Investing through SIPs? Choose wisely

Are you always at a loss while planning your finances?

Are you aware of the investment options available in the market? How best can you plan your finances? What are the crieria for evaluating an investment option?

Are mutual funds profitable investment options? When and how should one buy mutual funds?

In an hour-long chat on rediff.com, financial planning expert Irfan Rupani replied to many such queries. Here is the transcript:

irfan says, good afternoon, lets begin.

venkat asked, which SIP is best in the market now
irfan answers, at 2008-07-16 12:52:18hi, sip is a mode of investment and not an investment avenue by itself. you need to determine a fund that is right for you and then consider making an investment via sips.

chris asked, Hello Mr. Irfan. My portfolio consists of dsp opportunity, fidelity equity, franklin flexi-cap, hdfc equity, hdfc top 200, hsbc equity and reliance vision. Out of the funds listed which one to keep for the long term growth especially in the case of 2 hdfc funds I am holding for I will retire soon. With thanks, please advice.
irfan answers, hi, if you are about to retire soon and are going to rely on your investments to provide for your daily needs, there is a case for gradually shifting from equities to lower risk avenues like POMIS, FDs, FMPs.

Tushar asked, Can I withdraw from SIP before i complete term?
irfan answers, hi, you can withdraw the sip before completing term. however, check for the exit loads first, if any.

sreeni asked, which funds are good to invest inthe current market situation for, plan is to hold it for at least 5 yrs
irfan answers, hi, if you can take risk, you should go for well-managed diversified equity funds.

Sharat asked, Hi Irfan, I have two SIP's worth 2500 and 1500 PM and are reliance energy and ICICI infra respectively. Does it make sense to invest in them even in 2009 ( am doing this since Jan- 2008) or take up something new. Also, Does it make sense in going with mutual funds at this juncture for a 3-5 year period? Thank you so much, Sharat
irfan answers, hi, for one, you do not have a diversified equity fund in your portfolio. also the thematic funds have a performance cycle linked to the underlying theme. so unless you can time your entry and exit you should avoid adding further to your funds.

sreeni asked, Can you suggest some well managed diversified equity funds?
irfan answers, hi, for us to advice you accurately, we will need to more about your age, risk profile, investment objectives, etc. you can write to info@personalfn.com with your details.

chugh asked, SIPs gud for bearish market or bullish market
irfan answers, hi, sips is a recommended mode of investing across market phases. they take away the need to time the markets and also ensure that investments are made in a disciplined manner.

nirav1708 asked, hi irfan, this is nirav, i have invested in reliance equity growth plan SIP and my current investment till date is 20000 and my portfolio as on today is 18351. can you pls suggest me what should i do, or exit and invest in some better funds.
irfan answers, hi, having only one fund in your portfolio deprives you of diversification both at fund and an AMC level. we recommend that you add more funds that are apt for you.

Deep asked, Which is the best ELSS? I m 30 yr old.
irfan answers, hi, there is no such thing as a best fund in any category. you have to identify funds that are best suited to your risk profile and investment objectives.

Rakesh asked, I am 32. I have invested in 6 SIPs. DSP Tiger, DSP World Gold Fund, Sundaram Select Focus (large cap), Reliance Growth Fund (midcap), Reliance Div Power Sector Fund, Reliance RSF Fund - your thoughts. I earn about 90k/month.
irfan answers, hi, there is a clear bias in favour of certain AMCs and thematic offerings as well. you need to correct both problems. also, hope you have identified clear investment goals that you wish to achieve. if you haven't now is the time to do it.

bhushan asked, hi irfan i invested in sip is about my 5000rs per month . right now i have to invest the money keeping a view to save tax and also gain good benifit, so could u suggest me should invest more in sip or in mutual fund
irfan answers, hi, as i mentioned before, sip is an investment mode and not an investment in itself. if your risk appetite permits, you can consider starting an sip in a tax-saving fund (elss).

pappu asked, Hi Irfan. My portfolio is(SIP for each month), 2K in reliance growth MF and 1K in Tata infra, 1K in SBI Magnum, 1K in HDFC, 1K in Birla and 1K in Fidelity. My plan is for atelast 5 years. I have not changes this portfolio since 1.5Yrs. please suggest me whether i can continue or should i need to change? please suggest me sir.
irfan answers, hi, i need to know more about the funds, you have only mentioned the fund houses. for an objective evaluation, write to info@personalfn.com with your investment details.

satishg asked, is it good bet for SBI Magnum Contra Umbrella for SIP 1000/-
irfan answers, hi, please read our article on sbi magnum contra http://www.personalfn.com/detail.asp?date=7/10/2008&story=5

samit asked, Hi Irfan, I had invested 40K in ICICI Pru. Indo Asia Equity Fund last oct-nov., the present value is around 7 per unit. what should I do? Your suggestion.
irfan answers, hi, ipru indo asian fund is a global fund. you must first aim at building your core portfolio. read our article on this topic: http://www.personalfn.com/detail.asp?date=7/12/2008&story=3

Muralee asked, Hi Irfan i am 34 and working in dubai. i want to invest in SIP or any other fund which ensure me a monthly pension after say 20 years. do we have any mutual fund / sip for this?
irfan answers, hi, you can build a corpus using mutual funds. however, for a monthly pension, you must consider taking an annuity plan.

SandipDas asked, Hello Sir, I have two SIP's of Rs 1000 each in Reliance RSF & Sundaram BNP Paribas Select Focus....& i'm planning to start 2 more. I have decided that i'll invest in HDFC Equity ...i can't make up my mind on what the 2nd will be....do u suggest a balanced fund....??
irfan answers, hi, a well-managed balanced fund can add a degree of stability and diversification to your equity-heavy portfolio.

ravinder asked, i have invested Rs. 3000.00 p.m in sip how much money become after 20 years ?
irfan answers, hi, mutual funds are market-linked investment avenues. hence it is not possible to predict the returns over such a long period of time.

Antonio asked, Hi irfan, just need your suggestion if i want to invest Rs.25000 every month in mutual fund Or SIP which is the best fund as per you i can invest and for how long?
irfan answers, hi, i have dealt with a query of this nature before. please refer to the same.

Jandhyala asked, Hi Irfan I Have invested 2k/month in below funds DSP Merrill Lynch India TIGER fund,Reliance Diversified power sector fund,UTI Infra stucture fund and 1500/moth in SBI Magnum Tax Saver 96 and HDFC Tax Saver since Oct 2007.wether I should continue with these funds or not?
irfan answers, hi, i have noticed except for the tax-saving funds, all other funds are of thematic nature. these funds are suited to investors with a high risk appetite with a view on the underlying theme/sector. consider adding well-diversified equity funds.

Bhavan asked, How is sundarm BNP Paribas funds doing. In which fund of Sundaram is good for SIP.
irfan answers, hi, we like the amc. some funds from sundaram amc are well-managed and you can consider investing in them based on your risk profile and investment objectives. however, you need to diversify across other amcs.

ajeet asked, i want to invest for my child education & marriage, he is 1 year old pls suggest equity plan
irfan answers, hi, to know more about investing for child's education and marriage please click here: http://www.personalfn.com/investment/ms/targetbook.asp?title=Guide To Planning Your Child's Future &filename=ChildPlan.html&bookId=24

joybose asked, hi irfan, i have noticed that your co. is giving services only in some cities. i am based in kolkatta and want to take advice from you. pls help
irfan answers, hi, we do give mutual fund advice to investors who reside in other cities. for details, please refer to: http://www.personalfn.com/fsplus/

Bholey asked, are these funds are ok to invest SIP - ICICI Pru Infrastructure, DSP Merrill Lynch India TIGER fund, SBI Magnum global Fund, Birla Sun Life Equity fund, Reliance Diversified power sector fund
irfan answers, hi, you have too many thematic funds. that is not the recommended way of investing for the long-term. you must consider investing in well-managed diverisifed equity funds.

manish asked, Hello sir! can you suggest me some elss scheme.
irfan answers, hi, we like franklin tax shield, fidelity tax advantage among others.

bhavan21 asked, I invested huge amount in different funds when market was growing and fund grew by 30%. But now market has crashed and I am down by 16%. whatshould I do. Should I stay. I am ready to hold for next 3 years. Pls suggest.
irfan answers, hi, if you have a 3-5 year investment horizon, sips should serve the purpose.

nikunj asked, Hi Irfan, I want to Have a steady income after my retirement, for this purpose what do you suggest, Invest in SIP with a long term view or Investing in a Pension Plan. I am 26 years Old
irfan answers, hi, we have replied to a query of this nature earlier. please refer to chat.

shadab asked, hi irfan what is overall view on sip , how long one should keep it , taking in consideration that the amount which has been invested is a surplus income of that individual & he dsnt require it for long period ..say 10 years ....based on this information how he should he plan his portfolio ?
irfan answers, hi, sips are done to achieve a specific investment objective. your financial planner will tell you exactly how much you need to invest and over what time frame to help you achieve your investment goal. a long-term investment horizon is a prerequisite.

Harry asked, Hi Irfan, my major portfolio consists of bank fixed deposits & 1 house (loan repaid). Now I am looking at some medium risk/return investment. a. When is the best time to start investing in Equity MF's b. What are the risk involved in investing in SMP's / Debt Interval funds
irfan answers, hi, there is no best time to invest. even now would not be a bad time to get started. a word of advice be sure of the risk you can take on venturing into equity mutual funds. apart from equity funds, maybe you could consider balanced funds as well. for more details please write to me at info@personalfn.com

wannabefinanciallyfree asked, Is investing in a gold fund a good option??? If yes, do you have some reference materials in your website?
irfan answers, hi, there is a case for gold in your asset allocation. to know more about gold, please click here: http://www.personalfn.com/detail.asp?date=10/22/2007&story=7

Aditya asked, Hi, I am an Indian located in amuritius I am looking at options of investing money. Stocks are not my cup of tea & i have already invested in real estate. Could you pls give me some safe options where i should invest?
irfan answers, hi, you can consider investing in debt avenues like fmps, fixed deposits, debt funds.

harish asked, i had invested in dsp equity,top 100,balenced fund and in hsbc equity and advantage fund. through SIP...whether my selection is good if not tell which fund is not good
irfan answers, hi, by and large, your portfolio looks sound.

Dibyendu asked, Hi, From Reliance Regular Savings Fund- Equity opation, could i get good return if i started SIP for 3 yrs. in the present market condition.
irfan answers, hi, i have answered a similar query earlier, please refer to the same.

irfan says, hi everyone, looks like we have run of time. for more queries, please feel free to write at info@personalfn.com