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?
Financial planning expert Sailesh Multani offered some valuable tips. Here is the transcript:
Sailesh says, Hi, good evening and welcome to this chat session
AMNS asked, I am 42 and i want to Allocate my Asset can you guide me in percentage terms what should be my Asset Allocation
Sailesh answers, at 2010-12-30 16:02:24Hi, the answer to your question lies in your investment objective,risk appetite and investment horizon. To start with you can use the thum rule : 100 minus your age should be invested into equity. the balance can be invested in to gold and debt. Ideally gold should be 10% of your portfolio. In your case you can invest 55% in equity, 35% in debt and 10% in gold. Please bear in mind that this is just a starting point. An individual's investment horizon matters a lot in deciding the asset allocation. If you are 1 or 2 years away from the goal, then it makes sens to have everything in debt.
sulabh asked, Hi sailesh I invest montly through SIP in HDFCtop200(2000rs)and in ICICI discovery fund(1000) shall I continue with it ?
Sailesh answers, hi, you can continue with these funds. Both the funds have a consistent track record.
Venkatesh asked, Hi I have some scrips form 2-3 years like TCS, ONGC, NTPC, PNB approximate 1Lakh INT tell me how can i do more I am not a regular trader How can I multiply my Money
Sailesh answers, hi, all the scrips are top of the line. you should hold it for long term if you want to reap the benefit of equity investment. Long term means five years and more.
penchem asked, pls suggest some MFs where i can invest Rs.10 k per moth thro SIP.I may feel happy it fetch 15 to 20% annual return.
Sailesh answers, hi, my favourite picks in the equity fund category are: HDFC Top 200, Fidelity Equity and DSP BR Equity
anand asked, I am 59 yrs and want to invest very carefully my post retirement fund to get monthly income. what are the best and safe avanues ?
Sailesh answers, hi, if you can wait for a year or so, till you turn 60, you can invest in 9% Senior Citizen Savings Scheme. you can invest upto Rs 15 lakhs in this scheme. Interest is payable quartely. You can also invest in 22 months FD offered by HDFC Ltd that pays 8.80% p.a. Post office monthly income scheme (POMIS) is another scheme where you can invest a maximum of 9 lakhs
Shri asked, Hi,I want to invest 5 lacs for 3 yrs,I can take calculated risk.So what will be best options?which sector mutual funds?
Sailesh answers, hi, the best investment option for 3 years is a combination of balanced funds and MIPs. You can equal amounts in each of these funds. I personally like HDFc Prudence in the balanced Fund category and HDFC MIP - Long Term in the MIP category.
SK asked, What is the ideal return expectation from a mutual fund?
Sailesh answers, hi, if its equity funds then 12-15% p.a. If its debt fund then 7-8% in the current scenario.
Debojyoti asked, Hi, good evening..I am getting marry in June 2011 how can I invest Rs10,000/- to get maximum profit before June ..pls advise
Sailesh answers, hi, first of all Congratulations! Your aim should be capital preservation and not profit maximisation since your goal is 6 months away. Therefore, invest your marriage corpus in a 6 month bank FD
Mohit asked, Hi ! I am 30 yrs old employed in a Pvt sector. My rish apetite is moderate to high. I wish to invest Rs 4 lacs for my 2 yrs old future. My investment horizon is 8-10 yrs. Pls suggest few large cap and mid cap MF .
Sailesh answers, hi, you can invest in diversified equity funds for your two year old's future expenditure on education and marriage. You can invest in the same funds I suggeted at the start of the chat
kaprabha asked, hello sir, which is a best MF in small & mid cap ? how can invest in silver?
Sailesh answers, hi, you can invest in DSP BR Micro Cap Fund or Sundram SMILE fund. Pls note that your allocation to these funds should not be more than 5% of your total equity portfolio. Regarding Silver, you can either buy in physical form or trade in futures on the commodity exchange.
ShashankM asked, Hi Shailesh, What is the best option of investment for begineer like me? Please suggest.
Sailesh answers, hi, the best option for someone who is a beginner is to start small. Invest 50% in equity, 40% in debt and 10% in gold. As far as equity is concerned, invest in diversified equity funds. For debt you can consider Bank Fd and Gold ETF for gold.
gits asked, Pls can you tell me is investing in ELSS is better or NSC...if ELSS then which one is the better option???
Sailesh answers, hi, ELSS fund gives you the opportunity to invest in equity and save tax at the same time. NSC is a debt product that also gives you an option to save tax. Ideally you should invest in both. Compared to NSC I would invest in PPF as the interest on NSC is taxable while that on PPF is tax free. The only drawback of PPf is that it has an maturity period of 15 years while that of NSC is 6 years
Amey asked, What's your view on real estate funds? Are they better than investing in actual real estate?
Sailesh answers, hi, yes its better to invest in a real estate fund rather than investing directly. Real Estate funds or REITs as they are commonly known, allows retail investor also to participate in real estate. Also, the risk is reduced over a basket of properties. Unfortunately in India, MFs are still not allowed to launch real estate funds. the guidelines are still not in place. However, few corporate houses have launched these producats. these are not governed by SEBI
joe asked, hi, i am 27 and have SIPs in HDFC ELSS and DSP BR(G). I also have PPF. Would you be able to advise other tax saving or investment options?
Sailesh answers, hi, besides ELSS and PPF you can take a term plan to protect your life.the premium paid for term insurance qualifies for deduction under section 80C.
Niks asked, Hi Mr. Sailesh, I am 30, have enough insurance cover, my monthly expenses are 15000 (excluding loans). I want to plan for my monthly pension, it should start after age of 55, how much and where should I invest per month, most important, the returns should beat inflation. Please guide me.
Sailesh answers, hi, how much should you invest per month and in which investment instruments is a function of the reitrement corpus you want to build by the time you retire. The answer to this question lies in getting a retirement plan made for yourself with the help of a financial planner who is honest and competent.
bijay asked, I want to invest in F&O - Option (put & call). Please advise.
Sailesh answers, hi,I would not advise any investor to take the Futures and Option (F&O) route to make money. This route according to me will ultimately lead to losses. So avoid the tendency to take short cuts in making money. If you really want to build wealth through equity, you should invest in diversified equity fund with a time horizon of five years and more.
DILIP asked, I HAVE SIP RELIANCE VISION(2000), RELIANCE DIVERSIFIED POWER(1000), HDFC GROWTH(2000), HDFC TOP200(2000), JP IMERGING LEADER(2000), JP MID CAP(1000), DSP TIGER(1000) I WANT TO INVEST 4000 MORE, WHERE SHOULD I INVEST
Sailesh answers, hi, first of all exit all Reliance and JM funds. You can add the three funds mentioned at the start of my chat.
investor asked, My monthly Mutual fund SIP portfolio allocation for 2011 year is HDFC top 200(g): 12000, ICICI Pru discovery Fund (g) - 5000, FIdelity equity(g):3500, DSP blackrock Microcap (g)- 2000,idfc premier equity (a) - 2500, HDFC midcap opps - 2000,HDFC Prudence Fund(g) - 3000.TOTAL: 30,000 Rs. Are the funds chosen and proportions good or should I reallocate? My Investment Horizon is 1.5 - 3 years
Sailesh answers, hi, you have all good quality funds in your portfolio but a lot of small and midcap funds. Your portfolio will be very volatile. I would suggest that as and when you make money in small/midcap funds, book your profit and invest in debt or gold. Dont hang on to the profits for long.
Abhinav asked, Hello Sir, I am 26 yrs, single. I haven't taken any policies and not invested anything anywhere. Now as its a financial year ending and time for an investment. Can you please tell me in which field/policy should I invest? I need to invest somewhat around 80k. I have discussed with my friends they said first go for endowment plans & ppf, then infrastructure bonds, then mutual funds... you opinion will
be helpful for me. Thanks.
Sailesh answers, hi, its time that you got serious about your invetments and financial goals. Year end tax planning exercise should not be the beginning and end of it. Yes, you should invest to save your taxes. But tax planning should form a part of your overall investment plan that is aimed at meeting your financial goals like retirement, buying a property, buy a car, etc. To save your taxes, you need to invest 1/3 in ELSS, 1/3 in PPF and the balance 1/3 should be towards the premium paid for Term plan to protect your life.
aaa asked, I have an ULIP in MaxNewyork life insurance,"Life Maker Investment Plan" from past 4+ years, today the NAV is Rs 31, My monthly premium is Rs 1500, Is it good to continue this ulip, since untill now the NAV value is less than the amount I ahve invested now, I really hope that you help me Sailesh, please
Sailesh answers, hi, ULIPs are the most expensive investment cum insurance product. One should never buy a ULIP. since you have bought the same, I would recommend you to continue paying your premium. According to me ULIPs take 7-8 years to make some serious kind of money for investors. So hang on untill you make some money on your ULIP. Please dont buy and ULIP even if your friend or any relative sells you.
Shrenik asked, My daughter is 4 year old and she have 1 lac rupee, where should i invest for her?
Sailesh answers, hi, there are 2 major epxnditure that you will incur in the future - daughter's education and marriage. To begin with I would advise you to invest 80% into well managed diversified equity funds. The balanced 20% can be invested in gold.
Darshan asked, what about the lic housing and axis bank to invest purpose
Sailesh answers, hi, cant comment on LIC Housing, I would not invest in this company on account of corporate governance issue. AXIS Bank is a good bank to invest in .
Ravikumar asked, i plan to make investments to the tune of around Rs.2 lakhs in scrips. Which portfolio would you suggest for short term gains? Any IPO's in the near future recommended?
Sailesh answers, hi, I would not encourage you to invest in stocks with a short term view. Ideally your investment horizon should be 5 years and more. Also, dont wait for IPOs. There are lot of good stocks you can buy from the secondary market at any given point of time. Dont fall for IPOs. Not all of them make a 40-50% listing gains.
mojo asked, Hi - I am 41 and I am trying to build a good corpus for my daughter (aged 3) and am looking at a 14 - 15 year investment timeframe : I have opened SIP in HDFC equity (30%), Fidelity growth (20%) , DSPBR Small and Mid cap (30%) and Reliance Power (20%) - . Pl. comment if the selection of the funds and the prospect.
Sailesh answers, hi, I like all the funds except Reliance Power Sector. Sector funds are not ideal for long term goals like children education, marriage. IF you want you can add Fidelity Equity Fund to your portfolio.
Shekar asked, Hi Is it good time to invest in gold ?
Sailesh answers, hi, yes its a good time to invest in gold. I recommend gold to all investors. Ideally you should have 10-15% allocation to gold in your portfolio. Start buying gold every month through the Gold ETF route. I dont recommend buying physical gold.
CGS asked, Could you please advice what will be the best investment for child policy, if its in MF can u please name few
Sailesh answers, hi, for meeting any financial goal - your retirement, children's education, children's marriage you need to invest in diversified equity funds. Never buy an insurance plan or child insurance policy to plan your future. Insurance should be only take by the parents to protect their life
oshkosh asked, Is this a good time to purchase a 1BHK in Mumbai. Is there a possibility of price reduction within the next 3-4 months
Sailesh answers, hi, in my view price correction in rela estate, espcially in city like Mumbai is inevitable. Interest rates on home loan are set to rise further. Housing will bcome even more expensive for needy buyers. Wait for 2-3 months. You can eepect prices to fall by 15-20%.
rajrawal asked, Sir, i have insurance approx 20 lacs. SIP( icici pru-1000/- hdfc top 200 1000/- DSP Gold mines 1000/- uti Ulip sip 1000/- and want further to invest Rs. 4000/- per month. Wheter i go for RD or SIP?
Sailesh answers, hi, you can start a Recurring deposit. Interest rates are high. So it makes sense to lock-in your rates now.
augustine asked, Hello Sir, I am 32 and have 4 sip HSBC Equity Growth monthly 1500Rs, Kotak 30 monthly 1500 & Reliance Diversified power sector fund monthly 2000Rs. I started this SIP from 1 years are they good fund or not please advice.
Sailesh answers, hi, redeem your entire portfolio. I would not recommend these funds to any investor. I would rather invest in the funds I recommended at the start of the chat. You can refer to those funds.
kunals asked, Hello Sir, I am 38 old, i have recently invested Rs. 2 Lakh in RIL (40%), BajajCorp(35%) , ITC (15%) and SCI (10%). I am new in Market . Please suggest about my Investment
Sailesh answers, hi, the stocks you have bought are of wel know companies with good investment potential. SInce you are new to equity investing, I would encourage to invest via the mutual fund route. first get used to the volatility in equity market and then start buying stocks directly.
nandini asked, Hi Sir, I am looking for a Term Plan Cover. Can you please suggest me some good plans. I have tried gathering some information about different companies but some have high premiums or low claim ratio. Also, is it advisable to take i-term instead of traditional term plan i.e. going through a agent. Would appreciate your help on this. FYI. I am a working individual, 26F
Sailesh answers, hi, you can take a term plan from any insurance company. But before you do that, look at the credibiltiy of the company from the point of view of settlement of claims. As far as insurance is concerned, Term plans are the best. you can safely ignore other form of insurance.
Mohunnraj asked, I have a ULIP (Bajaj Capital Unit Gain), as u said ULIP is not wise investment, but to hold long (7-8 yrs)to c some returns...but instead it wont b better to take the money and invest in some wise funds to get better returns than to wait for 7-8 yrs
Sailesh answers, hi, it will be a good idea only if you really want to book your lossses and pay the penalty for doing so.
Anandg asked, My age is 33. I have been investing in MF since 2005. I have invested in following funds so far. Please guide me if any of these funds i need to discontinue and swich to any other fund. More than half of my investment (15 lakhs) is in HDFC funds. Please let me know if relying on one fund house is ok? DSP BLACKROCK BALANCED FUND - GROWTH FRANKLIN TEMPLETON BLUECHIP FUND - GROWTH HDFC EQUITY FUND - GROWTH PLAN HDFC PRUDENCE FUND - GROWTH PLAN HDFC TOP 200 FUND - GROWTH PLAN KOTAK 30 EQUITY SCHEME - GROWTH RELIANCE GROWTH FUND - GROWTH PLAN SUNDARAM SELECT MIDCAP - GROWTH SBI MAGNUM BALANCED FUND - GROWTH
Sailesh answers, hi, except for Magnum Balanced Fund, all other funds are ok.
nits asked, sir.. while investing in Long term infra bonds there are two option one is buybak and other is no buyback .... when i am comparing both the option for cumlative ividend option ... difference in maturity value at the end of 10th year is only Rs 250 per bond ..... looking at liquidity prospective buybak option looks good but what i want to know that what will happen to interest rate after 5 years ? as credit policy tightening i may loose on reinvesting yeilds ... srom this point of view what you feel about the interest rate after 5-6 years ?
Sailesh answers, hi, if you take into account the tax saving then the yeilds come close to 11% p.a. In my view interest rates are unlikely to touch these levels in the next 5 years. If you have a view that interest rates will surpass these levels, then you can pay the tax and invest the sum in equity or balanced fund.
udayk1428@rediff.com asked, Hi Sir, This is Uday from Bangalore I have invested in ULIP's and under huge loss. I was advised by my relative to invest. I have invested 50000 (10000 * 5 = Annual). Now i the fund value as 22,800. Please let me know safe investment and I am not looking more than 8 to 10 % returns
Sailesh answers, hi, continue with your premiums till you make some money. You can surrender your policy once you have made the profits. I repeat that investors should not buy any ULIP from any insurance company even if it is sold by your friend or a relative.
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@gmail.com. Wishing you all a Very Happy, Healthy and a Prosperous New year! May you all make lots and lots of money in the year 2011!!
Are you always at a loss while planning your finances? Are you aware of the investment options available in the market?