#Ace2021 finances. ASK ME ANYTHING!

Wish you all a very Happy, Healthy and Prosperous New Year!

2020 has been a financially turbulent year for nearly everyone. And while the stock market has recovered after a rollercoaster ride earlier in the year, there’s still plenty of uncertainty about the market, the pandemic and the economy going into 2021.

In such times of uncertainty, acing your finances could be slightly stressful but I’m here to help you. Ask me anything about finances from saving to investing to earning to building wealth and I’ll tell you what to do so you can strengthen your financial future.

So ask away!

PS: I will try to answer as many questions as possible (on first come first serve basis) between 1-2 PM on Friday, 8th Jan, 2021.

2 Likes

Hi @Swapnil_Bhaskar.

I primarily invest using Niyo Money.

  1. What’s your opinion on gold investments? Is it a good idea to allocate a certain percentage of investments to gold, say via SGB or ETFs?

  2. On a similar line, how much allocation should I have towards international index funds like S&P 500?

1 Like

Hi,

  • Is it time to take some profits off the table in equity funds? Does the answer vary for funds which might be showing you 50% + returns vs Funds which are showing a more modest 15% to 30% returns.

  • Also if someone has capital to deploy into equity funds, would a debt fund with STP into equity be the best way to go?

What is the best way to maintain separate buckets for long term (primarily for after retirement) vs short term investments.

Hi,
I have started investment using Niyo Money and I am a beginner.

*Do I have to always keep on eye on the market fluctations for my SIP goals and investments.
*How frequent I have to check its performance ?
Thank you.

Hello Swapnil,

My investment in Motilal oswal Nifty 500 has a CAGR of around 71%. Is it a good idea to redeem it now? Or should I just wait for rebalancing? Or should I do something else?

Hello Sir,
I’m just Student studying in Russia, I Always use Niyo card here in Russia.
I Never done investment in any type of Investment Companies or Application. But I heard many times about Niyo Money and Now I really want to invest here with very low amount. Can you please Guide me how I can learn Market principles to invest here in Niyo Money, so I can invest hopefully my precious money. But I will be starting with very less money, And I really hope they get more in less amount of time.
Sir, Please guide me How I can get into field of investment…
Thanks

Hi
Should one still invest in equity/ mutual funds in spite of the markets being at all time high?

Hello Swapnil,

Are there any tax saving debt funds? If yes, which are the good ones to invest in?

Positional trading vs Long term Investing. What do you suggest should be the way to go for many new investors in the next 1-2 years. Considering the volatility in the market there is huge gains to be made in short term as well.

Hi Swapnil,

Would you recommend having international funds in the portfolio? If yes, which ones do you suggest?

1 Like

Hi Barry,

Thanks for investing through Niyo Money :slight_smile:

  1. Ideally, in the long term, gold gives investment returns very similar to inflation in the economy. In the short term, during economic crisis it can give some extraordinary returns as it is considered as safe investment during such crisis.

If you have an end goal like kids marriage, jewellery, estate etc. where gold is going to be an essential part of it then invest and hold it as per that requirement until the end of goal. Else, a 2 % allocation is fine - please note that this will not make you rich but will not let you bankrupt as well in a very low probability of world going upside down!

I find SGB better for long term holding but it comes with a lock-in period.

  1. Investment in international index is primarily for diversification of portfolio. This means there are times when our home country is not growing but the rest of the world is growing and the other times, the other way around is also true. So, to make the portfolio diversify and take benefit of average growth across the world, one can invest in International stocks between 15-25% as part of your equity investments.

Please note that all such equity investments carry market risk where you can lose your principal amount.

#Ace2021

Hi Sachin,

Thanks for asking :slight_smile:

The way I will design the buckets (aka goals) is as follows:

  1. Emergency Fund: use the products like FD or liquid mutual funds.

  2. Tax Saving: PPF, ELSS and NPS can be used to meet the eligible investment requirement under section 80C.

  3. Retirement: Combination of equity and debt mutual funds. A rule of thumb is to have 40% Equity and 60% Debt for low risk profile investors, 60:40 for Moderate and 80-100% equity allocation for long term investors.

  4. Any other goal like Vacation, Kids, etc. comes after you have invested for the above goals.

Niyo Money has goal based investing approach where you can create multiple goals (or buckets) and start investing through SIP or lumpsum. Feel free to use that.

In terms of priority, start with Emergency Fund (do lumpsum if possible) then Tax Saving and then Retirement.

#Ace2021

Hi

Thanks for using Niyo Money :slight_smile:

  1. There is no need to keep an eye on the market because it will fluctuate anyways and we can’t do anything. There is no actionable - because it is very difficult to time the market. We might thing to sell when market is going up and buy when it is going down but it is very difficult to implement when we have a full time job to earn income.

The best thing you have already done is to automate your investment process through SIP to average out buying price of your investments for the long term. Rest I would rather focus on my job to increase income over the time and let the SIPs do wonders in the long term.

  1. If you are using Niyo Money’s recommendation then we monitor them and let you know when to change them over email etc. typically, once in a year. Else, you need to define in your mutual fund selection strategy when to check their performance. In my opinion, once a year is enough because we need to give at least that much time to the fund manager to either perform or perish.

#Ace2021

1 Like

Hi

Thanks for asking :slight_smile:

In the short term, you can see very high or very low returns from the market and it tends to average out in the long term. In my opinion, staying in the market for the long term pays when the conviction is there that the economy will grow. The investments will grow further.

If you are thinking to redeem to time the market, like to reinvest when it comes down then it becomes difficult. Imagine, you withdraw and market keeps going up then you will feel you shouldn’t have withdrawn. Then, either you will wait out (earning sub-optimal returns) or reinvest at higher levels (missing the gains).

In my opinion, one should redeem only when they actually need money. Else continue SIPs for the long term and do periodic rebalancing.

#Ace2021

Thanks. I will keep investing with you guys :slight_smile: . Have a nice day.

1 Like

Hi Apurva,

Thanks for asking - I just answered a similar question.

Investment in international index is primarily for diversification of portfolio. This means there are times when our home country is not growing but the rest of the world is growing and the other times, the other way around is also true. So, to make the portfolio diversify and take benefit of average growth across the world, one can invest in International stocks between 15-25% as part of your equity investments.

There are a few international funds which we have access to like Edelweiss Greater China Fund, Motilal Nasdaq and S&P 500 or ICICI US Bluechip Fund etc. I personally invest in Motilal S&P 500 only.

Please note that all such equity investments carry market risk where you can lose your principal amount.

#Ace2021

Hi Atharva,

Thanks for asking and appreciate your interest in starting investment early in your career :slight_smile:

To get started, you can simply set-up an SIP (recurring investment) of convenient amount in any choice of your mutual funds or Niyo Money’s recommended funds.

This will give you some market experience until you start earning and scale up your investments for your financial goals.

Please note that there will be market risk and your principal amount may reduce or go into losses. So, invest the money which you don’t need before at least 5 years.

#Ace2021

Hi Gaurav,

Thanks for asking :slight_smile:

Each one has its own style of investing. One needs to identify the comfort zone. Even for the new investors, there will be some who can monitor the market on a periodic basis and take decisions based on trends - they will identify themselves with position trading better. However, there are many who are busy with their day to day work and might not look the market that often and so prefer long term investing.

Both strategies have their downside as well. Positional trading requires a lot of efforts and trading behaviour management whereas long term (set and forget) may miss out on short term quick money.

So, in my opinion both strategies have returns to offer but it’s the investor who needs to see which one she is comfortable with and can implement the strategy consistently.

Personally, I don’t have time to do trading and so prefer long term investing through SIPs (have been consistently doing it for the last 14 years now).

#Ace2021