Critical decisions should not be taken hastily, and making investments is one such decision. We call investment related decisions as critical because it involves the investor's hard earned money, which they have set aside to meet a critical need/requirement in the future.
A wrong investment decision could have a detrimental impact on the investor's finances.
As we have always emphasised, investments should be an outcome of a well-prepared financial planning exercise and each investment should fulfill a future goal/objective. It is for this reason that investors should not fall for any investment option only because everyone else is investing in it or because the advertisement promises high returns. Instead, they should evaluate each investment option critically before investing in it.
Also, investor's should make sure that the investment option, they are zeroing on, matches their risk profile. That is why it is advisable to take the help of a well-qualified and credible investment advisor/planner for this purpose.
One such instance when investors feel the impetus of investing and could be wrong in their investment decision is when markets are moving northwards. In such situations, the confidence level among investors rise disproportionately and they tend to become careless, often overlooking some of the basic tenets of investing.
Investors should understand that the above-average performance of a particular investment avenue could be the result of favourable market conditions rather than the investment itself. But the fact remains that a wrong investment decision stays that way and over the long-term a poor investment inevitably stands exposed.
At present, tax-planning season is in full swing. This is another occasion when investors make hasty decisions especially those who have woken up late to the fact that they can save some tax through investments. Again, tax-planning is an exercise, which investors should start well in advance under the guidance of a qualified investment advisor.
Since tax-saving funds, also known as equity-linked saving schemes (ELSS), are a must-have investment for risk-taking investors, we have some advice for them on how to go about selecting the right tax-saving fund.
This process begins with an evaluation of the investor's risk profile and culminates with an evaluation of the tax-saving fund's investment style, philosophy and performance on parameters related to NAV returns and risk.
It was another positive week for investors as stock markets continued to move up. The BSE Sensex appreciated 0.71% during the week to close at 14,283 points; the S&P CNX Nifty ended at 4,148 points (up by 1.42%). Mid caps played second fiddle to large caps; the CNX Midcap gained 0.62% to close at 5,316 points.
Leading open-ended diversified equity funds
| Diversified Equity Funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | SD | SR |
| Birla India Gennext | 16.30 | 1.88% | 6.75% | 41.25% | 26.55% | 7.60% | 0.32% |
| Kotak Lifestyle | 12.15 | 1.39% | 6.95% | 44.48% | - | 8.15% | 0.17% |
| Fidelity Equity | 21.93 | 1.29% | 7.27% | 42.41% | 44.92% | 7.43% | 0.47% |
| Principal Resurgent | 76.02 | 0.85% | 5.98% | 34.81% | 36.24% | 6.79% | 0.36% |
| HDFC Prem. Multi. | 18.95 | 0.69% | 4.74% | 33.05% | 28.31% | 7.38% | 0.38% |
(The Sharpe Ratio is a measure of the returns offered by the fund vis-à-vis those offered by a risk-free instrument) (Standard deviation highlights the element of risk associated with the fund.)
Birla India Gennext (1.88%) surfaced as the top performer in the diversified equity funds segment, followed by Kotak Lifestyle (1.39%). Fidelity Equity (1.29%) and Principal Resurgent (0.85%) also featured in the list.
Leading open-ended long-term debt funds
| Debt Funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | SD | SR |
| Birla Dynamic Bond | 11.33 | 0.18% | 0.37% | 3.31% | 6.16% | 0.15% | -0.57% |
| ABN AMRO Flexi Debt | 11.42 | 0.16% | 0.69% | 5.08% | 8.71% | 0.28% | -0.11% |
| Kotak Flexi Debt | 11.47 | 0.15% | 0.62% | 3.65% | 7.26% | 0.07% | -0.23% |
| Grindlays Super Sav. MTP | 11.79 | 0.15% | 0.53% | 3.58% | 6.99% | 0.14% | -0.42% |
| PruICICI Long Term | 15.42 | 0.14% | 0.47% | 3.35% | 6.58% | 0.35% | 0.12% |
Birla Dynamic Bond (0.18%) topped the long-term debt funds segment. ABN AMRO Flexi Debt (0.16%) and Kotak Flexi Debt (0.15%) occupied second and third positions respectively.
Leading open-ended balanced funds
| Balanced Funds | NAV (Rs) | 1-Wk | 1-Mth | 6-Mth | 1-Yr | SD | SR |
| Can Balanced II | 38.50 | 0.76% | 3.11% | 17.92% | 28.81% | 6.23% | 0.42% |
| FT Balanced | 33.78 | 0.62% | 4.77% | 27.40% | 33.41% | 4.94% | 0.42% |
| ING Balanced | 18.72 | 0.43% | 4.06% | 24.22% | 19.16% | 5.14% | 0.33% |
| Magnum Balanced | 26.48 | 0.34% | 2.87% | 26.94% | 29.87% | 5.20% | 0.49% |
| Birla Sun Life 95 | 180.46 | 0.28% | 4.75% | 29.06% | 29.66% | 4.70% | 0.42% |
Can Balanced II (0.76%) was the leading balanced fund over the week, followed by FT Balanced (0.62%) and ING Balanced (0.43%).
Recently, the Personalfn Research Team launched its latest issue of the Money Simplified. The issue explains the concept of Human Life Value (HLV), a much-misunderstood concept in the Indian context. We have explained in great detail, how the HLV should be computed and how investors should go about providing for it.
Since HLV is all about determining one's worth in monetary terms, this concept is very pertinent from a financial planning perspective.
We have also devised an HLV calculator for our visitors. We recommend that visitors download the guide, understand what HLV is all about and then use the HLV calculator on the website to find out how much they are worth today. We can assure our visitors that this will be a most eye-opening experience for them.
