This is that time of the year when you need to review your investment plans. Do you think it is wise to invest in mutual funds? Are you aware of the investment options they provide?
What are the best mutual funds available in the market? Which funds accrue maximum profits? What are the crieria for evaluating a fund?
Which funds provide the best SIP options? Are SIPs the easy way of making quick bucks? When and how should one buy mutual funds?
In an hour-long chat on
rediff.com on Thursday, personal finance expert
Rahul Goel replied to many such readers' queries. Here is the transcript:
Rahul Goel says, Good afternoon! Welcome to the discussion on financial planning! Let's start!
uday asked, i have Rs.10000 and i wants to invest this money in Mutual Funds. which fund gives me good return. risk factor is no limit.
Rahul Goel answers, at 2008-02-14 12:55:54uday, hi. so you have appetite for a lot of risk. that's good. if this can be complemented by an investment horizon that is atleast 3 to 5 years, then you should inevst in a portfolio consisting predominantly of diversified equity funds like franklin flexicap and hdfc equity. having said that you need to ensure that your overall asset allocation is in line with your long term needs.
rrr asked, Hi Rahul, which tax saver NFO is best for now? SMI Tax Advantage series 1 or LOTUS AGILE TAX FUND.
Rahul Goel answers, hi. why invest in an NFO??!! in our view, its best that you avoid them. opt for existing tax saving funds which are well managed and have good track records.
reejit asked, I have invested 2000/-pm SIP each in DSPML TIGER, Reliance Diversified Power, TATA Infrastructure funds and also 30000/- one time in Reliance Natural Resources NFO, 30000/- per annum in ICICI LifeTime Super pension scheme as a Tax saving instrument, 20000/- one time in Franklin India Taxshield. Please suggest if my selection is ok, if not I can only change the SIP in the same fund house.Please advice.
Rahul Goel answers, reejit, hi. for one, the funds you own are all thematic/sectoral. then you have a tax saving funds an a ULIP. for me to be able to tell you what is best for you, i need to understand a lot more about you... but having said that, on a stand alone basis you can definitely improve the portfolio a lot. to begin with, rid yourself of sectoral/thematic funds... opt for well managed diversified equity funds instead.
Malini asked, Hi Rahul - I can invest around 50K per month. Any suggestions so that I get optimum returns. I also have around 30 lakhs in various PO schemes. Is it advisable to break these invt and invest in a house/flat?
Rahul Goel answers, malini, hi. you should buy only that much property as is essential for your own use and/or inheritance. avoid investing in property, especially in present times. you have money in PO... is it because you are risk averse?? if yes, then a couple of alternatives you can consider are MIPs and FMPs, both types of mutual fund schemes which could appeal to you. but if you have appetite for risk, and needs which are far out in the future, then you definitely need to take a re-look at your asset alliocation.
vaishnavsantosh@
rediffmail.com asked, Hi, Rahul Sir, I want to invest Rs. 1000000/- kindly advise where I supposed to invest that amount and how? Regards
Rahul Goel answers, santosh, hi. where you should invest will depend on your needs, tenure of investment, risk appetite etc etc. you should employ the services of an honest financial planner to guide you with this. in the meantime do not let your money idle away... put it in a low risk liquid plus fund.
vishnu asked, pleas will u suggest me to invest money in mutual fund, and get good return. i want to have rs. 1 crore in end of 2020, so, how much i have to invest monthly to get that much amount at that time.
Rahul Goel answers, vishnu,hi. assuming inflation at 5% and a normalised return of 15% pa, you will need to set aside rs 50,000 per month for the next 12 yrs. if you however do not want to adjust for inflation, then ofcourse the number will be a lot lower ar about rs 26,000.
mayankgr asked, hi rahul, i have already invested in mutual Funds like Reliance Power Diversified , JM Basic , Sundaram CAPEX, DSPML Tiger , ICICI Pru Infra . Currently I have lost 20% of my money. Is my investment is OK. or should i invest more to get good returns now as it may take lot of time to come in +ves.
Rahul Goel answers, mayank, hi. you have put all your money in sectoral/thematic funds... in my view, this is not OK! its time you had a serious discussion with whoever has been advising you on your inevstments...
mayankgr asked, hi, I need to invest money so that i can get good returns in short term say 6 months. Should i invest in Mutual funds or in Stocks . Plz tell me some good stocks and mutual funds so that i can get good returns in short term. Thank you
Rahul Goel answers, mayank, hi. if you have a six month horizon, stick to bank deposits and liquid plus funds. do not invest in stocks and equity oriented funds!
Ramav asked, I heard that long-term gains from non-ELSS funds are Tax-free. Is that true?
Rahul Goel answers, ramav, hi. the long term capital gains from equity funds are indeed tax-free.
Anand asked, I want to invest 25000 in tax saving MF. Which fund would you suggest?... Thanks
Rahul Goel answers, anand, hi. consider funds like franklin india tax shield.
Jose asked, Hi Rahul, Currently I can spend Rs.20,000 every month towards investments & interested in long term plans.Pls suggest a suitable protfolio within my limts which should also fetch me good returns in the long run.
Rahul Goel answers, jose, hi. you should have about5/6 equity oriented sschemes in your portfolio. all diversified; maybe a max of 10% can be allocated to a mid cap fund. look out for schemes which are managed by credible teams of fund managers and which have a good track record in bear / falling markets. your advisor should be able to help you build such a portfolio.
Deepak asked, I am salaried CTC 15 lacs, house loan of 15 lacs pending..investing 25K in mutual funds via SIP per month...insurance cover of 10 lacs...what all I need to do for financial planning from your point of view. I am 32 yrs old, married, 1 kid. Thanks
Rahul Goel answers, deepak, hi. first, be sure that the money you are investing in funds is sufficient to provide for your immediate goal - child's education. and then ensure that you are invested in schemes best suited to you. you should also start planning for your retirement... and ofcourse, you need a lot more insurance; term insurance that is. not ulips.
Padma asked, Is it wise to invest in PPF in early stage or when nearing retirement(as old age requires income with safety for capital)?
Rahul Goel answers, padma, hi. the ppf is a very popular investment tool. my view is that if you are already contributing to a governement scheme via EPF etc, then you need not mandatorily invest in PPF. the reason being that in PPF the tenure is long and the return is not fixed... it changes every year. so you may put money in today thinking you will get 8% pa.. but in a couple of years thagt return may be lower or higher.. either ways the uncertainty with regrds to returns is high in my view. the ppf is a great scheme... but be sure it fits into your asset allocation. if you need is 5 yrs from now, then there is no point in putting money in a PPF account which matures in 10 yrs from now...
aryaumesh asked, Hi rahul, currently am getting net pay of 30k and i am married and have one kid. currently am able to save 5K which is invested into SIP. I need to know what percentage of salary to be required to be financial strong at the time of retirement. currently am of 32 yrs.
Rahul Goel answers, hi. assuming your kid goes to college 15 yrs from now and assuming that in present times it takes about rs 20 lacs (graduation and post graduation); to provide for education alone you need to set aside rs 13,000 pm in assets earning you 15% pa!! i suggest what you do is save as much as you can; and as your savings grow you make up for this deficit over time. the idea is to start now; over time all will fall in line.
vsnurdy asked, hai sir. this is vishnu.i'm going to start working from july.i'll be getting nearly 30,000/month. As i'm new to investing where do u suggest me to invest my money. i want the returns in 3 years as i'm planning a business.
Rahul Goel answers, vishnu, hi. well, before investing a single rupee, be sure to educate yourself on money matters... i suggest you read the money simplified guides on www.personalfn.com. and the other important thing is that you should employ the servcies of an honest financial planner.
IdleInvestor asked, Hi Rahul, I have 3 questions relating to investment. 1) What are the best mutual funds to buy-in with a long term perspective of 5-7 yrs in the current market conditions. 2) What is the right price to buy Reliance Power now with investment horizon of 5 yrs, and what is its current P/E? 3) What is the additional benefit that I get by doing SIP every month rather than invest every month when I have money and don't when no money.
Rahul Goel answers, hi. the answers to your question. 1. consider funds like franklin flexicap and hdfc equity... build a portfolio of 5/6 funds. avoid thematic funds. 2. Equitymaster had recommended to its clients to avoid investing in the Reliance Power IPO. The current stock price is still above the fair value determined by us 3. SIPs are hassel free and elimiate the risk that you will ultimately try and time the market... suggest you do SIPs for the bare minimum you can provide for; for the variable income you can alwways invest as and when you have liquidity.
reje asked, i hv invested 5000 sip in hdfc taxsaver and 5000 sip in hdfc equity. i want save it for long term 5 to 10 years is my allocation right. give me another 3 good diversified equity fund in large caps and midcaps. thnx bye
Rahul Goel answers, hi.
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