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 Thursday, financial planning expert Sailesh Multani offered some valuable tips. Here is the transcript:Sailesh says, Hi, goodafternoon and welcome to this chat session
Sudam asked, I am 30 but not sure where to do savings.. please help
Sailesh answers, at 2010-06-03 12:54:42Hi, since you are young I would recommend a larger allocation to higher risk investment like equity. If you have long term goals like retirement to take care of, then equity funds are the ideal investment options to build the necessary retirement corpus. Research shows that over a period of 10-15 years equities do give positive returns. The average return from equity should be in the range of 12%-15% p.a.
tikkamdas asked, pls advise which mid cap fund are good for lumpsum investments
Sailesh answers, Hi, in the midcap category I recommend Sundaram Select Midcap. It has an enviable track record of over 5 years to show for. You allocation to dedicated midcap fund should be capped at 15% of the overall portfolio.
rahul asked, Is this the right time to invest in markets after the European recession?
Sailesh answers, Hi, if you are long term investor willing to invest for 3 years and more today this is the right time to invest. There is no doubt that Europe is in a financial mess and it will take few years for it to clear the same. There will be a negative impact on the investment sentiment India too. But India story still remains intact. Fundamentally Europe will have little impact on India. Currently the equity market is trading at an attractive level. There are lot of stocks that are available at reasonably lower price compared to their intrinsic value. In my view long term investors should start investing at the current levels. Stagger your investments. Don't just invest the entire sum in one go. Divide the investment into 3-4 phases and invest as and when markets correct sharply say 3%-4% in a day.
puni asked, hi please tell some good and safe insestments for middle class people
Sailesh answers, Hi, if you are particularly looking for safe investments, then bank FDs are the best. You have an assured return in the form of interest. Also, the capital is intact. Having said that, I am of the view that one should also have some exposure to high risk investments like equity shares and funds. This is important to increase the average return of your investment portfolio as inflation is bound to eat into your capital over a period of time.
sks asked, What is the criteria for selecting Mutual Funds
Sailesh answers, Hi, to separate the performer from underperformers, you need to look at the past performance i.e the track record. Agreed, that past performance is no guarantee of the future but it definitely gives some idea about how the fund is likely to perform going ahead. A five year track record is a good indicator to ascertain the performance of the fund. You need to ascertain whether the fund has stuck to the investment objective. Look at the credibility of the fund house and the fund management team.
Arnab asked, Which pension scheme is the most adviced for me. My age 35 and income 4 lakhs / annum. Also if mutual funds what are the best options? Thanks
Sailesh answers, hi, I dont recommend any investor to plan his reitrment by buying a pension plan. Instead one should start with a retirement plan to find out what is the corpus needed to live a comfortable life post retirement and then work towards building the same with the help of equity funds, bank deposits, bonds, gold and real estate. Buying a pension plan is the most inefficient way of planning for one's retirment.
riyaz asked, I am planning to invest Rs: 1 Lakh. Which is the good option for short term investment and return?
Sailesh answers, hi, if your investment horizon is less than a year then the best option is to invest in short term income funds. these are more tax efficient and liquid than fixed deposis
Sri asked, Can you also suggest that where we have to do proper investment for gaining better return and safe money hold for the life as there are more threat by recession, policy changes by govt, market trend in stock etc...
Sailesh answers, hi, the best apporach is to plan your investments in line with your objective and risk tolerancd level. If your goal is 10-15 years away then equity is ideal for you. Having said that you need to regularly review your portfolio every 6 months to wed out the inefficiencies that may have creeped in . Also review your plan every year to ensure that it remains on track to achive the set objective.
Mazhar asked, Hi! Could you please tell me where should I invest to get max return after 20 years. I want to make investment for my kid so that they can use it when they are 20+ in future.
Sailesh answers, hi, the best investment for 20 years is definitely equities. Invest in equity funds that are well managed and diversified with a proven track record. Having said that I would also like to add that do not invest all your money in equity. Invest a small portion, say 10-15% in safe assets like bank fixed deposits. A small investment of 10% in gold is also a good idea.
apparaopatil asked, I would like to invest in a new SIP. Can u plz advice which is the best sip in market now
Sailesh answers, hi, you can consider investing in funds like Franklin India Bluechip fund and HDFC Top 200 Fund among others.
pieush asked, Hi i am 31 not married , i want to invest for 4 years gor good return let me know good medium
Sailesh answers, hi, you can invest in a balaned fund like HDFC Prudence Fund and DSP BR Balanced Fund. These funds invest atleast 65% of the corpus in equity and balance in debt.
Joseph asked, i need to invest in mutual fund ..tax saving ....sip. Kindly advice the best fund which will give me good return. Monthly sip to be 2000/-.
Sailesh answers, hi, you can consider investing in Franklin India Taxshield and DSP Tax Saver among others
DrEngineer asked, I am just 23 years old and want to make some investment..Am currently saving 10k per month..So what is the best thing that i can do??
Sailesh answers, hi, acording to me the best thing to do is to start building your equity portfolio. Invest in equity funds through the Systematic Investment Plan (SIP). Divide the amoount of Rs 10,000 into 4 parts and invest in funds like HDFC Equity Fund, Franklin India Bluechip Fund, Fidelity Equity Fund and DSP BR Equity Fund
dcsa asked, what are the safe investment for long period e g for retirement corpus 1 cr hoe much i invest today monthly and in which plan.
Sailesh answers, hi, if you can share more details like your current age, expected reitrement age, I will be in a bettr position to give you the precise answer. You can write to me separately at sailesh.multani@rediffmail.com
gkrkrishnan asked, Hi, i hav just returned back from US and have an savings of 15L. I want to invest it wisely as this has been the biggest savings of my life. Want some short & long term options. And would want to keep aside 5L for some business purposes to liquidate at short notice. Pls advice.
Sailesh answers, hi, the answer to your queston lies in doing a comprehensive finanical planning for yourself. The plan will help you in deciding the amount you need to invest on a regualr basis to achieve each and every goal set by you. I would advise you to take help of a professional financial planner.
cockroach asked, hi should i dael in call and put options now
Sailesh answers, hi, futures and options are hedging tools for fund managers to protect their portfolio form adverse movement in prices of underlying securities. Futures and options are not for retail investors. My advise to you would be stay away from options. Be a long term investor. It will pay you more than what you earn in options.
krish asked, Hi Sailesh, I want to invest in SIP of atleast 50,000 per month. Can you advise me on the best MFs to invest in SIP. Also, can i Invest in Gold ETF now.
Sailesh answers, hi, Gold has rallied in the past few days. It has already touched a life time high of Rs 19,000. Over the past few days there has been no negatve news from US or Europe and hence gold price has cooled off. Over the long term Gold is likely to do well. You should buy gold on every dip. Do not go overboard. An allocation of 10% to gold is ideal. As regards SIP and the fund names, I have given the names in an answer to a similar question in this chat
India asked, Hi, FD in Post office is better OR State Bank....??? Plz advise...
Sailesh answers, hi, FDs in Post office fetch you a slightly higer rate of interest compared to FD from SBI. This is because post office FDs are considered as small savings schemes and are not market linked. they are currently higher than the equivalent FD rates offered by and bank. SBI FDs are subject to movement of interest rates and hence keep changing from time to time.
w asked, Hi Shailesh, I am investing Rs 2000 pm in the DSP Blackrock World gold fund from last 1 year. is that a good option in the long term ? pls advice.
Sailesh answers, hi, DSP BR World Gold funds invests in equity shares of gold mining companies. the fund does not invest directly into gold. since there is demand for gold and gold supply always remains short of demand, the share price of these companies tends to go up in line with their earnings. This fund will not perform exactly like the performance of gold. If you are looking at exposure to gold and make profit from movement in gold price. then sell this fund and reinvest in Gold ETF like Benchmark Gold ETF.
RAJAN asked, iam planning to invest 5000 rupees in SIP , my insurance agent advises to go for ULip plan which one would you advise
Sailesh answers, hi, through your question I would like to advise all the investors not to consider investments in ULIPs at all. If your objective is investment to grow your money then equity funds are the best option. IF you are only looking at insurance then Term plans are the best. But no ULIP in any form.
vinayrao asked, what are ur views on fidelity india value fund / should in start monthly sip
Sailesh answers, hi, this fund is a value fund and among the few value funds in the country. Fidelity has an excellent track record to spot undervalued stocks. I would recommend that you invest in this fund. But be patient while you are invested in this fund. This fund is not for investors looking at chasing momentum. Its for seriously long term investors who are willin to remain invested for 10-15 years.
anand_1980 asked, Hi..I am 30 and invest amounts thru SIP mode in Sundaram midcap, SMILE, Birla frontline, midcap, SBI tax gain, global, taurus infrastructure, DSP TIGER, sundaram select focus, birla tax relief,reliance nri equity, advantage, sundaram capex,principal large cap, hsbc equity...I know I have a huge list of funds. Do you recommend pruning this portfolio? do i exit any of the funds?
Sailesh answers, hi, you definitely need to prune the portfolio. Get rid of sectoral and thematic funds like infrastructure funds, Sundram capex, reliance NRI Equity and sundram SMILE.
rekha asked, Hi, I want to start SIP from next month.. is DSP Blackrock a good option? which fund? i am looking for balanced fund
Sailesh answers, hi, yes DSP BR balanced fund is a good fund to start an SIP in.
ranjita asked, I have 2.5lack in my saving a/c and I want invest this amount for 5yrs.Can I invest at one go in MIP.Can I withdraw from MIP when I got better opportunity.I feel a big correction in the market.
Sailesh answers, hi, investmnent in MIP for 5 years is a good idea but at the same time also a very conservative approach. MIPs have an exit load of 1% if redeemed within 1 year of investment. Hence, it would not be an ideal investment to park your money while waiting for a steep correction to swichver to equity funds.
ash asked, Had invested 1 lac in BNP Pariba Energy opportunity fund NFO in 2008. Current NAV is Rs.8. Should remain invested or withdraw and deploy funds in some other fund. Pls advise
Sailesh answers, hi, redeem this fund and invest in HDFC Top 200 fund.
Shals asked, HI, I have SIP of 2000 each in HDFC top200(G) and Brila Frontline Eauity (G). I want to invest 4-5K per month or 50K at once go. I am 31year old, Please suggest which would be best startegy and where to invest. I am a long term investor. Pls reply
Sailesh answers, hi, for your monthly investment of 4-5k you can considr starting an SIP. For your lumsum investment you can divide the amount into 2 parts. 50% you can invest immediately. The balance 50% can be invest say when the markets fall by 5%.
salman 1 asked, Is doing sips in mutual funds the smart way to beat the markets & would also lyk your view on Hdfc top 200 & Reliance growth fund from a 5 year perspective
Sailesh answers, hi, SIPs is of the best strategies to build wealth over the long term. It builds a sense of discipline in the investor. It also does away with he botheration of timing the market. More often than not people do not invest when the markets are at their lows. Hence, SIP can take care of that. HDFC Top 200 and Reliance Growth Fund are among the well managed funds.
Arunkumar asked, With fluctuating interest rates, is it good to invest (SIP mode, monthly Rs.1000 for 12 months) in HDFC Long Term MIP?
Sailesh answers, hi, investing in MIP though SIP may not make sense. HDFC MIP - Long Term has 75% exposur to equity and balance to debt. Hence, the NAV does not fluctuate like a equity fund. If you have a lumsum to invest in MIP, you can go ahead and invest.
DiyaR asked, I have liquid cash of 10lakhs, Apart from this, I have a MF portfolio of 13 lakhs. Please let me know how best to invest the 10 lakhs. Gold/silver/shares/property ?
Sailesh answers, hi, you havent given your investment horizon and risk appetie. Hence, I cant give you a precise asset allocation for Rs 10 lakhs. I can only say at the moment invest more in equity followed by gold.
vijay12 asked, Hi sailesh, am an NRI and am into IT proffession, as you knw we dont have any pension schemes here. am 34 now and planning to retire by 55. i can save upto 5000 Rs a month. what is the best way to plan for my pension. thank you
Sailesh answers, hi, the answer to your question lies in getting a retirement plan made for yourself. I would advise you to write to me separately with more details at sailesh.multani@rediffmail.com
ramchandra asked, Hello , My investments in Nov 2007 went terribly wrong I invested Rs 10000 in JM Agri Infra fund , 25000 Sunderam energy Opportunity , 300000 in JM Basic ,10000 in ING Optimix , 30000 in Tata Indo global . All these schemes were suggested as good funds by my friendly bank ING Vysya . Now some of these funds have eroded to the extent of 85% as they are closed ended I have no option but to wait. In the meantime I did my own R&D and started a SIP in May 2009 4000 in HDFC top 200 , 1500 in UTI Oppurtunities fund and lately in ICICI discovery 2000 all monthly. My investment period is close to 20 years horizon . Am I doing the right thing , I wish to withdraw my SIP from UTI opportunities and invest SIP in Reliance Opportunities , also wish to start 1500 SIP monthly in Religare Contra. Please advice as I have run out of ideas
Sailesh answers, hi, you should redeem all the investments in JM schemes as and when they open for repurchase. Also redeem UTI Opportunities and Reliance Opportunities. I will not at all recommend Religare Contra Fund. Invest in time tested funds like HDFc Top 200, DSP BR Equity and Fidelity Equity Fund. I am sure that you will have no reason to get disappointed in future. Having sadi tha please do review your portfolio from time to time. Also time to change your advisor!
Arunachalam asked, Hi, I want to take retirement plan, which on e will be best to choose?
Sailesh answers, hi, there is no standard retirement fund or plan. Every reitrment plan is different based on the individual's present age, retirement age, life expectancy,standard of living and spending pattern. the best thing to do is to get a retirment plan made for yourself with the help of a financial planner.
DEEEEPZ asked, Hey Sailesh, Where is stock market heading in near future ? Sensex at 21K seems to be difficult in next 2 years ? what you think?
Sailesh answers, hi, I am of the view that one should have a reasonable expectation from equity markets when it comes to returns. An average return of 12-15% p.a. over 15-20 years is considered good enough. If you are able to meet the same then you have achived the goal. Dont get botheed about where the sensex will be. Sensex may reach 21000 in next 2 years but you may miss your goal by being in the wrong stock or fund. Hence, focus more on the stock or fund rather than the sensex.
Sailesh says, We have run completely out of time. I thank you all for participating in this chat session. If you have any questions which were not answered during the chat, you can mail them to me at: sailesh.multani@rediffmail.com.
