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 on Wednesday, financial planning expert Irfan Rupani replied to many such readers' queries. Here is the transcript:
irfan says, hi, lets begin the chat
Bardhan asked, I want to invest about 50k in MF. Is it better to go for SIP or invest in a MF at one go? Which is the best MF to invest now?
irfan answers, at 2008-09-10 12:46:31hi, the sip route is always preferable. there is no such thing as a best mutual fund. you must first decide what you wish to achieve, your investment tenure and risk profile. based on these you should select funds that are right for you.
hi asked, Can u throw some light on the investments made by the companies under their ULIP schemes?
irfan answers, hi, ulips invest based on the mandate that the fund manager has taken. for instance, the aggressive option, can invest a higher portion of their portfolio in equities, while the balanced option invests a lower portion in equities.
nothappy asked, Is investing in shares directly better or investing in mutual funds? Some of my friends keep investing in share markets and some make decent amounts. Is it advisable to invest in share markets if you dont have reasonable idea about it? Is investing on stock tips profitable and advisable?
irfan answers, hi, investing directly in shares is best for individuals who have access to research and the time to study equities on a regular basis. while in rising markets its not uncommon to find investors making profits based on tips or even speculative investments paying off, in a downturn like this, the mettle of the investor is truly tested. to that end, for uninformed investors opting for the mutual fund route is more advisable.
hasina asked, How best is sbi global and contra. which option is good wether growth or dividend
irfan answers, hi, sbi global is a mid cap fund, while sbi contra adopts the contrarian style of investing. broadly speaking, one would expect a mid cap fund to be riskier than a contra fund. as regards choosing between growth and dividend options, the underlying portfolios are the same hence investors must make a choice based on their need for liquidity.
RAHUL asked, hi, this is rahul, i am investing 4000 monthly in SIP. at the time opening the a/c they said that i will get a return of 80% minimum but after 7 month i did not get retrun. so will i do. i will invest in any othet MF or there is any other options to invest the money?
irfan answers, hi, if your advisor has promised you an assured return in a market-linked instrument, then its a classic case of mis-selling. if you believe that your mutual fund is a worthy investment from a long-term perspective (at least 3-5 years) it would not be a bad idea to stay invested.
DNBALA asked, Wanted to check if it makes sense to pull out money from Mutual funds esp when the NAV has falled to 50% levels and reinvest it in FMP's and Liquid Funds?
irfan answers, hi, we have recently dealt with your query in an article on our website, please click below:
http://www.personalfn.com/detail.asp?date=9/6/2008&story=3
asif asked, What is SIP
irfan answers, hi, to know more about sips, please read our article:
http://www.personalfn.com/detail.asp?date=12/20/2007&story=3
raju asked, can i invest in FMP? is it beeter than FD
irfan answers, hi, fmps are likely to prove more attractive on a post-tax basis for investors in higher tax brackets. however, unlike fds, returns are only indicative and not assured. for details, please read our article:
http://www.personalfn.com/detail.asp?date=4/29/2008&story=1
Parag asked, Can we safely say that any MF from reputed house will give good returns in 15-20 year time? What do you think is a good investment period for any MF?
irfan answers, hi, every fund from a reputed fund house need not be a worthy investment. moreover, 15-20 years is too long a time frame to comment on the prospects of any fund house/mutual fund.
Warren Buffer asked, What are the advantages of ULIPs. I keep hearing that its not a good investment but still there are a lots of poducts.
irfan answers, hi, its not like ulips are bad products. the problem is that they are mis-sold and not properly understood by investors.
Faiz asked, Hi Irfan, please also suggest a comprehensive Web resource where one can log in and view/read unbiased information on Mutual Funds, ULIPS and other investing options. Thanks
irfan answers, hi, please feel free to visit the website i represent by clicking here: www.personalfn.com
redeesh asked, CAN YOU PLEASE SUGGEST US SOME GOOD ELSS FUNDS TO INVEST ??I HAVE INVESTED IN ELSS FUND OF KOTAK MAHINDRA GROWTH .THE RETURNS HAS BEEN MUCH DISAPOINTING....
irfan answers, hi, some of the elss funds we like include - franklin taxshield, fidelity tax advantage among others.
jenson asked, HI Irfan: i have been invested wiht Kotak Growth fund for the last 2 years and 11 months. my three years locking perid is due. the premium i have comitted to is 61000 per year. i made an initial investment of 1.4 lakhs the first year with Rs. 40000/- going towards administrative fees immediately. my fund value as of today stands at round about the same rate it was when i invested. what should i do? Should i Exit after i complete 3 years?
irfan answers, hi, admittedly like several ulip investors you find yourself in a difficult situation. we have dealt with this topic in an article, please click here:
http://www.personalfn.com/detail.asp?date=7/31/2008&story=3
Ashish asked, Hi Irfan, I am heavy invested in Fidelity Equity Fund thru SIP since 2005; Currently the total investment only in this fund is Rs.1 lac Plus. Planning to continue the SIP for 10 more yrs; What are your views on this Fund?
irfan answers, hi, fidelity equity fund is definitely a well-managed diversified equity fund. but you should consider diversifying across more funds. holding a portfolio of just one fund is not advisable.
Gitansh asked, Hi Irfan, I want to buy a long term policy for my baby for approx 15-20 years which should also cover educational expenses and all. Is the ULIP plans are better options?
irfan answers, hi, instead of just one avenue (ulip) you should aim at building a portfolio (comprising of mutual funds, fixed deposits, among other options) for your child's education. to know more you can download for free 'Guide To Planning Your Child's Future'
http://www.personalfn.com/investment/ms/archives.asp
roopali asked, give names of the best 5 diversified equity funds which u recommend to invest in..timeframe of 5 to 7 years
irfan answers, hi, without knowing details like your risk profile, investment objectives, investment tenure, its difficult to draw up a list of funds for you. please write to info@personalfn.com with details to enable us to advise you better.
roopali asked, give names of the best 5 diversified equity funds which u recommend to invest in..timeframe of 5 to 7 years
irfan answers, hi, without knowing details like your risk profile, investment objectives, investment tenure, its difficult to draw up a list of funds for you. please write to info@personalfn.com with details to enable us to advise you better.
bob asked, Hi Irfan should i stop my sip in HDFC equity? The return are bad and this fund was recommended by personalfn
irfan answers, hi, our view on hdfc equity fund is that its a well-managed diversified equity fund that risk-taking investors with a long-term horizon should continue to be invested in. would request you to provide me with details of the branch you are dealing with so that we can arrange for someone to meet up with you and assuage your concerns.
akash asked, Hi .. CAN YOU PLEASE GUIDE ME WHICH IS BETTER OPTION IN TURNS OF SAFETY AND RETURNS BOTH... TAX SAVING MUTUAL FUND + LIFE INSURANCE OR ULIPS PLEASE ANSWER I M CONFUSED FOR THE LAST 2 YEARS.. I WANT TO INVEST FOR A TIME FRAME OF AROUND 5 YEARS...
irfan answers, hi, our choice is for a tax-saving mutual fund and life insurance (through a term plan). we maintain that individuals should opt for investments and insurance through separate avenues rather than a single avenue like ulips.
akash asked, Hi .. CAN YOU PLEASE GUIDE ME WHICH IS BETTER OPTION IN TURNS OF SAFETY AND RETURNS BOTH... TAX SAVING MUTUAL FUND + LIFE INSURANCE OR ULIPS PLEASE ANSWER I M CONFUSED FOR THE LAST 2 YEARS.. I WANT TO INVEST FOR A TIME FRAME OF AROUND 5 YEARS...
irfan answers, hi, our choice is for a tax-saving mutual fund and life insurance (through a term plan). we maintain that individuals should opt for investments and insurance through separate avenues rather than a single avenue like ulips.
rupa asked, pls. tell me which is the best sip plan for 1 year.
irfan answers, hi, in our view, sips are meant for the long-term (at least 2-3 years). we have recently written an article on this topic:
http://www.personalfn.com/detail.asp?date=8/27/2008&story=4
chintu asked, how is gold etf fund for investment
irfan answers, hi, if you want to invest in gold from an asset allocation perspective, gold etf is a good option.
Madhu asked, Is Midcap funds make sense now?
irfan answers, hi, if you have the risk appetite for it and a long-enough investment horizon (at least 3-5 years) mid cap funds can be considered now.
Ram asked, Hi Irfan, Looking at the market fluctuations, which one do you prefer: Growth funds or Dividend funds?
irfan answers, hi, growth and dividend are options offered by mutual funds and not independent mutual funds. your choice between growth and dividend option depends on your liquidity requirements.
devesh asked, i want to invest in something that has high liquidity and is safe like a bank deposit with descent returns. What is a better option.
irfan answers, hi, you can consider parking your money in liquid funds for the short-term. typically, investment avenues for a longer time frame offer a better return but risk is higher as well.
skr asked, Sir everyone says SIP is best route, I have been Investing in Mutual Funds for last 3 years through SIP route. But as on date my investment is marginally above my investment cost. Hardly there is any return. What should I do, though initially I thot i will invest continuously for about 18 years for the rest of my working life.
irfan answers, hi, while sips must be made over the long-term, it is also important to invest in well-managed funds. even the best of intentions (sip for long-term) will not deliver the desired result, if the underlying fund is not the right one.
puravisaty asked, Hello sir in how many months we can redeem the SIP Investments without exit load
irfan answers, hi, this varies across fund houses. its best to check with the fund house.
irfan says, hi looks like we have run out of time. feel free to write to me at info@personalfn.com with your queries.