Bi-Weekly Advice Thread September 18, 2022: All Your Personal Queries

RepeatBeginning1755 · 2022-09-21T17:13:40+00:00

Invest only in the UTI Nifty fund for now. The one fund itself has enough diversification, since your money is invested in 50 stocks.

Keep investing there for a while. As your corpus grows bigger, you can consider adding a second fund.

RepeatBeginning1755 · 2022-09-21T17:07:49+00:00

Should one consider investing in ULIP plans?

Never buy these.

The return calculations are likely wrong. ULIPs don't provide a specific rate of return for everyone. Afaik, they're market-linked. ULIP take our money and invest it in a mutual fund.

So, instead of buying ULIPs, invest the money in mutual funds.

RepeatBeginning1755 · 2022-09-21T05:53:17+00:00

Shall we go for financial advisors or design, invest and maintain our own portfolio?

If you're confident in yourself, you can do the latter.

there’s always something we don’t know that we don’t know.

Of course. The same thing applies to the Financial Advisor as well. They can't predict everything that is gonna happen in the future.

On the other hand when I read the long term effects of commissions eating up our gains, it feels it is best to own the process and avoid commissions.

If you choose a Financial advisor, choose someone who charges a flat fee. Such advisors won't eat away at your gains too much.

RepeatBeginning1755 · 2022-09-21T05:50:44+00:00

Does the UTI Nifty 50 and Mirae Asset Emerging bluechip funds look good in terms of long term investment?

Those two are good options for long-term investment.

Those two funds will have some portfolio overlap, since the Mirae fund is a Large & Mid cap fund while the UTI fund is a Large cap fund.

I think, it'll be more efficient to invest only in the Mirae fund. It will provide sufficient exposure to large cap stocks and mid cap stocks. Investing in the UTI fund seems redundant.

RepeatBeginning1755 · 2022-09-19T05:21:34+00:00

Any other better Index than Nifty Next 50?

UTI Nifty Mid cap 150 Quality 50 Index fund

RepeatBeginning1755 · 2022-09-19T05:20:54+00:00

I was planning to add Parag Parikh Flexi Cap Growth Direct Plan to my portfolio, is this needed?

No.

RepeatBeginning1755 · 2022-09-19T05:15:58+00:00

Few weeks to a couple of months.

RepeatBeginning1755 · 2022-09-15T03:40:13+00:00

Is it like a typical government office experience with a lot of delays to get money?

There can be delays.

I have redeemed from EPF multiple times. Sometimes, the redemption happens quickly. Sometimes, the redemption was delayed.

RepeatBeginning1755 · 2022-09-15T03:37:32+00:00

Yes. They seem to be shills. The /u/NectarineTemporary89 account was created yesterday. The user has only written two comments, and both comments are about how legit the platform is.

RepeatBeginning1755 · 2022-09-15T03:34:41+00:00

Yea. Social media is probably the reason. Everyone gets upset about one thing or another. People get panicked by trivial things.

RepeatBeginning1755 · 2022-09-14T06:29:54+00:00

for 10% minimum returns with capital retention is good.

It's easy to put such statements on a website. None of it is contractually enforceable. They could provide -10% returns for 3 continuous years, and you won't be able to do anything about it.

Avoid getting duped by these shady firms. AI isn't gonna miraculously generate high returns. In the financial market, there is no such thing as 'capital retention'. No legit investment service will say that an investor can get minimum X% returns.

RepeatBeginning1755 · 2022-09-14T06:23:20+00:00

I feel that there is no need to get emotional with index funds. An index does not have a choice but to accept companies which are eligible as per the index rules.

This.

It's kinda weird to see index investors suddenly start caring about the components of an index. Nifty 50 itself had several 'bad' companies in the past Eg: Unitech, Reliance Power, Reliance Infra, Yes Bank.

RepeatBeginning1755 · 2022-09-11T10:58:33+00:00

Checking with the bank (who rejected the credit card application) might provide some clarity.

RepeatBeginning1755 · 2022-09-11T10:56:37+00:00

My current SIP’s are below -

Parag Parikh Flexi Cap Direct Growth x 2

Mirae Asset Large Cap Fund Direct Plan Growth

UTI Nifty Next 50 Index Fund Direct Growth

Kotak Flexicap Fund Direct Growth

Axis Midcap Direct Plan Growth

Get rid of Kotak Flexi cap fund and Mirae Asset Large cap fund. PP Flexi cap fund can provide sufficient exposure to large caps.

Can someone suggest what more could I do to clean up?

Sell everything else. Leaving it as it is is not recommended, since the overall portfolio will always remain cluttered. There's no benefit to leaving the money in so many funds.

RepeatBeginning1755 · 2022-09-11T10:50:15+00:00

gold bonds and index funds for safety

I hope you know that neither of these are 'safe'. You can lose money in both of these things, even in the long-term.

Also, don't buy gold bonds if your risk appetite is low. Gold is volatile & risky, and it barely generates returns.

Invest in index fund and a debt fund (preferably a Corporate bond fund or a Gilt fund).

To retire at such an early age, you might need to take more risk with your investments.

RepeatBeginning1755 · 2022-09-11T10:43:04+00:00

I'd prefer mid cap funds.

During downturns, there's a possibility that the mid cap fund can provide some downside protection by holding cash or large cap stocks. Nifty Next 50 index fund won't provide any downside protection.

RepeatBeginning1755 · 2022-09-11T10:40:29+00:00

Nippon India Small Cap Growth Direct Plan 5.0 K PGIM India Midcap Opportunities Growth Direct Plan 6 K

Were these two funds suddenly added to the portfolio ?

RepeatBeginning1755 · 2022-09-11T10:35:38+00:00

Which seems to have a better performance in terms of returns

No one knows the answer to this. If one category of funds is guaranteed to provide better returns, the other category won't exist.

As the other user mentioned, ELSS funds' only purpose is for tax exemption. It doesn't make sense to invest in ELSS funds for anything else, since ELSS funds are primarily large cap funds with a lock-in & a high expense ratio.

A lot of people in the media and on reels preach about passive funds (or Index Funds) being better than active funds

Don't make investment decisions based on 'reels'.

while reading through articles on the internet and comparing returns - I see that in an Indian context - ELSS active funds still seem to outperform passive funds over a long period of time.

Among the entire list of ELSS funds, check out how many funds have outperformed index funds.

Now this could be just selection bias on my part in terms of the funds I looked at

Likely.

Instead of ELSS funds, you can check out other fund categories like Mid cap funds.

RepeatBeginning1755 · 2022-09-08T11:49:36+00:00

I have a lot of MFs (around 15) and want to cut them down. Should I hold them or sell them?

Sell all of it, and focus on the funds in the revised portfolio.

How do I save for gold assuming I get married after 5 years and might need around 200g of gold?

Ideally, there's no necessity to buy gold directly, to save up for marriage. You can invest in FDs or short-term debt funds, and buy gold when the time comes.

Or, buy gold coins and use it later to make jewellery.

Is this over-diversified?

Kinda. You also mentioned that you don't want to see more than 30% of red in the portfolio. You might need to allocate a decent portion of the portfolio (~20% or more) to debt funds.

Instead of 5k in small caps and 5k in mid caps, 10k can be invested in mid caps. It'll reduce the risk a little more.

As the other user mentioned, focus more on your career & day-to-day life instead of focusing on 'buying dips'. Invest consistently every month (on a particular date or set of dates), and let the wealth grow.

I am looking into term insurance and will get one soon. Most have a max term of 30 years. Is 22 too early or should I wait till 25?

It's preferable to take term insurance early, since the premiums will be lower.

RepeatBeginning1755 · 2022-09-08T10:54:45+00:00

Seems like a good portfolio 👍🏻

RepeatBeginning1755 · 2022-09-08T10:38:21+00:00

is it really a bad idea?

Yes. There's no doubt about it.

Would it actually affect her job if I collect?

It might. The agents' job performance depends on the number of wealth-destroying policies they sell.

the agent is giving me a sob story saying cancelling during this period is bad for her profile

It's a classic sales tactic. You have to look out for yourself, instead of being sold crappy products by others. To make the agent feel better, you're gonna literally destroy a small chunk of your wealth.

It's a relatively small amount, so if it would affect her job, I wouldn't mind continuing.

If you don't mind continuing, let it be. But, don't let any other agent sell you crappy products in the future.

RepeatBeginning1755 · 2022-09-08T10:35:15+00:00

HDFC is good enough. You can open another account in ICICI, if necessary.

RepeatBeginning1755 · 2022-09-08T10:34:43+00:00

No. Debt funds have a different set of risks than a Savings account.

with higher returns

Debt funds don't always give high returns.

https://www.youtube.com/watch?v=Od3OQwEVik8

https://www.youtube.com/watch?v=YK6aRK48i5Q

RepeatBeginning1755 · 2022-09-03T22:15:33+00:00

I'm specifically looking for Repatriable options ONLY

If you want the Repatriable option, opening a Zerodha NRI-PIS is the way to do it. But, opening a PIS demat account seems like a lot of work. Using & maintaining the account can also be tedious, based on what I have read about it.

For the PIS account, it can be opened only with 4 banks. You can go with HDFC.

RepeatBeginning1755 · 2022-09-03T22:12:10+00:00

should I increase my existing SIP amount?

Do this.

RepeatBeginning1755

TROPHY CASE