Rahul Goel says, Good afternoon! Welcome to the discussion on financial planning! Let's start!

Saurabh asked, Hi I am always in confused about financial mangement. My net salary is about 65K. I am having around 9K/pm SIPs. 48k/Year LIC. having home loan of 12L. please advise me about the best amount need to invested and where to invested. my age is 32. i need to do some planing about my retirement as well as child future thanks in advance
Rahul Goel answers,  at 2008-01-17 13:09:29saurabh, hi. well, with the information that you have provided, all i can tell you is that you should save as much as you can, and also start as early as you can. for me to be able to guide you on planning for your retirement and child's future, i will need a lot more information. suffice it to say that since you are young, and your disposable income is probably a significant sum, you should not have difficulty in planning for the same... but you must start now. and ensure you get honest advice, else you stand to lose out.

Ramesh asked, please provide me three best funds to start as sip
Rahul Goel answers, ramesh, hi. in our view one should not look out for the best funds. look out for the funds which are best suited to you. so while a fund like Hdfc equity may suit me the best, it could not suit you at all in case you were risk averse. so, please do not about looking for the best fund. look out for funds which suit you best. and these recommendations can come from an advisor who is both honest and competent.

RakeshAgrawal asked, I want to Invest 50k & wants return a Goods Amount Time No Bar, Investment Plan No Bar Please advice. Where I can invest & what will be the time limit
Rahul Goel answers, rakesh, hi. if you are willing to invest for a tenure in excess of 3 yrs, and have appetite for risk, the have a portfolio of funds which consists largely of diversified equity funds like hdfc equity and franklin flexi. i would avoid sector / thematic funds even though they have done well in the recent past.

VJ asked, Hi Rahul! What would be the best split-up to have a safe investment with higher returns (Ex: Bonds:10%, Shares: 25%..) something like that
Rahul Goel answers, hi. the answer to this will depend on many things including your needs, aspirations, income levels, committed expenditure, risk appetite etc etc. notice that this is highly customised. any general view may not benefit you at all.

Padma asked, Hi Rahul,I would like to start investing thru SIPs.Is it better to go for ELSS SIPs for tax savings or normal SIPs for better returns or a mix of both?My objective is to create wealth primarily and hence my time frame is minimum 5 years.Can you suggest me some funds to start as SIP?
Rahul Goel answers, padma, hi. if you need to save tax, and you have the appetite for risk, then it makes sense to inevst in tax saving equity funds to the required extent. think of it.. if you invest Rs 10,000 in a tax saving fund, you save about Rs 3,000 in taxes (highest tax bracket). Effectively you invest only Rs 7,000 or in other words, you are investing at a 20,000 sensex level at a price of a 14,000 sensex (30% discount). SIPs in our view are a great way to create wealth. but one must understand that sips are only a means to investing in mutual funds. if you do an sip into a poorly managed fund, then don't expect to create wealth. so identify your schemes well, and then do SIPs. add lump sums to the schemes when the opportunity presents itself.

Padma asked, I am yet to start a SIP.I can spare Rs.3500 per month.How many funds can I have in my portfolio?
Rahul Goel answers, hi again. in our view, about 5/6 funds is more than enough in a portfolio.

RamNikumb asked, Good Afternoon sir, I want to invest into 4-5 Mutual Funds for long time invester(5-10) years. Can you suggest best funds to invest.what can be other good investments along with MF's.
Rahul Goel answers, hi. your time frame would suggest that you can consider equity funds as an opportunity. however, are you prepared for a near term fall in the markets? in our view, if the markets were to fall by 20% tomorrow, and you were to get worried, then you do not have the risk appetite.... and therefore you must not be over weight on equities. but if you do have appetite for risk, then consider funds like hdfc equity and franklin india flexicap. the trick to earning a good return will be identifying the right schemes to begin with and avoiding unnecessary churn over the tenure of the investment.

sandip asked, i would like to know which is the best mutual fund for tax shaving
Rahul Goel answers, sandip, hi. we like funds like franklin india taxshield.

ranjan asked, HI, My question is, is it good to invest in Infrastructure related mutual funds and suggest some of the names which are good in 2/3 years time frame
Rahul Goel answers, ranjan, hi. in one word - NO! the returns are good, but we still think that investors should not inevst in sector funds. and if they do, they must be sure that they have very high risk appetites... and even then the allocation to such funds should not exceed 10%. to understand the risk in such funds, you only need to read about what happened to all the tech funds which were launched in 1999/2000.

Param asked, Hi Rahul, Please advise on the approach to select a Gilt Fund (for my retired dad) with a long term investment view (> 5 yrs). In my opinion, his priorities should be - Fund Pedigree, Cost Control, Convenience (Online purchase/tracking), Customer Service. Let me know your recommendations.
Rahul Goel answers, param, hi. well, the points you have listed out are important. however, let me question the idea of investing in a gilt fund to being with. gilt funds can be volatile, and as we have seen not to far back in history, they can also generate negative returns. is your father ok with that? or would he be better off in a FD or a post office scheme? if his income needs are not month on month, then would an FMP be better for him where the interest rate risk is minimised and the returns more tax efficient. also pl understand that its better to have a portfolio rather than a particular scheme. a portfolio approach will definitely work a lot better.

BALA asked, Hi, I have liquid money of Rs 50 lakhs, what If I decided to retire at the age of 38, with a monty return of Rs. 60,000/month, MF better or Equity is better, or ULIP ?
Rahul Goel answers, bala, hi, if you were to retire today, then you could probaly earn about 8% without taking on much risk from this money... i.e. rs 4 lacs per year or about rs 33,000 pm. i do not know your present age and therefore cannot guide you on where to invest. but if you do have atleast 5 yrs to retire, then consider a portoflio biased towards well managed diversified equity funds.

Param asked, Rahul, could you please recommend the approach to select equity MF schemes that utilise value-based investing approach? I'm already investing in QLTEF, but would like to be aware of the options. Thanks.
Rahul Goel answers, param, hi. among the other value funds that we like is dsp ml equity...

sunny asked, Hi rahul, I have Fidelity Equity, Franklin India Prima Plus and HDFC Equity. I had invested in all 3 on the same day in 2006 and they are currently giving me nearly same returns. Does it make sense for me to invest all my amount in 1 of these 3 funsds and if so, which one? Also I have Reliance Growth, Reliance Vision, Reliance Diversified Power, ING Domestic Opportunities, Kotak Opportunities, DSP TIGER, Birla SunLife Equity, SBI Magnum Global, Sundaram Select Mid cap, Reliance Equity Advantage, Franklin high Growth Companies. Please help me to prune my portfolio to a select few.
Rahul Goel answers, sunny, hi. you have too many schemes! and a lot of them appear to be recent NFOs. its time you restructured your portfolio... have about 5/6 schemes only. also you will need to get the allocations right. You have several thematic/sectoral funds. ensure the overall weight for these schemes does not exceed 10% of your portfolio.

Frank asked,  My Current Asset Allocation is 20% - MutualFunds(Equity) 20% - bonds 60% - FDs (Out of this I plan to buy land using up half of this amount this year) Out of my salary 12Lacs\Annum 15 % - Home loan EMI 10 % - Car Loan EMI I'm 31 with dependant parents and getting married soon. Is my financial mix ok? Thanks, Frank
Rahul Goel answers, frank, hi. well, since you will be using a lot of your low risk money for real estate, the overall allocation will change a bit. but you will remain overweight in debt.... about 50% of your monies will remain to be in debt. this is very high. are you very risk averse? i think the answer to your question will depend on what is your risk appeite. if its low, then you probably have a broadly correct allocation, though on the debt side the yield could be improved by opting for FMPs etc. but if you have an appetite for risk, then the allocation will need to undergo a dramatic change.

RR asked, I have already invested in MF through SIP route(10 funds, Rs 25,000each). Now I hv cash of 2 lacs n would like to invest in MF through closed end option. Please advise ur comments n the good funds as well.
Rahul Goel answers, hi. close ended funds are popular for several reasons. unfortunately the one reason they are very popular these days is because the people who sell these funds to you get a very high commission. our view - be very cautious. in recent times we have not come across a single close ended scheme that we have liked and recommended to our clients at personalfn.

NS asked, Rahul, I heard that as a rule of thumb, the equity portion of your portfolio should be 110 - your age. For e.g. if you are 50, the equity should be 60% of your portfolio. Any comment on this asset allocation?
Rahul Goel answers, hi. well, at personalfn, we do not concur with such std definitions of asset allocation. we meet a lot of elderly people who have a very high risk appetite, and few young people who cannot take any risk at all....

vishal asked, I understand that sector funds are riskier and diversified should be preferred over them. But looking at banking prospects is it advisable to invest in Reliance banking fund?
Rahul Goel answers, vishal, hi. let me answer this indirectly. in 1999/2000 the prospects of the tech sector too were very good. but unfortunately the tech funds have been very poor performers. the companies though have done well in our view. so the banking sector may do well. but are the stock prices already factoring in this growth? if they are there are not much gains to be had.... when investing do not look at future prospects alone. also look at current valuations.

ajit asked, Dear Sir, I want to know about the new best upcoming MF.
Rahul Goel answers, ajit, hi. any particular reason you wish to be invested only in NFOs? in our view in most instances NFOs are nothing more than marketing initiatives aimed to mobilise money.... they offer very little to the actual investor.

san_india97 asked, I have portofolio in ICICI Infra & TATA Infra, now i want to invest into those two and into Reliance Power Sector, DSP ML TIGER, KOTAK Opp. Funf, SBI Comma. Please suggest me which is better to continue?? Thanks
Rahul Goel answers, hi. your portfolio consists of only sectoral and thematic schemes. either you have a extremely high risk appetite or you have been misguided. pl evaluate your portfolio and understand the risk that you carry very well.

Satish asked, Rahul, I'm currently sitting with around Rs 10 Lakhs cash. I want to invest it for a period of over one year. I've identified Birla Sun Life Income fund-G, ICICI Pru MIP-G and Principal MIP-G as options. I would like to invest in one of these. What is your suggestion? Is there any other better option available?
Rahul Goel answers, satish, hi. in my view you should invest the money in a liquid plus fund... and in march sometime lock in the money in an FMP... yields then could possibly be very attractive.

nri asked, how is Fidelity equity Fund ? what are its prospects for next 2 years
Rahul Goel answers, personalfn does have fidelity equity fund in some of its recommended portfolio... so we like it and we believe that over a 3-5 yr time frame, it will do well.

Raju asked, Sir, I have been investing MFs for the last one year, my investment is in 4 equity (Reliance growth, HSBC Equity, ICICI Infra, ABN Future leaders) funds almost equally and the total amount invested is Rs. 5 Lacs, pl. let me know whether the portfolio is well balanced or I need to do some changes
Rahul Goel answers, raju, hi. if you were a personalfn client you would not own any of the schemes that you currently own! its time you took a hard look at your portoflio... also question your agent on his recommendations.

girishe asked, You asked, hey rahul, i m new to investing in share n mf, i wanna invest around 3-5 lakhs , plz advise some quality share for long term investments
Rahul Goel answers, hi. if you are new to investing then do not rush into investing the money. do the following - a. read up on mutual funds and investing in general as much as possible (start with the money simplified guides on www.personalfn.com - these are free) b. identify an honest and competent financial planner who will guide you once you have taken care of these two, you would be on course to make investment decisions which are best suited to you.

dnandan asked, Rahul How can I meet you personally to discuss my financial plans.
Rahul Goel answers, hi. pl send me an email at rahul@personalfn.com with your contact details and i will get in touch with you.

Saurabh. asked, Thanks for the advise. Please suggest me better way to provide you my financial details.
Rahul Goel answers, saurabh, hi. you can write in to me at rahul@personalfn.com with your details.

SanjayKumar asked, Hello Rahul, I am 32 yrs old, married and having one child of 3 and 1/2 years old. Here is my financial status - Current salary - 81k pm (inHand) investments - EPF - 7,50,000/- Stock Market - 4,20,000/- MF - 15,000/- LongTerm FD - 20,000/- ShortTerm FD - 2,50,000/- Cash in saving a/c - 4,00,000/- Insurance coverage - - 35 Lakh Term insurance for next 9 years - 5 lakh moneyback LIC policy (premium - 40,000/- pa) for next 9 years. - LIC pension policy (premium - 10,000/ pa) Property - - Flat worth 40 lakh - Car worth 3.5 lakh Debt - - House loan 11 lakh (EMI 11000/- pm) Please advise what kind of further action is needed in financial area.
Rahul Goel answers, sanjay, hi. good that you have taken some term insurance already. and thank god you have not taken too many savings based insurance policies! what you need to do is - a. ensure your stock portfolio is best suited for you (do not let the run in the stock market make you believe that you already have the right stocks) b. you seem to be a busy person (cash in bank is very high)... and therefore you need to focus more on mutual funds these are the two recommendations that i can make based on the information you have given to me...

JK asked, Dear Rahul, i want to invest in two of the thease funds for a period of 3-5 yrs kindly suggest me, hdfc equity,sbi contra,hdfc growth or birla sunlife equity
Rahul Goel answers, our preference is for hdfc equity... but you are aware that this is an equity funds which carries high risk, right?

sm asked, Provide your take on JP Morgan India Equity Fund?
Rahul Goel answers, hi. we recommended to our clients that they avoid investing in this fund.

raj@rediff.com asked, I have invested in Sundaram Energy(Thematic) funds and planning to invest in Reliance Energy fund and HDFC Infrastructure fund. Please let me know the future of these funds
Rahul Goel answers, raj, hi. all are sectoral/thematic funds. all i can say is that such a portfolio would carry extremely high risk.

Rahul Goel says, Thank you all for participating in this discussion. See you all next week! In the meant time you can always send in your queries to Personalfn at info@personalfn.com