Are you the one who doesn't understand mutual funds? Do numerous MF options baffle you? What are the best 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, Welcome all to the financial planning discussion. Let's get started!

wer asked, With the market crashing like hell, should one go for MFs now? If so, please suggest a few names.
Rahul Goel answers,  at 2007-08-16 13:00:22wer, hi. the stock markets by nature are volatile. so you should not be surprised on seeing these gyrations. what we are telling our clients at personalfn is that they should continue investing for their long term plans as usual (mostly via sips). this so becaused we remain convinced that from a 3-5 yr perspective investing in well managed equity funds still is an attractive proposition. however, those who are iquid should invest only part of their monies now. rest should be invested in small portions over the next several weeks. the idea is to avoid timing the bottom of the market.

ranjan asked, I am planning to invest in ICICI [Get Quote] infrastructure MF. Suggest me if it is better to invest in a sector specific fund than a diversified fund.
Rahul Goel answers, ranjan, hi. in our view it is always better to inevst in diversified funds as against sector funds. just to share with you, if you were to see the top losers over the last one month among equity funds, almost all those topping the list are sectoral/thematic funds. we recently posted a lot of research on sector funds on www.personalfn.com. you can please read the same.

Pradeep asked, Good Afternoon Sir, I have Reliance [Get Quote] Power Diversified, DSPML 100(D), HDFC [Get Quote] Equity, Reliance Equity, SBI [Get Quote] Taxgain, SBI Infrastructure. Please advise whethter to keep them or change with other MFs.
Rahul Goel answers, pradeep, hi. as i mentioned to ranjan, you should avoid sector funds. however, if you must invest, ensure your exposure is limited to no more than 5 - 10%.

amar asked, What future does Franklin Templeton flexi cap fund have?
Rahul Goel answers, amar, hi. franklin flexicap is one scheme personalfn tends to recommend to all its clients, who have a risk appetite and are investing for the long term. its a great scheme, which is managed by the two most experienced fund managers in india.

khalid asked, HI,I have Tata capital Builder could you please tell me what are the prospect for long term? As it has given me around 23% of return.
Rahul Goel answers, khalid, hi. the prospects of any mutual fund scheme which invests in equity are linked to the performance of the stock market. the trick here is to identify fund managers who will over time deliver your better returns at lower risk as compareed to other opportunities. you will need to evaluate the scheme you own from that perspective.

ranjan asked, i have one more question, which is better SIP investment, Reliance Growth or ICICI Dynamic. Give your views
Rahul Goel answers, ranjan, hi. whether a scheme is good for you or not will depend on what your needs and objectives are. reliance growth is a mid cap and therefore should suit those who can take on very high risk. icici dynamic of course is a fund whcih gave its fund manager a lot of flexibility in terms of moving monies from equity to debt, though it is almost always invested in equity. my suggestion is that you select the scheme based on your objective. that will have a much better impact over the long term.

ashu asked, Dear Rahul,i have MF's for Franklin India Opportunities,Kotak 30,Kotak opportunities,Birla Top 100,DSP Tiger,Sundaram Paribas select Midcap,DSP Technology.com,all are Growth funds and are inforce through SIP,i want to have 50 lac for my daughter marriage and studies after 10 years,am i gioing on a right path or where should i invest in SIP'S and what should i sell and when,pl reply
Rahul Goel answers, ashu, hi. i think your portfolio for your daughter could have been constructed better. for one, there are several thematic/sector funds, which are really unnecessary. interestingly, you do not own any of the "diversified" equity funds which we recommend to our clients at personalfn! i think its time you had a serious conversation with your agent.

Hitesh asked, Please advise 5 to 6 MF best sutable for SIP in this market condition
Rahul Goel answers, hitesh, hi. funds like hdfc equity, fr flexi and dsp equity should find a place in a long term portfolio of a person willing to take near term risk. however, your finanical planner will need to guide you on the allcoation between the funds.

SP asked, Hai, I would like to invest Rs.10,000 per month in stock market for longterm say 3 to 5 years. I have already started 7 SIPs in various Diversified MFs from last month. They are HDFC Equity, HDFC Top200, BirlaSunLife Equity, BirlaSunlifeFrontLine, FranlinPrimaPlus,SBI Magnum Global, Reliance Grouwth. I would like invest another 3000 permonth. plz suggest about existng SIPs and another 3000 per month investment.
Rahul Goel answers, sp, hi. for one portfolio it is best not to go beyond 5/6 schemes. too much diversification will not help. suggest you add a value style fund like dsp equity in your portfolio. we would give the birla funds a miss though. the exact recommendations can be made only after personal discussion.

Hitesh asked, Hi, Do all Mutual Funds hedge their stock portfolio through F&O. Is it good to invest in Mutual Funds which do so. Please tell me some of the Mutual Funds which hedge the stock portfolio. Thanks.
Rahul Goel answers, hitesh, hi. no, all funds do not do so. whether it is good will depend on what you are looking for. remember hedging does not one way. a 100% hedged portfolio would remain unchanged in value!frankly if you ask me, i think hedging adds little value to a long term portfolio. though i am sure there are some smart ways which can add to overall returns.

sushil asked, hi rahul, is it a good time to invest in mutual funds in this market. what should i invest in Largecap funds or mid cap funds?
Rahul Goel answers, sushil, hi. we are telling our clients at personalfn to add to their holdings. but not get fully invested as yet. usually our clients tend to have predominantly large cap funds in their portfolio. a very small portion may be there for mid caps.

ravimittal asked, Dera Sir, I want to know about Magnum Contra? How is this fund?
Rahul Goel answers, ravi, hi. we are not big fans of contra funds, though the returns are very attractive. we prefer the plain vanially diversified equity schemes in most instances.

Nirmal asked, Hi Rahul, Is it right time to invest in MF? and also as per Morgan Stanly they said India end 4 year Bull Run is it True or False ?
Rahul Goel answers, nirmal, hi. it may be a good time for you; however, your financial planner should be able to guide on whether you should or should not inevst in equities. well, at personalfn, we do not pay much heed to such optimistic or pessimistic calls on the stock markets.

sharma asked, I have ICICI smartKid, Rs.10,000 half yearly to pay for 20 years. I started this last year.Some of freinds saying SIP in MFs is better than the ULIP becoz of intial expenses in ULIP.I was in dilema what to do now ? Shall I discontinue this and start a SIP in a MF. Plz help me
Rahul Goel answers, discontinuing a ulip so early will result in you taking on quite a bit of a loss. best may be to hold on to it for atleast the minimum period for whcih you need to pay the premium. mutual funds in our view are preferred ways to save money.

jaincomm asked, I am going to invest in Reliance Liquid Fund for short time invest. Is it any risk factors are there?
Rahul Goel answers, liquid funds per se do not take on much risk. but nothing is guaranteed. also, you should consider inevsting in the liquid fund which has a lower tax incidence. ask your agent about this.

rachita asked, Hi Rahul, what's your suggestion for MF investors at present. What is the future of MF now onwards with market not being stable for sometime now?
Rahul Goel answers, rachita, hi. the future of mf is linked to the underlying asset. and as such we are not worried about fundamentals. we continue to see the long term as an attractive investment opportunity.

SwapnilSane asked, I want to purchase SBI Tax Gain MF. Is it right time to do so.
Rahul Goel answers, swapnil, hi. since you still have some time to meet you section 80c requirements, you can go in for a 6 month sip; break up the money into two schemes.

Jay asked, Can you suggest some aggressive funds for investment for a period of 3 - 5 years. Risk capacity is high.
Rahul Goel answers, jay, hi. funds like hdfc equity and franklin flexi should form the core of your portfolio. even though you have a large appetite for risk, do not allocate more than 10% of monies to sector funds.

amit asked, How is fidelity special situation fund?
Rahul Goel answers, amit, hi. it is an interesting fund which can find a place in a portfolio as it brings in a new style of investing monies. of course this fund will not form the core of your portfolio.

SwapnilSane asked, or should I go with Fidelity Tax Saver MF
Rahul Goel answers, maybe you can consider hdfc long term advantage or fr india taxshield.

radhika asked, I wish to start 3 SIPS o0f Rs 5000 each . Could you suggest the names of three funds. I am looking for capital appreciation
Rahul Goel answers, radhika, hi. i have already mentioned some names of schemes earlier. i think it will be more important in your case to determine whether you have the appetite for risk in the first place. only if you have the same should you consider inevsting in equity funds. and even then, ensure you have a minimum 3-yr time frame in mind.

radhika asked, I have invested Rs 30,000 in Franklin Blue Chip (D) in 2004. Should I book profits or switch over to some other fund as I don't need the money right now.
Rahul Goel answers, if you have another three years before you need the money, you can remain invested. however, you must ensure that any one scheme does not account for more than say 30% of your portfolio.

Ajai asked, Hi Rahul, i have reliance long term growth, SBI Magnum Tax Gain in my portfolio and also i am investing thru SIP in Reliance growth & BNP select midcap fund. How do you rate these MFs and can you advise on some other MFs which i need to include in my Portfolio.
Rahul Goel answers, ajia, hi. like i said in my earlier reply. you do not seem to be investing in any of the diversified equity fuds that we recommend to our clients! these are funds from hdfc and templeton. again, its time to have a serious discussion with your agent!

suresh asked, Sir i hv invested Rs.30000 in HDFC Equity Oppurtinity Fund-G kindly advise my investmnt is right or not?? if require change than pls advise fund name for switch???
Rahul Goel answers, suresh, hi. its a great scheme to own. but do you have it in the right allocation?

Rahuly asked, Upto how much percentage should be the investment in Mutual fund of your total investment (excluding pure insurance )portfolio should be ? and why ?
Rahul Goel answers, rahul, hi. there is no thumb rule for this. it will depend on individual to individual. generally we find that for most people currently, mutual funds (debt and equity) acount for a substantial chunk of the assets.

unni asked, Hi Sir I would like to invest 500K in MFs, inform me the best NFOs or existing, I already invested in 400K SBI BlueChip, 200 in Magnum Balanced 200 in contra & 200 in childrens fund
Rahul Goel answers, unni, hi. first suggestion is that you avoid nfos! most of them are just marketing gimmicks. invest in funds like hdfc equity and fr flexi. also invest gradually into the markets.

ajayp asked, dear rahul thanks for answers . how a new person entering in the world of mutual fund evaluate any fund , means what should be exact parameters and how to check . thnx in advance
Rahul Goel answers, ajay, hi. there is a lot of studying to do before identifying a scheme worth investing. an easier option for you maybe to identify an honest financial planner who will help you with all this.

saugata asked, how good will be DSP GOLD FUND considering the fact that gold reserves will decline
Rahul Goel answers, saugata, hi. we are recommending to our clients that they avoid inevsting in the scheme at the nfo stage.

SathishVM asked, Hi Rahul, I am 27 years old and have a good aptitude for equity. Of my total assets 36% is into equity Mutual funds right now and I'm planning to increase it to around 70% in an year. I have invested in Reliance Growth, Sundaram Select Midcap, HDFC equity and SBI Magnum Global and planning to add-on to these . Is my fund selection good or requires alteration. Also, I have ELSS SIPs running in SBI Magnum tax gain, ICICI Pru tax plan and HDFC LT advantage for 80C benefits.
Rahul Goel answers, sathish, hi. a fund like franklin flexicap is missing for sure. also, you can add a value style fund like dsp ml equity. overall avoid having more than 6 schemes in one portfolio.

Mfinvestor asked, Between FT Prima Plus and Flexi-cap and Opportunities Funds, which one would you recommend if onwere to choose only one from them as they seem to be occupying the same equity space?
Rahul Goel answers, between prima plus and flexicap indeed, its a close call on key parameters. we prefer flexicap for most of our clients though.

ARI asked, Hi Rahul, I have invested in Templeton India Equity Income Fund during NFO and now thinking to invest more in same fund, your suggestion?
Rahul Goel answers, hi. i think you should reconsider that decision. its a great scheme but you cannot have it as a core holding. and moreover, if i wish to invest aborad, i would rather invest in a dedicated global fund.

ARI asked, if the investement period is long say 20-30 years what should you suggest ULIP or term insurance + SIPs?
Rahul Goel answers, hi. over such a long period, ulips and mutual funds + term would compare well. but if you press me for an option, i would go for mutual fund + term.

vigor asked, Kindly suggest me some good ELSS... i want to invest 1 lacs this year
Rahul Goel answers, vigor, hi. you may opt for fr india taxshield and hdfc long term advantage. opt for a six month sip.

prasoon asked, which is the better option in debt funds cateogary short term floaters, liquid plus or liquid schemes at this point of time?
Rahul Goel answers, prasoon, hi. liquid funds are best avoided due to higher tax incidence. between short term floater and liquid plus, if your investment horizon is more than a month, opt for the floater.

b jayant asked, i have no of mfs in my portfolio,taking into consideration the global meltdown ,should i retain them or get out of the market?
Rahul Goel answers, we are recommending to our clients that they stay invested. i think you should do the same.

PARTHA asked, Hi Rahul.I am intrested in investing 1,00,000 rs to start with and 10,000 everymonth. I am looking at 50% long term say (5-7 yrs) and 50% short term (2-3 yrs). How do I go abt it and can you suggest some MFS.
Rahul Goel answers, partha, hi. best would be to have a portfolio of 5-6 schemes which could include hdfc equity, fr flexicap, dsp equity... fidelity too can find a place.

krishnan asked, which is the best bew NFOs
Rahul Goel answers, krishnan, hi. i think you should avoid the nfos that are hitting the market. as of today, there is no nfo which we are recommending to our clients.

shailendra asked, Hi Rahul, Good afternoon, My query is I have taken SIP of 24000/- each for HDFC tax saver and Fraklin Taxshield ? Do i need to invest in More SIPS..Also I have taken PPF..How much I should invest in PPF as the returns are less and the period is of 15 years..kindly answer my queries. so that I will come to know whether I m on exact track thanks
Rahul Goel answers, shailendra, hi. ppf traditionally has been an attractive opportunity. however, like you have realised, most people on evaluation fund today that this is not as attractive anymore. i would suggest that you invest only a limited amount in ppf. with regards to other sips, i think if you have a long term investment horizon in mind, you should accumulate your savings in well managed equity funds for one as they will give better returns over time.

Viswa asked, Hi Rahul, What are the best mutual funds available to invest for education of a child, probably to get good returns after 15 years from now ?
Rahul Goel answers, viswa, hi. although some funds do have child dedicated funds, it is best that you opt for the regular diversified equity schemes. its great you are starting early. the only thing that remains is to select the scheme well and then remaining disciplined!

DP asked, I HAVE NEVER INVESTED IN MF. WHAT IS THE ADVICE FOR ME, SIR?
Rahul Goel answers, invest considerable amount of time in identifying the right finanical planner for yourself.

Deb asked, Is it a good time to start SIP. Also, I invested 50000 in DSP ML Tech.com in mid July. was it a wise decision ? Should I redeem and start SIP ?
Rahul Goel answers, deb, hi. we would recommend that you avoid investing in sector funds. opt for the diversified equity funds.

sn asked, al mfs r trumpeting great returns. but 3 years back, none was suggesting mf route. your take, sir.
Rahul Goel answers, you are bang on! even today when you are investing, do not get swayed by returns earned in the last three years. having said that, mutual funds, if selected well, are a great way to invest. beware of dishonest agents though.

Praveen asked, When I opt for a SIP, how long should the tenure be?
Rahul Goel answers, praveen, hi. opt for 12 months at a time. your agent should be able to help you with renewals.

harshad asked, Hi, I have invested in Franklin INfotech fund growth about an year back - with the current rupee scenario do you think I shd move my money into a different fund?
Rahul Goel answers, harshad, hi. like i have said earlier, avoid sector funds... but if you must invest, then have limited exposure. remember apart from the exchage rate there are many factors at play here.

vivek asked, which type of mutual fund can give 30-45% return
Rahul Goel answers, vivek, hi. i think if you are investing today in a equity fund, you should not expect anything more than 15% pa, and that too over a 3 - 5 yr period.

narenstar asked, Hi Rahul! I have to invest money in MF. what is the best NFO HSBC Dynamic Fund (G)or DSP Gold Fund. Please advise.
Rahul Goel answers, naren, we have recommended to our clients that they avoid investing in either of these schemes. i think you should evaluate existing schemes.

ranjit asked, WHY SHOULD I NOT INVEST IN DSP ML GOLD FUND DURING THE NFO? ITS NOT A PURE NFO AS THE INDIA FUND WILL BE A FEEDER FUND AND THE INTERNATIONAL FUND IS 12 YR TRACK RECORD FUND? ALSO DUE TO THE SEBI LIMIT OF 200 MLN $, ONE MIGHT NOT GET TO INVEST ANY FRESH MONEY IN THE FUND
Rahul Goel answers, ranjit, hi. the reason is that because its a feeder fund, you will incur expenses at two levels. and then you will have to take a currency exposure, which may work against you. and in any case, if you wish to inevst abroad, why not in a fund whicih has the flexibility to invest anywhere in the world. and if you wish to inevst in gold, why not simply buy physical gold?! if you wish to buy lot of gold, go for an etf.

ramsam asked, Hello Rahul. should i go for lumsum investment into fr. flexi cap or SIP?
Rahul Goel answers, in most instances sips are preferred.

pt asked, What quality should we look in a good financial planner ?? Pls. suggest. from ur replies it seems this is the most critical area .
Rahul Goel answers, i know it is difficult but ensure he is honest. one way to judge this is to talk to some of the clients he is presently servicing.

pramod asked, Mony investment in Mutual Fund is safe?
Rahul Goel answers, pramod, hi. investing in an euqity fund is not safe. in fact it carries significant risk. over three years, the risk tends to dilute considerably, but not before that.

Rahul Goel says, Thank you all for participating in the chat. A lot of you have written to info@personalfn.com asking to meet a personalfn consultant. i request that in such emails please mention your complete contact details (name, tele nos, and address). 

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