In an hour-long chat on
rediff.com on Thursday,
Rahul Goel, CEO, Personalfn.com, and financial planning expert, answered readers' queries on tax planning, invetsment, mutual funds, etc. Here is the transcript:
NRS asked, Could you please advice on which mutual funds in india are offering the best returns?
Rahul Goel answers, hi. the most common mistake investors make is to inevst in funds wich have offered the highest return in recent times. however, your fund selection process should be a lot more indepth. to give you an example, the top performer over a year maybe say a technolocgy fund. does this mean that you should put money in it? in our view, no. rather it would depend on whether or not the fund suits your needs and profile. having said that, funds like hdfc equity or franklin flexicap are diversified equity funds which will suit the investor who is looking on taking risk to earn a higher return.
tonu asked, Hi Want to know which SIP is the best. I have invested in SBI infrastructure fund how is it? what you have say about the UTI lifestyle mutual fund?
Rahul Goel answers, regariding uti lifestyle fund, at personalfn, we are recommending to our clients that they avoid the fund. with regards to sbi infr, its again a sector fund. while it may do well in the near term as the hype surrounding the sector persists, over the long term it will go through a cycle, like all sectors. so, if you do not exit in time, then you may not really make the kind of returns you should have. at personalfn, our clients, almost all the times are told to avoid sector funds.
Jayant asked, Dear Sir, I have long term view [12-15 years] and investing 1000/- as SIP for net 3 years in following funds 1) Templton India Equity Income Div Rein 2) Fidelity Equity G 3) Reliance Growth Div Rein 4) Fidelity India Special Situation G 5) Franklin Prima Plus Div Rein kindly comment Jayant Pune
Rahul Goel answers, i think if you have such a long time frame, you should select your funds more carefully. firstly, i think you should simply go in for the growth option as against the dividend option, unless you need this income. secondly, you have funds like templeton equity and fidelity sp situations, which are very good funds, but should not form the core of your long term portfolio. the core should comrise funds like hdfc equity / top 200 and frankin flexicap. i am assuming you can take near term risk and are not looking at speculative investments. in short, you have good funds, but your allocation is not correct. and getting the allocation right is very important in our view.
RTE asked, what are the implications of going in for a 5 year SIP vs extending a 1 year SIP for 5 years ? Does one need to pay entry load when renewing the SIP at the end of previously agreed period ( 1 year)
Rahul Goel answers, there are no significant implications. however, if you do a 5 yr sip do not forget to review the scheme every year. also, sometimes, there are opportunities to do long term opportunities in good schemes at less or nil entry loads. at such times it may help to lock in longer term sips. but make any such investments only if they are in line with your overall asset allocation. do not invest only to save the entry load.
rahul asked, I wanted to invest 3 lakhs for 5 years, pls suggest me some good Mutual funds and pls suggest shall i go for lumsum or SIP
Rahul Goel answers, rahul, hi. i would recommend you go in for a STP - systematic transfer plan. in this case, your money is put into a liquid fund and then transferred to the equity fund of your choice at regular intervals. also, ensure that the STPs are structured in such a way that atleast some money is invested every week. this way you will be able to average out the cost of your investmetn better. regarding the schemes... if you are willing to take on risk, and have a minimum three year investmnt horizon, consider schemes like hdfc equity or franklin flexicap. avoid sector funds and also the NFOs. stick to plain vanilla diversified equity funds.
Vibhor asked, Hi Rahul, i am an associate working for MNCand geting arnd 3.5lacs per annum.... can you suggest me some investment options
Rahul Goel answers, vibhor, hi. ensure that whatever investments you make are in line with your needs. do take term insurance; subsequently, put away as much money as possible in risky assets like equities for the long term. if you are busy with work, for for equity mutual funds. basically, save as much as you can and invest regularly.
NRS asked, what would be your advice on the reliance equity advantage fund?
Rahul Goel answers, reliance equity advantage fund is an NFO which closed recently. our recommendation to our clients at personalfn was to avoid the scheme.
Don asked, Hi I save 20000/month. I plan to buy a flat in pune in a years time. Please suggest me how should i invest my money so that i can have enough money when i am buying a flat.
Rahul Goel answers, don, hi. since your investment horizon is about a year, i recommend you invest in 3 month fixed maturity plans (close ended debt funds) of mutual funds and roll them over as and when maturity happens. do not invest in the stock markets - that would be speculating.
rajicici asked, Sir iam planning to invest an amount of Rs 1000 for a tenure of 3 years through SIP can u suggest which is the best mutual fund that will give me assures returns
Rahul Goel answers, hi. if you are willing to take on risk, then go for the diverified equity funds like hdfc equity, and franklin flexicap. other schemes you can consider are dsp ml equity. then there is the quantum long term equity fund, which does not charge any entry load and has a good performance (Full Disclosure - Quantum Mutual Fund is founded by Ajit Dayal, who has also founded Personalfn). Our view is however completely independent and based on our research.
Prabhu asked, Dear Rahul, I have about Rs 3,00,000 which I would like to invest. I am 44 years old and have a 15-yr-old daughter. I would like to invest for her future. I have no other investments save a couple of insurance policies. I plan to invest for the long term. Could you name a couple of good MFs for me? Will be grateful. Thank you.
Rahul Goel answers, prabhu, hi. i have already named a couple of schemes earlier. before committing monies, pl be sure of the tenure of for which you are investing. if you plan to fund her college education, then you will have to avoid taking on much risk as the tenure of investment will be less than 2 years.
hafiza asked, hi sir, I have an annual salary of 8 lacs pa.could you please suggest me an investment plan. thanks.
Rahul Goel answers, hafiza, hi. its very difficult for me to give you a plan with such limited information. sorry!
monasheth asked, Sir,I have invested as premium in LIC,Aviva Life Insurance,ICICI Prudential Life Insurance and Bajaj Allianz as well as HDFC standard Life Insurance,What should i do for profitability.. for above insurance
Rahul Goel answers, mona, hi. it seems that you are one of the many people who look at insurance as a mode of investment. we differ on this. insurance should be taken for purpose of protection. of course you can invest in ulips, but that should happen once you have made what we call the pure investments - stocks, bonds, real estate etc. in any case, if you wish to make a meaningful return in a ulip, you should be invested for atleast 12 years in our view.
divya asked, Hi Rahul is it better to keep money in Fds or stocks
Rahul Goel answers, divya, hi. fds and stocks are completely different asset classes. one carries assured income and very low risk; the other carries high degree of uncertainty. if you are considering one over the other, it is very likely that you are not sure why you want to invest the money in the first place!
tony asked, what do u suggest is it wise to invest with Uti india lifestyle fund ?
Rahul Goel answers, tony, hi. like i mentioned earlier, we have recommneded to our clients that they avoid this fund.
bhasker asked, dear sir i wolud like to invest short term plan like 3 to 5 year and i have some fund which is in my saving account. please sugges me what should i do write now.
Rahul Goel answers, bhasker, hi. i think you should clearly define why you wish to invest the money... the objective,. once you are clear, then your financial planner should help you build a portoflio best suited to your needs.
Manas asked, Good Afternoon Mr.Rahul. Iam 24 now and am planning to start making investment. I will be doing it for the 1st time......where and how do i make a start
Rahul Goel answers, manas, hi. great that you are starting early! before investing a single rupee do one of the two. one, become an expert on where you should invest the money. or, get yourself an honest financial planner who will guide you. depending on how busy you are you will need to take this call. if you get this right, you will do very well!
Bala asked, Rahul, I have invested in some mutual funds (SIP) on a long term planning. Will i attract any capital gain tax if i redeem some points after one year.
Rahul Goel answers, bala, hi. if you have inevsted in equity funds, and redeem after the "installment" after 12
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