to get the target. Tata Mutual Fund Tata Balanced Fund - Regular (G) (Growth) Kotak Mahindra Mutual Fund  Kotak Select Focus Fund (G) (Growth) Franklin Templeton Mutual Fund Franklin India Smaller Companies Fund (G) (Growth) Canara Robeco Mutual Fund Canara Robeco Emerging Equities (G) (Growth) SBI Mutual Fund  SBI BlueChip Fund (G) (Growth) Mirae Asset Mutual Fund  Mirae Asset Emerging Bluechip Fund (G) (Growth) ICICI Prudential Mutual Fund  ICICI Pru Focused Bluechip Equity Fund (G) (Growth)

Amit Trivedi: Difficult to say what can happen over 15 years. The only thing I can suggest is that you keep investing as per your plan - regular SIP with increasing the amount by 10% every year. However, this still looks tough to achieve as you would need the rate of return to be roughly 16% p.a. (post-tax). You would need to either increase the SIP amount, or reduce your goal value, or delay the goal. There is no other way.

guest: I am 31 years old. My risk profile is moderate. I am currently investing 1500 Rs in Mirae Asset Tax Saver Fund - Reg (G), 1500 Rs in Motilal Oswal Long Term Equity Fund - Reg(G), 2000 Rs in L&T Infrastructure Fund - Direct(G) and 2000 Rs in ABSL Top 100 Fund - Direct(G). Further I want to invest Rs 2000 in absl small & midcap fund Direct(G). Please review my profile and suggest. Thanks!

Amit Trivedi: It seems that you are only discussing a small part of your overall investment portfolio. As you have mentioned, your profile is moderate, but the entire portfolio that you have disclosed consists of equity funds. There is a clear mismatch. A moderate risk investor cannot have 100% investments in equity.

guest: top 3 best mutual funds to invest for 10 years

Amit Trivedi: There is no such thing as "the best funds for the future", as nobody knows the future. Kindly look at your own situation and your requirements and then seek to invest in funds that are appropriate for you.

guest: i am a first time investor aged 50, i want to invest one lac rupees monthly through SIP for next 10 years. please suggest 4 to 5 schemes for investment.

Amit Trivedi: Very difficult question to answer, especially for someone who is investing for the first time at 50 years. I guess, what you mean is that you are looking at mutual funds for the first time and have invested elsewhere. It is this elsewhere that is important for one to know before considering the question.
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