The Mutual Funds Investment Thread

[TheSloth]

The best part of long term investment begins after 10 years when compounding becomes so aggressive that your entire invested amount doubes in 2/3 years. I won't withdraw after 5 years. It is like planting seed of a mango tree then cutting it half way just before it starts giving real good mangos

Here:
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5 years.

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10 years

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3 extra years from 10th year! (13 years)

This is one of the greatest aspect of compound interest which folks don't realize

The big numbers are the result of the the 18% expected return rate, which is too high no?

 

[Nerevarine]

What if we keep the entire investment for long term lets say 5 years and after 5 years withdraw entire amount and invest in another MF

Read the example I gave, its for 3 years. With tax harvesting and without tax harvesting.

*www.youtube.com/watch?v=k206qA7L17k&t=52s

this video explains in depth. Its slighty dated because now exemption is upto 1.25 lakh and LTCG tax is 12.5 % but still concept remains same.

 

[rockfella]

The big numbers are the result of the the 18% expected return rate, which is too high no?

No, after 10 years compounding becomes very aggressive. Take 15% Roi and do the calculation.

 

[TheSloth]

^I am not investing in any fund which gives 15% ROI, I picked only index funds which will probably give 12% if we are lucky. And after tax, it will be even lesser.
Or you mean to say after 10 years with large investment, the ROI increases to 15%-18%, even for index funds?

 

[Vyom]

BTW this is a very good product idea, if groww or zerodha implement "auto-harvest" in their apps.

This feature is already there in Kuvera platform.
I used this feature in past 2 financial years. They make it easy to identify which MF to sell and how much in order to maximize tax harvesting.
And also let me place the buy order of same amount in same MF (or in another, if I choose). Very convenient.

 

[rockfella]

^I am not investing in any fund which gives 15% ROI, I picked only index funds which will probably give 12% if we are lucky. And after tax, it will be even lesser.
Or you mean to say after 10 years with large investment, the ROI increases to 15%-18%, even for index funds?

Your username says it all. Go for it

 

[TheSloth]

Read the example I gave, its for 3 years. With tax harvesting and without tax harvesting.

**www.youtube.com/watch?v=k206qA7L17k&t=52s

this video explains in depth. Its slighty dated because now exemption is upto 1.25 lakh and LTCG tax is 12.5 % but still concept remains same.

I still didn't understand how does it work with SIP. say I invest in March and then withdraw upto 1.25L in April? How does it work with exit load? Its not 1 year since I purchased the units, i need to pay exit load if i try to redeem all the gains, which includes units bought in March. Am I correct?

 

[omega44-xt]

I still didn't understand how does it work with SIP. say I invest in March and then withdraw upto 1.25L in April? How does it work with exit load? Its not 1 year since I purchased the units, i need to pay exit load if i try to redeem all the gains, which includes units bought in March. Am I correct?

Read above messages again for past 2 pages.

LTCG is only applicable if you invested for more than 1 year. If your MF has no exit load for 1+ year of investing, all good, else exit load will definitely be applicable & tax harvesting will help to a slightly lesser degree.

 

[Nerevarine]

It helps to pick mutual funds that have no exit load after 1 year of investing but dont overdo it. Your aim is wealth generation, not tax saving!. Sometimes mutual funds with exit load are better than mutual funds without.

 

[TheSloth]

Anyone here investing in Debt Mutual Fund?
As of now I am putting all the money I invest to equity, but that doesn't seem safe at all.
I wanted to know how do you select it, same like Equity MF by seeing long term performance and XIRR ?

 

[shreeux]

Anyone here investing in Debt Mutual Fund?
As of now I am putting all the money I invest to equity, but that doesn't seem safe at all.
I wanted to know how do you select it, same like Equity MF by seeing long term performance and XIRR ?

Debt..will perform bearish market

Invest equally....Large,Mid,Small,Flexi,Elss,Debt

 

[Nerevarine]

Anyone here investing in Debt Mutual Fund?
As of now I am putting all the money I invest to equity, but that doesn't seem safe at all.
I wanted to know how do you select it, same like Equity MF by seeing long term performance and XIRR ?

Investing in debt mutual fund is the same thing as investing in FD.

• low risk
• the returns will be "interest" and not "capital gains", so you will be taxed based on slab rate.

Usually debt mf has interest rate like 6-6.5 percent. I personally dont like this, since 30% will be chomped off by the govt. If you want "safe" investment, invest in FD in small finance banks.

 

[Nerevarine]

This answers an important question, how to do tax harvesting with SIPs.