Are you bad at managing your own money? Do numerous investment options baffle you? What are the best mutual funds available? Which funds accrue maximum profits? In an hour-long chat on rediff.com on Thursday, Rahul Goel, CEO, Personalfn.com, and financial planning expert, answered many such queries. Here is the transcript:

Rahul Goel says, Good afternoon all! Let's get started on the financial planning queries!

Goyal asked, Hi Rahul, I have the following Investments 1. SIP of 2000 for DSPML TIGER 2. SIP of 1000 each in SBI [Get Quote] TaxGain and HDFC [Get Quote] Tax Saver 3. SIP of 100 each in Reliance [Get Quote] Growth and ICICI [Get Quote] Prudential Dynamic Plan 4. 20000 each in SBI Infra and HDFC MidCap Do you think it is diversified enough. Also, I want to invest 5000 more each month. Please tell me good SIPs
Rahul Goel answers,  at 2007-08-09 12:55:04hi. it is surprising that even though you have several funds in your portfolio, you do not have a single diversified equity funds! at personalfn we recommend that an investor avoid investing in sector funds (in most instances). in fact recently we have posted some research on our website - www.personalfn.com - which you may want to read. i recommend that you consider restructuring your portfolio to include more diversified funds. target having about 6 funds in total.

sam asked, What is better: term of endowment plan in Life insurance. and a word about market linked plans in life insurance
Rahul Goel answers, sam, hi. in almost all cases term insurance should get preference over endowment plans. market linked insurance is effectively a ulip. you should consider investing in the same only when you have take term insurance and also invested in assets like stocks (via mutual funds), deposits etc.

Asheesh asked, Is it better to go for PMS services of a broker like Indiainfoline, Sharekhan etc or choosen MF schemes considering the investment amount to be 5 Lacs
Rahul Goel answers, asheesh, hi. without commenting on any of the companies you have named, at Personalfn we find that most investors would be better off investing in mutual funds.

Ravi asked, Hi Rahul, I am using MF for long-term wealth creation & 80C benifits. Myself and my wife aged 25 are doing SIP in Fidelity Tax Advantage (2,500/-), HDFC Tax Saver(1,500/-), HDFC LTA (1,000/-), SBI Magnum Tax Gain(2,000/-) and Principal Tax savings(1,000/-) per month from last 3 months. PPF contribution of 48,000/- PA and tax saving FD of 36,000/-. Can you please review the same and give your opinion...? Thank you.
Rahul Goel answers, ravi, hi. it is difficult for me to review this as there is limited information that is available. however if you are investing for the long term, and have an appetite for risk, i would recommend that you invest more in risk assets (eq funds). PPF, though traditionally a very popular investment avenue has a drawback - the interest rate on the same is reset every year. and with the tax environment changing, it is unlikely that there will be no tax implications on such investments.

ravimittal asked, Dear Sir, In personal fmu ppl usually rate SBI as low in MUtusl fund. If i visit Moneycontrol then SBI Magnum contra they rate as 5star. So u think that i can be in this MF for long term.. I mean 10-15 years?
Rahul Goel answers, ravi, hi. yes, at personalfn we tend not to recommend most of the sbi schemes. when evaluating schemes we keenly look at many factors of which historical performance is just one. so a scheme may score well on this, but may falter on other parameters. we recommend that you avoid investing in any scheme just because the last 5-yr return is attractive; remember the last 5 yrs have been good years for the stock market... and anyone who took risk made money.

Padma asked, Hi Rahul , could u pls suggest some short term MF ..say 6months.
Rahul Goel answers, padma, hi. if you wish to invest for six months, go in for fixed maturity plans. or in case you need liquidity, go in for a liquid plus fund like hdfc cash management savings plus. pl ensure you opt for the div option to avoid capital gain tax implications.

ravimittal asked, Can u suggest few MF which i can invest in for my corpus build up for 20 years and so..
Rahul Goel answers, ravi, hi. go in for diversified equity funds like hdfc equity and fr flexicap. also, allocate about 5 - 10% to midcap funds... that is only if you wish to take high risk with the hope of earnign a high return.

sudhir asked, Hi Rahul, could u pls suggest some short term IPO's and shares for 6-8 months, which I want to invest atleast 20K
Rahul Goel answers, sudhir, hi. i am unable to guide you on this. we believe that one should invest in the stock markets with atleast a three year horizon.

naGesh asked, Rahul, i have a doubt regarding SIP way of investing in MFs and everymonth buying some units of the same fund whenever the market is low. does both are same or do i save some charges if i opt for the SIP.
Rahul Goel answers, nagesh, hi. generally the entry load for sips and one time investing is the same. however, to be able to time the market consistently is going to be a challege. consider going in for an SIP instead.

Bhanu asked, Hi Rahul.. I have a question on FP.Yes we all agree to do a regular investment in any scheme.But is it necessary to have an SIP because it may happen that perticular Fund does good work in specific time. So would it be better if i do invest regularly but wisely every month.Say 10000 permonth in nay of the fund which is doing well then instead of starting a SIP of 10000 or 2 of 5000..
Rahul Goel answers, bhanu, hi. whether you do an sip or invest regularly the fact that you need to review the scheme you are invested in does not change. and an sip can be stopped whenever you feel something has gone wrong. however, your financial planner should help you select schemes that have a high probability on delivering on their objective.

earthsign_v asked, Dear Mr. Goel, I am a NRI with a take home annual salary of 24 lacs.I do not have any other commitments and all the cash is available after my monthly expenses. I wish to buy a flat and then invest in MF/Insurance etc.I have zeor knowledge on insurance and MFs. Please advise the correct portfolio - Thanks and regards
Rahul Goel answers, hi. to start with, when evaluating insurance take only term insurance - the pure risk cover. whoever advises you, will try his/her best to push a ulip, but don't budge. post your investment in property, the surplus, if it can be invested for a period of over 3 yrs, should go into a portfolio of carefully selected equity funds (assuming you do not have a skill to buy shares directly). plan to have no more than 6 schemes in your portfolio - avoid NFOs at all costs. you may choose to invest a small portion of the monies in debt instruments if attractive opportunities are available.

kirit asked, i am a nri. and would like to invest 50000 every month in a dollar based mutual fund. o habe franklin blue chip, anything else?
Rahul Goel answers, kirit, hi. fr bluechip is not a dollar based fund. i recommend that you identify the reason you wish to invest. if you are keen to invest in risky assets for a tenure in excess of 3 - 5 yrs, then consider investing a portion of your equity money in india. and since you are abroad, opt for well managed mutual funds like hdfc equity. also, if you are based in the US you cannot invest in templeton/fidelity funds among a couple of others.

Suchit asked, Hi rahul, at present i can invest Rs. 2000 per month. Canu tell me any scheme?
Rahul Goel answers, suchit, hi. you should opt for schemes like hdfc equity and fr flexicap. maybe you can also have fidelity equity in your portfolio. as your contributions increase, plan to have a maximum of six schemes.

sgururaj asked, Which option(dividend,dividend reinvestment, growth) you would suggest for 1. equity schemes(equity>65%). 2. debt schemes(equity < 65%) assuming that holding period is > 1yr. If the hoding period < 1yr which option
Rahul Goel answers, with regards to equity schemes where you are not in need of liquidity, opt for the growth option. in case of debt funds, it may help to be in the dividend option as you then save on the short term capital gains tax which is equal to your marginal rate of tax. the answer in this case will depend on your marinal rate of income tax.

Padma asked, Hi rahul , Kindly give me a portfolio to invest 10000 in MF sip's.. i am investing 2500 in tax funds as sip
Rahul Goel answers, padma, hi. you can consider investing in - hdfc equity, fr flexicap, fidelity eq, dsp ml eq in equal proportions. if you would have met us in person we could have fine tuned the allocation between the schemes to suit you better.

ravin asked, at this point when the market is blossoming like never before, why should one invest in MFs, (if u leave aside the risk factor as presently there seems to be lil risk in markets if u see long term)
Rahul Goel answers, well, just when everything seems very predictable, the stock markets give a nasty jolt... like the previous week. while we have no view on the short term prospects of the stock markets, we believe that the long term prospects are attractive. however, we would not recommend anyone who is not skilled adequately to invest directly into stocks. in most cases, as per our experience, mutual funds are better suited to investors.

swami asked, Hi Rahul,In ElSS catagory, where would you rank Fidelity Tax Advantage fund and do you think it would be wise to invest money here!
Rahul Goel answers, swami, hi. its a scheme from a well managed process driven amc. so no issues there. but do not put all the money in one scheme. add either fr taxshield or hdfc long term adv.

Ankur asked, Hi Rahul, I plan to invest in SBI tax Gain and Kotak Tax Saver and PNB Principal Personal Tax SAver. Do you think its a right decision and a right mix
Rahul Goel answers, ankur, hi. as may be apparent from the earlier reply, our prefernces for tax planning schemes does not overlap at all with what you have suggested.

Rajiv asked, I have to invest Rs. 1.0 lac and I want to invest in short terms which also give me benefit in Tax. Can u please suggest me something other then mutual funds
Rahul Goel answers, rajiv, hi. i am not able to guide you with this. instruments which give sec 80 c benefit usually have a lock in for atleast 3 yrs.

amns asked, I needs a Good Financial Planner can you help me in any manner???
Rahul Goel answers, ofcourse we can! write in to us at info@personalfn.com with your complete contact details and a Personalfn consultant will be in touch with you.

Ajay asked, Hi I have more than 2 lakh ammount in my bank. I dont know where and how to invest that amount so that i can use it whenever i have decided to buy a Flat..i am not sure when i will be able to buy a flat...can you suggest me .. which is a better way to invest that amount so that i will get good Rate of Interest ..
Rahul Goel answers, ajay, hi. the better option is to put the money in a liquid plus fund like hdfc cash management sav plu - div option. you will get better tax 0adjusted returns and also will not lose out on liquidity.

ravid asked, Hi Rahul, I have invested in SBI blue chip, Birla infrastructure and HSBC mutual fund last year (May-06), so what I should do now, can I keep invested, please advise me.
Rahul Goel answers, hi, like i mentioned in an earlier reply, we are not keen that investors put money in sector funds. pl do visit personalfn.com where recently we have put out some research on these funds. with regards to sbi blue chip, again the performance has not matched upto expectations. we recently wrote a note on this scheme too. pl read.

Kumar asked, I am investing in Franklin Templeton Equity India Income Fund (Growth Option) through SIP, is that good to continue or should i divert my SIP to any other funds
Rahul Goel answers, kumar, hi. to be able to guide you on this i will need to know why you invested in this in the first place. this scheme will appeal to few investors who wish to invest a portio of their monies in the international markets. but this should be evaluated once your domestic investments are on track.

sandeep asked, Hi Rahul, can you please tell if how reliable are mutual fund companies? I am not asking about NAV variation due to market performance.. But is there any guarantee that they wont close on a fine day and escape with our money? Is there any govt law to protect investors in this regard?
Rahul Goel answers, sandeep, hi. there are enough safeguards to prevent this from happening. however, one should take precaution and invest only with those amcs which have credible managements / promoters.

ameet asked, Hi rahul 1. Regarding ULIPS and mutual funds, there are two views. One view advises against ulips and to keep investment and insurence seperate due to lower allocation amount in ulips (go for term insurence and invest the balance in pure mutual fund. Other view says returns from ulips are more than mutual funds for a long term say 15 - 20 years as lock in period gives freedom to fund manager to plan long term without fear of redemption. What is your recommendation I have investment in mutual fund. I am considering, ULIPS of HDFC, ICICI and Baja Allianz. 2. I have invested in mutual funds for the last three years and the same are giving good returns. I am not in need of money now. Should I book profit now or continue? Do you recommend long term investment 15 - 20 years in same fund if they continue giving good returns looking at India growth Story or should one book profit from time to time? tr
Rahul Goel answers, ameet, hi. there are several questions here. lets take the first. i would recommend you keep insurance and investment separate. the reason ulips tend to perform better over 15 yrs is usually because of the assumption that mutual funds will continue to have high expense ratios. we do not concur with this view. regarding your second question - if you do not need the money for another three years, you may not want to book profits. finally, if you have well managed schemes in the portfolio, churn may not help. it will only add to costs and suppress overall returns!

chetan asked, Hi Rahul, I want to start investing now, i am 26yrs and want to plan for retirement and my child education...My son is 2yrs... I am planning to invest 2lakhs per year for meeting both my plans... how should i go with my financial plan.. I have surplus for Insurance/health, so 2lakhs is totally set aside for investment... Please answer
Rahul Goel answers, chetan, hi. its great that you wish to start early! broadly, take term insurance for yourself and mediclaim for your family. the rest of the money should go into pure investment avenues - ulips is not a pure investment avenue.

user asked, What is the best route for NRI to get into Indian mutual funds? Given that I am 27, what kind of asset allocation would you recommend?
Rahul Goel answers, hi. assuming you have risk appetite, select about six diverified equity schemes and put money into them at regular intervals. be very careful when it comes to scheme selection.

choudharymanoj17 asked, hi rahul pls tell me which nfo is best now which r in the market now, like hsbc or kotak emerging market fund or jm financial pls tell me
Rahul Goel answers, hi. at Personalfn we are convinced that most nfos are simply mrketing gimmicks. few of them offer value to investors. presently we are not recommending any nfo to our clients.

HItesh asked, hello rahul..I m having regular SIP in Frankline FLEXICAP of Rs 2000 which does not work properly ? should i quit it and opt other option
Rahul Goel answers, hitesh, hi. fr flexicap is a very good scheme and in our view should deliver over the long term. but you surely should not have all your money in one scheme.

vaekbote asked, Hi, My daughter is one year old, I have taken tradition LIC [Get Quote] of 6.5 lac coverage & no term insurance,Kindly suggest what is best way to start?
Rahul Goel answers, the best way to start would have been to take term insurance for yourself and invest in avenues like equity mutual funds for your daughter. also, you can consider putting some money in avenues like PPF.

Hema asked, Hello Mr.Goel, I am pretty new to MF. Have made an recent investment in SBI Infrastructure fund (Growth) for Rs.5000. Its a close ended fund. The current NAV is 10.26. When can i expect it to grow?
Rahul Goel answers, hema, hi. i urge you to read our recent research notes on sector funds posted on www.personalfn.com. i am sure it will be an eye opener for you!

sas asked, am a cosultant. I want to invest a,d save for the future. I have ppf and 2 ulips. Please advise
Rahul Goel answers, well, if you wish to invest for the future, and that future is effectively long term, then you may want to add equity funds to your portfolio. the ulips will weigh down on overall returns in the near term, but over 10 - 12 years will contribute in line with an equally well managed mutual fund.

rutu asked, Hi Rahul... Please tell me.. money left after home EMI and monthly expenses is 25000 to save.. how can i plan for short term and long term distribution. We do hav a LIC prem worth 70000 yearly and some ppf savings.. but no MF savings as yet..
Rahul Goel answers, hi, if you have long term needs, its time you took some risk with your money. i do not mean that you speculate.. but you invest smartly so over the long term your assets can earn about 15% pa. ppf is presently yielding 8% pa. one obvious solution is to start your sips in well managed equity funds.

chirag asked, which is the best ELSS Scheme in current market situation for long term investment purpose
Rahul Goel answers, chirag, hi. consider funds like fr taxshield and hdfc long term adv.

sayanta asked, Hi Rahul.I am totaly new in this area and i dont have anyone with whom i can consult. I want to invest monthly 4k-5k in tax saving mutual fund.Please suggest me 2-3 fund for tax saving as well as good return.I want to invest for 6 years. some 10000 i want to invest for non tax saving and for one year only.Please suggest me also that which 2-3 fund i should go for this. Please suggest me some name and help me out. Thanks.
Rahul Goel answers, sayanta, hi. in my previous reply i have suggested the tax saving funds. for your other portfolio, consider funds like hdfc equity and fr flexicap. but maybe you can invest time and identify an honest finanical planner for yourself who will do all the worrying on your behalf!

Pratyush asked, I want to know two things, one how to go about investing in MFs and what is the best option. I can set aside Rs.2000/- for this purpose every month. Second, is there some investment option which gives me a monthly return
Rahul Goel answers, hi. because you have a monthly surplus, best is to go in for SIPs. if you are looking for assured monthly returns consider deposits with post office and institutions like hdfc. but if you can take some risk here, opt for monthly income plans from mutual funds - however, in our view ,you should not opt for monthly income! go in for the qtr div option.

Hema asked, Hello, Is it a good idea to pick up units of sundaram BNP paribas capex growth fund.Current purchase price is Rs.19.27..? Or is there a any other good fund that i can try with minimum investment?
Rahul Goel answers, hema, hi. like i said, before committing monies to sectoral funds study them well. read our research!

b asked, please sugeest some good short-term debt funds where i should not loose on entry / exit load
Rahul Goel answers, hi. short term debt funds, usually do not have entry or exit loads. you will need to clarify it for the scheme you are investing in at the time of executing the transaction.

Sajiv asked, What are the better investment options that can be done in the name of New Borns which will help them financially in their future. I am looking at Long Term Investments
Rahul Goel answers, sanjiv, hi. you will need to have a portfolio of assets. in all probability, equity mutual funds will comprise the largest share of this portfolio.

aman asked, hi rahul, please tell us about MIP funds.
Rahul Goel answers, aman, hi. mips are very good schemes but are usually mis-sold. if you can take some risk to earn returns better than say an FD, then mips can be considered.

pankaj asked, how much of my monthly income should go in equities . i am 34 . earning 3lac p.m.
Rahul Goel answers, pankaj, hi. if you are saving for retirement, then the largest chunk should go into equities / equity funds.

sasank asked, Between Large Cap and Index fund which one is better?
Rahul Goel answers, sasank, hi. i recommend you consider going in for an actively managed diversified equity fund. that will be a much better option.

Rajan asked, Hi Rahul... Which is the better bet- UTI Infrastructure fund or ICICI Pru Infrastructure Fund. Also, What are your views on Reliance Media and Entertainment Fund.
Rahul Goel answers, rajan, hi. our view on sector funds is simple - avoid them. if you must own them, then ensure they do not comprise more than 10% of your equity portfolio.

shahrukh asked, hi ! rahul, It is confusing that all fp says insurance onlt term & rest mf for invst planning
Rahul Goel answers, a correction here. its not only mf for invstment planning. it could be gold, real estate, debt, govt sav scheme etc etc and also mutual funds.

Punith asked, Hi Rahul, What's your advice to investors about the NFOs - HSBC Dynamic fund, DBS and Escorts Infrastructure, DSP-ML gold fund ?
Rahul Goel answers, punith, hi. we have recommended to all our clients at personalfn that they avoid inevsting in these funds.

BALAJI asked, Hi Rahul, Good Evening I am a fince executive in a company. I have impressed with stock markets and started trading through online account about 18 monhts ago with an intention to make some money. Contrary, I have made a loss about Rs. 3.20 lacs in the last financial year and left the stock market. How to start with small investment and recover some of the losses
Rahul Goel answers, balaji, hi. try not to make good the loss. you made a mistake, own up to it and move ahead. start afresh by investing in line with your needs; get yourself an honest financial planner.

sanjay asked, Hi rahul, i have a sip ending in SBI emerging business. Do i contunie in this or cahnge it to HDFC Equity.
Rahul Goel answers, sanjay, hi. at personalfn we prefer diversfied equity funds over thematic/sector funds.

kamakshi asked, Hi, I am 28 years old and would like to invest in M/F to clock a better return. What kind of funds could suit to my profile. I can take risk and expecting a good return after 6 to 7 years.
Rahul Goel answers, kamakshi, hi. go in for well managed diversified equity funds. your financial planner should help you select these schemes. be cautoous of agents who will get you to invest in nfos etc and then make you churn.

kamakshi asked, What is your view on the market. Everyone says it will reach 18000 benchmark by the end of this year? what is your view on this?
Rahul Goel answers, hi. at personalfn we disregard the index number; it means little to us as it is representative of just 30 stocks. and even within that, it is drive by just about 5 large companies. we urge our clients to aim to achieve their onjective which could be planning for retirement, child education etc etc. what the index does has little implication for our financial plans. i suggest you too not attach much importance to it from the perspective of planning your long term investments.

Rahul Goel says, Thank you all for participating in this discussion. See you next week!

Chat with Rahul every week! To read more transcripts, click here!

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