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[Music] hello everyone a very good evening you’re watching the money show on ET Nows rise with India prime time segment I’m Aina kabasi and today we’re going to be talking about uh the move that we’ve been witnessing in the equity Market um plus it’s also of course the beginning of a brand new Financial year and I’m sure many of you may be using this opportunity to sort of give your mutual fund portfolio a relook at as you must do we always Advocate that you must give your mutual fund portfolio an annual
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review even though you need it maybe for your retirement maybe 10 20 30 years down the line it’s always a good idea to annually review your portfolio but if you will review it you will witness red on your screens navs have been whacked out of shape so in such a scenario is rejigging your portfolio the best thing to do should you be selling or redeeming your units when the values are so low I am joined by Harish RTA personal finance expert to talk about this and more and of course viewers I hope and I’m hoping
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uh that all of you are staying safe are staying at home even if you are bored out of your minds well here’s an activity to do log on to CS bring out your mutual fund statement and you can take a look at whether your portfolio needs to be reviewed you can do so on our ask the money show segment we’ll kickstart in just minutes from now so Mr RTA always a pleasure having you with us on the money show you know this is a time when um people are not just seeing their navs being whacked out of shape
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but many of them may also be facing a cash crunch of sorts um we even had the government saying look you know what if you’re really having problems don’t pay your emis for 3 months we’ll allow it plus they’re also saying if it’s really really bad then maybe tap into your retirement piggy bank that’s the Provident fund as well a certain amount can be withdrawn from your retirement piggy bank so Mr RTA in such a scenario when your navs are anywhere down when one does not want to touch their
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retirement kit what should one do if if they need money I mean uh how should one essentially plan their finances in the time of Corona virus well I think uh it is planning that comes in useful when you have unexpected events like the Corona virus and I think uh more than what you should do uh it is important what you should not do so I I let me concentrate on some of the things that you should not uh do and let’s divide them up into uh people whose cash flows are going to be impacted uh those would be you know
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self-employed people who are going to really see cash flows uh impacted even salary I mean we are going to see salary delays we are going to see job losses unfortunately uh so you know that is one then there would be a class of people uh For Whom the cash flow is not going to be impacted so what are the things they ought not to do first I think both classes should never take any step in a panic or as a knee-jerk reaction uh and you know don’t pull out of your existing Equity whether it is direct Equity or mutual fund equity
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schemes just because they are in a loss you know as you rightly said you know it’s going to be aash with red right now but don’t pull out of it simply because it is in a loss don’t stop sips uh in a existing Equity mutual fund uh unless there is a cash flow issue I mean if the cash flows are in a danger or they are already impacted uh then obviously you may have no choice but to stop the sips but otherwise do not stop the sips into Equity mutual fund you can use the emergency fund so
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if you have done planning well you would have a small little emergency fund equal to 3 to 6 months of uh expenditure use that rather than use the moratorium that I think uh we were speaking about in the earlier program uh very clearly I the moratorium comes at a cost so by all means if you are those whose cash flow is impacted uh use the moratorium but if your cash flow is not impacted it’s much better for you to uh you know pay from your cash flows or you know use the emergency fund if you uh have it one
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quick point is never ever use the credit card moratorium it comes at usurious rates uh again very important thing to remember in terms of doing is Insurance before investment so I think all your term insurance premiums health insurance premiums car insurance property insurance make sure that when the debit hits your account there is enough money or that you pay those premiums very very important to keep your insurance premiums up to date and I’m not talking about the insurance come investment
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policies I’m talking of the pure insurance policies one thing that again you can do that if you were in the middle of Shifting uh money systematically monthly from debt funds into Equity Funds then maybe you can I mean that shows that your Surplus on cash but then clearly this could be an opportunity to accelerate that shift instead of say doing it over the next 15 12 15 18 months you could probably do it over the next 12 15 18 uh weeks rather than uh months so my point is do everything based on a considered review
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rather than acting in a knee-jerk fashion H okay understood well you know uh mrta when we had you during our Christmas special as well you had mentioned that one of the resolutions of sorts that everybody should take was keep an emergency fund that would be worth a certain amount um that would be dependent on your monthly expenses and then multiply that monthly expense by six or by eight so if our viewers had listened to you then they would have been kind of okay right now um now Mr room I want to talk to you about the bit
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that I mentioned a lot of our viewers tend to look at their portfolios at the end of a financial year or at the beginning of the financial year they look at their navs they’ve Fallen Etc but you know again you have have to ensure that your mutual fund portfolio aligns with your goals so let’s say something has come up and you need the money say next year which means you have to put certain money in debt funds or whatever rejigging you have to do given how markets are right now given how navs
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as well are right now a retail investor cannot time the market so would you advise them to postpone any sort of mutual fund portfolio review they may they may put they may have scheduled for doing around this time I mean I think you should have a a fixed review date and even taking the use case that you just mentioned about say a goal falling due in a year’s time typically if you have done your planning well that the money that is needed for the goal that is due just one year from now should have started slowly tapering
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into debt you should have slowly systematically shifted it into debt in fact I have a specific uh client uh you know who was who had saved enough money for his son’s uh college education uh in in UK uh it is going to be in August by last November when his admission got confirmed we had already started tapering uh the uh amount and because of that today most of that money is sitting in liquid funds and even the Balan is in very very low Equity hybrid funds because that is how it was designed
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so the point is that if you plan it properly then there is nothing that you need to change coming to the fact of what should be a review I think you should have a fixed review date it can be the beginning of a fiscal it can be your birthday spouse’s birthday anniversary child’s birthday uh but an event like the Corona virus definitely I think that calls for a review I think what happens as a result of that review is something that is uh different because the review will obviously at the time of
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review you are not just going to be looking at your uh how much is fixed income how much is uh Equity Etc you’re also going to look at how stable are your cash flows are you likely to be having those cash flows in the future I think all those factors will be important but if your cash flows are stable and your Equity has fallen because of an event like Corona then maybe it is a uh it is an occasion uh a review a midterm review if you may it may be a occasion for you to up the equity component systematically never
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lumpsum systematically you can up the equity if your cash flows are steady okay understood what about debt uh Mr because that too is an equally important part of an Port portfolio uh now many of our retail investors may not be familiar with the jargons associated with debt but you know there have been several announcements come by from the RBI that could provide some good money-making opportunities over there as well what’s your advice on that front so again I am assuming that for the people who are watching this program
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they are not seasoned investors so money making opportunity and debt uh I would say please uh for a lay investor don’t try to make money of debt funds I think debt funds typically would be advised for goals that are due uh in the next one or two years or for senior citizens who are seeking to get a monthly a regular payout from the debt fund I think that is the constituency to which I’m addressing this answer uh there I think if you have a goal that’s going to be due in a year year and a half two
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years then you’re talking really of liquid funds uh Bank fixed deposits and the like literally I think that should be where you should be investing but if you are say a senior citizen and you have used up things like the senior citizen plan and if you were fortunate enough and if you have before 31st March used up the PM yoga all that is over uh and you still have funds from which you expect monthly return then you could look at funds like the banking and PSU debt funds or say the bhat bond uh which
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is a PSU debt fund bat Bond fof the 2023 one that is one 2023 and 1 2030 I would recommend the 2023 one uh now it is not that these fund values the navs will not go up and down they could go down if interest rates rise but if you want to withdraw from them over 58 or even longer years if you want to systematically withdraw then I think these are a a good thing where the credit risk is very very low the chance that one of the issuers will default is very low because this money is Lent to Banks and to PSU debt funds although I
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mean Banking and PSU debt funds did have 81 kind of bonds as well uh but I think the lessons have been learned there uh so I think those are things that they could uh definitely look at uh and you know but for that constituency alone okay all right you know very quickly I want to sort of move on to some of the viewer queries we have been getting we’ve been getting a plethora of them folks we’ll try our best to answer each one of them Kumar bat wron to are saying I’m a government service servant
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30 years old I’ve got health insurance a 1 CR term insurance monthly NPS contribution as well because of being in a government job a ppf account where he Park some money wherever there’s Elbow Room uh he invests in two elss funds AB tax relief and access long-term SBI Blue Chip HDFC midcap SBI small cap all of them monthly sips uh he’s obviously a long-term investor and he wants to know if he must continue with the same same funds keeping the corona Mayhem in mind should he add or subtract any funds so
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it’s a mix blue chip midcap small caps into elss uh Mr R your advice I think very sorted out investor see he’s a government servant so cash flows are relatively stable okay uh but if you look at his Investments they are very very dead heavy even NPS for government servants is 85% debt unless he I think they were to uh relax it I don’t know whether that has happened and he parking it in ppf the good thing is that he’s making 13,000 rupees uh investment on a monthly basis in these
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two elss one large cap one midcap small cap so well balanced uh and this is will do him well I mean the 13,000 rupees sip if he continues for the next 30 years he’s only 30 years old uh it will give him a pension inflation adjusted of roughly 21,000 rupees per month in today’s money so that’s a fair bit of second pension that he would be getting apart from what he gets from The NPS the word of advice for him is I think for the amount that he is investing the funds are good the three
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funds that he has the two elss that he has are good I would suggest he should consolidate as far as the elss is concerned among the two whichever one he wants he can choose and have only one and instead of the three separate funds he has a large cap midcap and a small cap I would advise him strongly to do a Nifty 500 fund currently I think only motilal oswal is offering a Nifty 500 Index Fund that’s what I would recommend so it becomes very simple one one elss and one uh Nifty 500 fund and that is it and
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that gives him exposure which is very large cap Orient but gives midcap and small cap as well sure correct okay understood all right thanks so much Mr RTA unfortunately we’re out of time on this episode we love to take more queries but thank you for joining in