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!

lit asked, Will investing in SIPs make sense? Considering that the markets are volatile?
Rahul Goel answers,  at 2007-08-23 12:59:12hi, investing via sips should be the preferred way for most investors. there are a couple of reasons for that. one, it helps you match your cash inflows and outflows. and two, it enables to invest in the market over a period of time so that at the end of the investing period you effective have a portfolio where the cost of acqusition is averaged - you buy when markets are down, you buy when markets are up. so over a stock market cycle, you tend to do well.

prashant asked, Please let me know the best ELSS (Mutual fund) Schemes
Rahul Goel answers, prahsant, hi. there are a couple of good elss schemes.. our preferred ones are hdfc long term advantage and franklin india tax shield.

shiva asked, Please let me know names of 3 good diversified equity funds
Rahul Goel answers, shiva, hi. in the diversified category we tend to recommend funds like hdfc equity and franklin india flexciap to clients who have appetite for risk and are investing for the long term. it is not only important to invest in the right schemes, but also in the right allocation. you financial planner should guide you on this.

mov asked, How to distinguish a good financial planner?
Rahul Goel answers, hi. a couple of approaches can be taken here. one, ask him to disclose the commissions he receives on the funds recommended vis-a-vis funds he is not recommending. two, talk to some of his existing clients. among the other things when talking to clients understand whether or not there is churn in the portfolio; and also, how many NFOs the financial planner has recommended to the client. all this should give you some idea of how good the financial planner is.

michael asked, Hello Rahul, I am NRI and will be retiring very soon. I want to invest over Rs 25 lakhs in debt for monthly income. Please advise best debt instruments with allocation to obtain maximum benefit. Thank you.
Rahul Goel answers, michael, hi. if you are looking at generating monthly income, there are few good options for you. one is fixed deposits, and the other MIPs from mutual funds. while fds offer assured return, they are taxable at the marginal rate of tax. mips, though more tax efficient, will offer returns which could be volatile. ideally you should have a mix of two. FMPs could have been considered but the returns are very low currently and it may not make sense to lock in the money. do not invest in equity for generating a monthly income.

dd asked, hello sir, i want to invest 5000 per month, which is the best way?
Rahul Goel answers, hi. if you are investing for a need say which is 5-yrs down the line and you have an appetite for risk, select 3/4 diversified equity funds and do an SIP. select the funds carefully and also ensure the allocation is right. do not get swayed by ideas of investing in ipos or nfos.

Phani asked, How are these Gold Funds work? is it really a good investment option?
Rahul Goel answers, phani, hi. there are two types of gold funds these days. one, the etfs, whicih invest in gold directly. the other, are open ended funds which invest in companies which are into the mining of gold and other commodities. we have recommended to our clients at personalfn that both may be avoided. for various reasons. the preferred way for most investors is to buy pure gold (though not from a private sector bank - they charge a huge premium) and keep it in the bank locker you already have.

Melody asked, Hi, I have various SIPs in reliance vision, growth, HDFC [Get Quote] Long TErm Advantage, SBI [Get Quote] Magnum Tax Gain and recently taken out ICICI [Get Quote] Pru Emerging Star. I allocate nearly 8000 per month in these SIPs. Do i have the right mix of SIPs ?
Rahul Goel answers, melody, hi. i think you can definitely have a better portfolio. funds like hdfc equity or franklin flexi which should really form the core of your portolio are missing!

sanjay asked, hi, what should be the minimum time horizon to invest in mutual funds to get a return of at least 20% p.a. can you suggest some mutual funds for the purpose of investing for more than 10 years.
Rahul Goel answers, sanjay, hi. the time frame for investing in equity mutual funds should be a minimum of 3 years. the more the better post that. also, it may be reasonable to not expect a return greater than 15% over the next 3-5 yrs. then too this is assuming you are invested in the right funds.

bsnmin asked, I want to invest in mutual funds that grow my money with moderate risk. Can u suggest me suitable options?
Rahul Goel answers, hi. if you wish to take on moderate risk, you have two options. you could either invest in hybrid funds which invest in both equity and debt or allocate the money between equity and debt yourself. amongst hybrid funds are balanced funds. we like hdfc prudence fund and tend to recommend to our clients who are looking at not taking on moderate risk.

Vikas asked, Hi, I have holding following mutual funds(SIP). Please suggest whether my portfolio is good or not? Also, please let me know your view, whether I should reorganize my portfolio. - HDFC Tax Saver : Rs .1000/- p.m. - HDFC Equity : Rs. 2000/- p.m. - Reliance [Get Quote] Growth: Rs. 3000/- p.m. - Reliance Vision: Rs. 2000/- p.m. - Reliance Power : Rs. 2000/- p.m. - SBI Magnum Contra: Rs. 3000/- p.m. - SBI Magnum Tax Gain : Rs. 1000/- p.m. - DSPML TIGER : Rs. 2000 p.m. - ICICI Prudential Service Industries : Rs. 2000 p.m. I would like to continue with SIP in these funds for next 3 years and would like to withdraw money from all my investments after 15-20 years. Apart from this I got an FD of 12 lacs at the interest rate of 9.5% for 2 years. Also, my monthly take home is Rs. 50000/- Can you suggest me how better I can organize my portfolio? Regards Vikas
Rahul Goel answers, vikas, hi. you definitely have some very good schemes in your portofolio. i recommend that you avoid investing in sector funds (you can read more about this on personalfn.com). go in for well managed diversified equity funds. also, notice you do not have any templeton fund; consider adding fr flexicap in place of the sector funds you own. also, pay attention to your overall asset allocation... that way you can be more confident of achieving your long term goals.

sanjaysanjaysanjay asked, whether sip are better or we should wait for falling markets to enter in the market at reduced nav.
Rahul Goel answers, sajay, hi. in our view it is impossible to time entry and exit into the stock markets. you may get it right a couple of times but over time we are not sure that this strategy would work. we would stick to the SIP route.

asd asked, Iwant to start investing in MF. Pl. advise what are the schemes I should invest.
Rahul Goel answers, hi, i would recommend before that you should go about identifying the right financial planner for you. this effort will have significant implications for your portfolio. with respect to the schemes have already mentioned a couple of names earlier in this discussion.

vikash asked, I have investd in ELSS scheme. After three yrs (lock in period), for how long can i continue invstd. Is there any time frame as such.
Rahul Goel answers, vikash, hi. you can continue to remain invested in the ELSS once the 3-yr lock in is over.

hyder asked, Hi Rahul At the age of 35 what is the best method to plan for retirement.
Rahul Goel answers, get yourself a financial planner! a compentent financial planner will handhold you through the entire process!

Ganpath asked, I can save 2 lac p/a. I am aged 40 and having 2 children. Could you please suggest a suitable plan for me
Rahul Goel answers, ganpath, hi. i think it is very important for you to identify your objectives. two probable objectives are your retirement and also your children's college education. once you are clear on this, making a plan to take care of these needs should not be very difficult. this will definitely require personal interaction though.

sanmil asked, Hi Rahul, is investing in Sundaram Select Midcap a good choice for a SIP.
Rahul Goel answers, sanmil, hi. sund select midcap is a very good fund. but remember its a midcap fund. at personalfn we recommend that our clients do not have more than 10% of their monies in such sectoral/thematic funds.

Priya asked, Good Afternoon. Please suggest whether my portfolio is good or not? One time investment of Rs. 5000 each HDFC Equity Fund 1995 (HEF), SBI Contra Fund 1999, Franklin India Flexi Cap Fund, Reliance Media & Entertainment Fund, DSP ML tiger Fund, Pru ICICI Services Ind Fund, Reliance Growth Fund & SBI Magnum Global Fund SIP of Rs. 500 each Sundaram Tax Saver, HDFC Tax Saver Fund, SBI Magnum Tax Gain & Kotak Tax Saver. SIP of Rs. 1000 of Birla Sun Life Equity Fund Do i have the right mix? Also, please let me know your view, whether I should reorganize my portfolio
Rahul Goel answers, priya, hi. prima facie you have too many of these secotral / thematic funds. you should be very careful when committing monies to these funds. in our view most investors should be invested in diversified equity funds, which are predominantly invested in large cap companies. maybe you can read our research on sector funds (on personalfn). post that you can take a call. and, also, you have too many shcemes in your portfolio!

ksr1234 asked, Hi Rahul, I have 2L in my hand. Please tell me some good MF/FMP where I can invest my money to get it double by 3-4 years.
Rahul Goel answers, hi, doubling in 4 years probably implies a return of 20% pa... that in my view is very difficult to earn. 15% compounded over 4 years is a lot more rational. as suggested earlier, pl go in for the regular well managed diversified equity funds. your finanical planner should be able to help you identify these funds.

abhik asked, Hi Rahul, I have around 10k per month which i can invest fro tax saving options. I am 25yrs old nd ids is my first job. Can u suggest me how should i allocate my resouces (% Wise) accross ELSS, PPF, ULIP etc. like tax saving schemes
Rahul Goel answers, abhik, hi. since you are working, i am assuming you are putting money into your epf account. what i would recommend is that you consider two things - one, taking a term life insurance cover for 30 yrs (if you are married, this is very critical); the rest of the money should go into equity funds via sips. however, if you have the skill and the time to manage a stock portfolio then some of this money can go into direct equity. also, ulips are best avoided for you.

kamal asked, Hi Rahul, I'm 27, take home is 55k, I have invested 90k in Life Insurance on a per year basis for 3 yrs, I'm planning to go for MF SIP @ 5k per month for longterm, I also have 50k in stock market, kindly advise which MF to go for, is my financial planning robust?
Rahul Goel answers, kamal, hi. your portfolio is similar to many who land up investing very large sums in ulips. this is not the right allocation for you. presently you should be considering taking a term insurance plan and investing rest of the money in line with your other objectives. if tenure of objectives is far out, go in for risky assets like equity funds. you definitely need to work on your allocation. the sooner you get it right, the better for you.

rock asked, Hi Rahul, I am new for investing,My age is 33 yrs,since i have not invested in any mutual funds etc.I have a daughter who's age is 3 years and i will prefer to invest atleast 1000Rs per month for her future studies etc.Please advice me what will be the best investment other than Insurance policy.
Rahul Goel answers, rock, hi. opt for a portfolio consisting predominantly of well managed diversified equity funds. since your investment amount is small not many will be willing to assist you. not to worry, just get in touch with personalfn and we will be delighted to help you our. you can write in to us at info@personalfn.com

Ari asked, Hi Rahul, I am an NRI and planning to invest in mutual funds. what do you suggest whether to invest in India or foreign funds?
Rahul Goel answers, ari, hi. the answer to your question would depend on how your assets are presently allocated. but in any case i would recommend that if at all you need to invest in global funds, its best to wait for more funds to be launched. we will hopefully have better options than what we have now.

ajay asked, hi,i want to save for long term invetment in mutual funds.Is investing in the equity diverified + ELSS better or is it safer to optimise in a balanced fund? am looking for good returns to fund my daughters education and my retirement plan.pse advice.
Rahul Goel answers, ajay, hi. it is best that you go in for equity funds and set aside a small portion for other assets. if your time frame is over 5 yrs, it is very likely that equities will outperform the other asset classes. in such an instance you would not want to be in a balanced fund where every rise in equity prices would result in profit booking - money would move to debt. having said that balanced funds are great investments for those who do not wish to be inevsted in very high risk instruments like equity funds.

cheeru asked,  By selling the flat, I will get some money. Please let me know what is the best way of invest this to make it double within 3 year of time period
Rahul Goel answers, cheeru, hi. doubling your money in three years is very ambitious! i unable to guide you on this!

sudip asked, How much percentage of one's investment should be in equity, property and debt? I heard that you keep 100-Age percentage in equity if you are a moderate risk taker - is that right?
Rahul Goel answers, sudip, hi. well that 100-age concept is pretty popular, we at Personalfn do not follow that at all. we meet people who are like 80 yrs of age and their risk appetite is equivalent to someone aged 30. so its a very personalised thing. your allocation too would depend on your risk appetite, expectation of return etc.

ashwin asked, Hi Rahul, I have started earning right now with a monthly take off of 17k. suggest me some mutual funds and sips with medium risks.
Rahul Goel answers, ashwin, pl spend time in identifying the right financial planner for yourself. i can name schemes - hdfc eq, fr flexi but there is a definite need to understand your needs and objectives, your profile etc before one can be certain in his recommendations. i recommend you employ the services of an honest financial planner who will hand hold you through this entire process.

RAVI asked, HELLOW RAHUL,What will be the average return of good diversified equity mutual fund in next 20 years ?
Rahul Goel answers, ravi, hi. well, its diffuclt to give an estimate for that long a time frame as circumstances change. but from a 3-5 yr perspective, well managed diversfied equity funds shoudl be able to return 15% pa.

rusha asked, I have received an amount of 2m as VRS comp. Which is the best option of parking my funds safe with good & steady returns. I do not expect more than 25-27kp.m.
Rahul Goel answers, rusha, hi. i think it will be difficult to earn rs 25-27 k from the corpus you have. of course you can take more risk with the hope that you will make such a return. prima facie its best you lower your estimate of return. i think a good post tax return for a low risk investor in current times is about 8% - 9%.

SanjayBharti asked, Please let me know if I want to invest Rs. 1 Lakh in diversified MF's for long term horizon whether I should go for secondary market purchase or NFO having no entry load? Please suggest some diversified MF's to invest for long term.
Rahul Goel answers, sanjay, hi. most NFOs are best avoided. go in for existing funds. but then all existing funds are not good. you will need to study the schemes before committing your hard earned money.

drshetti asked, hello good afternoon we are doctor couple both 46 years ols with one daughter 17 yrs in 1 st yr engg . we have investment surplus of 1 lack per month (both together) how should we plan to invest and where to invest . i am comfortable with online icicidirect
Rahul Goel answers, well, i think you should worry more about the quality of recommendations you are getting as against the convenience of investing. i would recommend you identify a financial planner who can help you plan your investments. the effort will be worth it!

Nisith asked, I'm a new investor starting now only. How much PersonalFn will Charge for advising me on investment options and asses allocation.
Rahul Goel answers, nisisht, hi. pl can you visit to know more about our services - http://www.personalfn.com/aboutus/whypersonalfn.asp

bhavesh asked, for a 20 year horizon , is Mutual ufnds better or ULIPs? Considering pure investment perspective only
Rahul Goel answers, well, over such a long horizon the excessive cost strucutre of ulips evens out. so ulips and mutual funds, if managed equally well, should perform in line. however, i still prefer a combination of term insurance + mutual funds to a ulip.

Subrata asked, Hi Rahul, I want to set aside some X thousand Rupees per month, which i want to use occassinally for buying Jewels, Fund a trip, etc (all these can occasionally occur max twice in a year). I do not want my fund loiter in Savings account, instead want to invest in some fund(s) which gives me easy liquidity over periodic intervals, and, compound returns around 8 to 10 %. I do not want to close this fund and wants to use this for life long for the same purpose. Your suggestion requested.
Rahul Goel answers, subrata, hi. since the need for liquidity is high, best that you go in for a liquid plus fund. but here you should not expect a return of more than 6% post tax. even then, this is much better than what you would get in a savings bank account.

naimesh asked, hi rahul, I want to invest in tax saving mutual funds (ELSS) having lock-in period of 3 years under the growth option. Now, I want to know whether my money will be locked for lifetime as is the case if I invest it under the dividend reinvestment option or will I be able to withdraw it after 3 years in the growth option?
Rahul Goel answers, naimesh, hi. all new money that goes into an elss fund is locked in for 3 years. that's it. so if a elss fund declares a dividend it goes back as new money into a fund... that's locked in for 3 yrs.

angsu asked, Hi, what is the minimum time to get a reasonable benefit out of any mutual funds?
Rahul Goel answers, hi. if you are referring to equity funds, then a minimum of three years. but even then if you are not invested in the right funds, it may take a lot lot longer than that.

manojkumar asked, I am 39 years old myself & wife is earning 60 thousand Rs Per month.How much we should save or invest so that i can have financial freedom at the age of 52.Presently wehave 7 lakh in PF,1 lakh in stock 1 lakh in NSC.I have one son.How much we should save to get finacial freedom at 52.
Rahul Goel answers, manoj, hi. the answer would depend on what you define as financial freedom. that would be a function of the kind of money you need. only once we have that info, can we even start work on a plan. in any case such a plan would require personal interaction with a finanical planner.

Phani asked, who would sale pure gold other than banks to buyfrom ?
Rahul Goel answers, your jeweller should be able to sell you hallmarked gold.

Ashiff asked, Hi, is it a right time to enter the nutual fund market or should I wait for 2 - 3 more months
Rahul Goel answers, ashiff, hi. best that you do not try and time entry into the markets. invest in small amounts at regular intervals. that shoudl work for you.

varun asked, first of all welcome,can you kindly suggest what is a bettwer option a STP OR SIP. thanks
Rahul Goel answers, varun, hi. sip will suit you if your cash inflows are monthly; an stp will suit you if you have a lumpsum today that you wish to invest over a period of time.

kulsa asked, i have hdfc equity, Fidelity special situations, sundaram mid cap, Sbi magnum global 94, icic pru dynamic & infrastrucute, DWS opportunities. how good is this portfolio
Rahul Goel answers, kulsa, hi. like i said, i think you should avoid investing in sectoral or thematic funds. the portfolio can definitely be imporved by adding a fund like fr flexicap and dsp equity.

talwar asked, Rahul, you are arguably the fastest chatter so far we have had in this series of professional chats. Great going. I earn 25k per month and invest 9000 in ELSS schemes of Fidelity, Birla and Kotak and I put another 5k in equity. I am 24 years old. Am i doing OK?
Rahul Goel answers, talwar, hi. since you have not mentioned where yo are inevsting the rest of the money, i am unable to guide you on this. prima facie you seem to be very disciplined in your investing.

Rahul Goel says, Thank you all for participating in the chat. Will see you all next week! In the meantime for guidance on financial planning you can always visit our website - www.personalfn.com