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 Sailesh Multani offered some valuable tips.
Sailesh says, Goodafternoon everyone, lets start the chat session
saleem asked, Hi Sailesh, I am willing to invest some 15 K pm in MFs, Can you please suggest some good MFs. and als o instead of putting funds in banks i want to go liquid/debt funds. Any good liquid/debt funds for parking my money.
Sailesh answers, at 2009-08-19 12:18:28you can consider fund like HDFC Cash Management Fund - Savings Plan to park your money for few days to months
Paresh asked, looking to new tax code, should I still go for housing loan for investment purpose
Sailesh answers, hi, if buying a house is a necessity then there is no option but to buy. In my view the direct tax code will result in more tax saving in the hand of the tax payer. This, however, will vary from individual to individual. You should calculate the tax payable under the current tax lawa with the tax payable under the new code and see the difference. The decision to take a loan for tax saving purpose will depend on the results thrown by the comparative analysis
khokon asked, Most of the top HDFC equity funds have more investment in ICICI bank than HDFC Bank. Can you make out any reason ?
Sailesh answers, hi, the decision to invest in a particular stock rest with fund manager who in turn takes a call based on the future growth prospects of the company under consideration. If the company's growth prospects look good and the price of the share is at a attractvie level then it will make it to the portfolio. I cant make out any specific reason. Its the call of the fund manager
mani asked, What is gold etf? kindly say abouts its + and -'es? give tips on some great performers? Thanks in advance.
Sailesh answers, hi, Gold ETFs are exchange traded mutual fund that invest in gold. Its a convenient way of investing in gold. These are listed on the stock exchange and can be bought and sold like a equity share. Since MF buy gold in large quantities, the overall price is less compared to buiyng gold from a bank or a jeweller. Among the better performing gold ETFs you can consider funds like Quantum Gold ETF and Benchmark Gold ETF
Murali asked, Hi Sir, Good Afternoon I am 38 year old and working as IT consultant and my wife is central govt employee, We have 2 kids ages are 6years and 3years. Could you please help me how i can invest now onwards so that i want to retire after 10 years. at present Iam having 10lakhs ready cash now and also can save 30000 per month now onwards. Could you please let me know where I can invest this, My previous investments were as follows. 1. 35000 / Year LIC 2. 11800 EMI on house loan of 14 lakhs(paying from 2003) 3.30000 MF 4.10000/year Prulife ICICI 5. 10,00,000 in stocks in which 30 % are lost
Sailesh answers, hi,you have manay financial goals to achieve like your children higher education, their marriage and you and your wife's retirement. In my view you should get a comprehensive financial plan made for yourself and your family. The plan will help you decide on how you should invest your current investments as also the future savings.
raj asked, I want to invest for my 2 yr old child. Kindly suggest an Insurance plan into a children's scheme a children's policy that provides cover on the life of the parent and not of the child. thks
Sailesh answers, hi, assuming you are investing for your child's higher education and marriage, I would not recommend any insurance plan. Rather invest in a mix of equity and debt funds. Get a investment plan made for your child's education and marriage goal and invest as per the asset allocation suggested by the plan.
PagalAadmee asked, Dear Sailesh, I am 25, is it a good time to start investing in Pension Plan or Retirement Plan? If yes....which plan should I go for? Please suggest.
Sailesh answers, hi,in my view get a retirement plan made for yourself and invest as per the same. A pension plan is not the answer to plan for your reitrement. When you plan for your retirement, you need to ensure that you maintain the same standard of living post retirement as was before the retirement. A pension plan may not be able to generate sufficient income fo you to maintain your standar of living. Since you are young, you can afford to take risk with your money. According to me if you maintain an asset allocation of 70% in equity and balance in debt for the next few years it will help you grow your moeny faster. Invest in good quality equity funds.
Ajay asked, What is a good option to invest money for a short term of 1 to 2 year, which will give more returns ?
Sailesh answers, hi, if you are willing to invest for atleast 18-24 months and take some risk, invest in Monthly Income Plans (MIPs)offered by mutual funds. These funds typically invest 75-80% of the corpus in safe fixed income securities and the balance in equities. For investment horizon of one year and less, I would recommend that you opt for a bank FD.
vinodloka@
rediffmail.com asked, With respect to Life Insurance,which one is better from 'risk' coverage point of view - 1) Buy a standalone Term Plan (life insurance) policy and a standalone Accidental Death (General Insurance) policy. 2) Buy an Endowment/Money back policy.
Sailesh answers, hi, as far as insurance is concerned, you should only consider term plan. Term plan offer only risk cover. Term plans are cheap and one go for larger sum assured compared to the endowment or money back policies.
sanjay asked, dear sir i have invested 04 lacs in mf debt schemes from last 1 year can u confirm it is good time to switch in equity scheme or not kindly confirm
Sailesh answers, hi, yes its a good time to enter stock markets but before you do that assess your risk appetite. While debt is relaitively safe, equities offer higher return with higer risk. Also your investment horizon should be atleast 3 years if you wish to invest in equit funds.
Kumar asked, I am at 42 and have a corpus of Rs.60 lacs to invest. I want retire from job and start looking for business opportunity with investment of not more than 10 lacs. I dont have any liability other than LIc premium @ Rs.1 lac per annum. I want to have a fixed monthly income by way of interest or dividend. Also what is the max amt I can expect to receive per month on a investment of Rs.50 lacs.
Sailesh answers, hi, from the details provided by yuu, I suggest that you make a post retirement cash flow for yourself. The cash flow should take into account all your income and expenses for the next 30-40 years. You should then calculate how long will your exisintg investments last. It will also help you decide how much should be invested in equity and debt. If you find this exercise too complex, take help of an investment planner/advisor
mubsy asked, I have a home loan for which am paying an interest of 1.6 lakhs annually now. I have money to preclose the whole loan amount too.Here what do u suggest , shall i preclose the home loan and save interest money OR continue with the home loan to get tax benefit of 1.5 laks and invest the money i have some where els ? whats the best option to do here
Sailesh answers, hi, there are 2 answers to your questions. One is based on mathematics - if you are able to save tax and it leaves you with more disposable income which can be invested in other investment instuments, then continue with the loan. The second answer depends more on your mental make up. Debt is always been considered burdensome. If you prepay your loan, you will move faster towards peace of mind though you may have to pay more in taxes. However, the EMI which you would have paid otherwise can be channelised in to mutual funds etc
ghd asked, want to invest in MFs rs.5000/- per month. I want to take HDFC Top 200, HDFC Tax Saver. What is growth of these funds
Sailesh answers, hi, invest in HDFC Top 200 Fund and for tax saving you can consider fund like Franklin India Taxshield
ff asked, Is it advisable to put majority of the tax saving investements in ULIPs rather than in ELSS?
Sailesh answers, hi, I would not recommend ULIPs at all. For tax savings you should have a combination of insurance premium (term plan), ELSS and PPF thoguh PPF under the new direct tax code may not be attractive
dude asked, Hi Sailesh. Do you think debt funds are a good alternative to a savings or fixed deposit account? If so, can you please suggest the most appropriate kind of debt funds in the current scenario? How do debt fund returns change with respect to interest rate movements?
Sailesh answers, hi, bank FDs offer fixed rate of interest. Returns from debt funds are linked to the movement of interest rates in the economy. Debt funds do well when the interest rates are falling. These should be avoided when the rates are set to move up. This means returns of debt funds are market linked and not assured
srinivas asked, should i make investments in Sbi Magnum Taxgai, Sundaram Tax scheme Dividend options at this movemebt for Tax Saving purpose?
Sailesh answers, in the ELSS catoegory I recommend Franklin India Taxshield and Fidelity Tax Advantage Fund
abhi asked, I want investment in PPF .... can i do it through ECS
Sailesh answers, hi, investment in PPF cannot be done through ECS.
Mahesh asked, As per earlier IT act, I had invested in some tax saving schemes. But as per proposed Direct tax code, these will be taxable at maturity. This will upset my goal based investments. In future how to take care of similar changes, so that it does not affect the calculations significantly?
Sailesh answers, hi, yes the new direct tax code will result in lot of changes and more so the goal based plans as all your post tax returns are likely to chage. Hence, it is important for your reivew the plan in light of the possible changes in your post tax income and rates of tax on capital gains and retirement benefits like EPF/ Gratuity
maoxlnc asked, hi saliesh,we had 2 lic polices of jeevan anand and 1 jeevn mitra all put together 4 lakhs.do you suggest me to go for one more or put the amount in ppf to pacify the 80c limit
Sailesh answers, hi , the insurance cover should be taken to cover the risk in case anything happens to you. It is important for you to calculate the human value using the HLV calculator before you take any insurance policy. Click her to calculate your HLV :
http://www.personalfn.com/calc/hlv.html
Adi asked, Dear Sailesh, I am working as a project manager and have invested in stocks with a long-term goal in mind. I have invested around 6 lacs mostly in Small and midcap stocks and also 15k in Reliance infra mutual fund. I am looking for some good returns (200 to 300 % looking at the trend in the last 7 to 8 years) may be in the next 7 to 8 years. Do you think my plan is right and the market will actually give me the returns I am expecting. Thanks in Advance.. Kind Regards Adarsh.
Sailesh answers, hi, it is important to link your investment to your life goals, retirement being one of them. In my view 15% return from a well managed and diversified equity funds is a reasonable expectation. 200-300% returns over the next 7-8 years are on the higer side and you need to tone down your expectation. Invest as per your investment plan and keep your return expectation from equity within 15%
ams asked, How are the MIP's of MF Taxed?
Sailesh answers, hi short term capital gains from MIPS are clubbed with your total income and tax according to your income tax slab. Long term capital gains from MIPs are tax as follows: 10% without tax or 20% with indexation, whichever is lower
mihir asked, sir, how would u rate TATA INFRASTRUCTURE FUND? is it worth investing?
Sailesh answers, hi, TATA Infrastructure Fund is a thematic fund. The fund is not well diversified and the performance of the fund depends on the performance of the sectors that constitue the underlying theme. I would not recommend that you invest in any secotral or thematic funds. Instead invest in a well managed diversified equity fund with a track record of atleast 5 years to show for.
sarab asked, Hi, Sir. i am now 44 yrs working in MNC saving about Rs 50k ,wants to work till 50yrs.kindly advise about how/where to invest so that may not depend others Regards
Sailesh answers, hi, the answer lies in making a retirement plan for yourself. The plan will suggest if your savings so far are sufficient to take care of your post retirement needs. IF there is any shortfall, then you can work towards reducing or eliminating the same.
ghhhhhh asked, Could you please explain netax code and How it will affect the Maturity on ELSS,PPF and Other retirement /pensin plans. Thanks,Vijay.
Sailesh answers, hi, as per the new direct tax code, all the investments done in PPF/EPF or any other retirement schemes after 1st APril 2009 will be taxed at the time of withdrawal. All investment done before that and withdrawn after 1st April 2009 will not be subject to any tax.
Sailesh says, Thank you all for participating in the chat session. If you have any further queries, please feel free to mail me at: info@personalfn.com