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?
In an hour-long chat on rediff.com on Thursday, financial planning expert Sailesh Multani offered some valuable tips. Here is the transcript:
Sailesh says, Hello & Good evening - welcome to this chat session
Sailesh says, For all those who are looking forward to recommendations on various types of mutual funds, here are my picks. In the equity fund category HDFC Top 200 Fund, DSP BR Equity Fund and Fidelity Equity Fund. In the balanced fund category, I recommend HDFC Prudence Fund. In the ELSS category HDFC Tax Saver and Fidelity Tax Advantage Fund
Priya asked, Sir I am confused between DSPBR Equity fund plans which one I have to take you mean..DSPBR Equity Divident want long form?
Sailesh answers, at 2011-09-29 15:59:54Hi, you can choose to invest in DSP BR Equity Fund. This is a well managed diversified equity fund with investment in mix of large and midcap stocks. The fund has been a consistent performer and should be a part of one's portfolio.
MAT asked, What about Gold ETF at this stage
Sailesh answers, Hi, Gold has correctly very sharply in the last one week. This was expected since the price rise was equally sharp. From a portfolio point of view every investor should have 10-15% allocation to gold. It will act as an insurance in your portfolio. As long as the developed economies remain in crisis, gold will be the most sought after commodity. The price of gold is trending upward but the journey is definitely going to be bumpy. I would not recommend buying gold to make quick money. Gold ETFs are preferred over physical gold.
gaurang asked, Hi Sir, I want to plan for child plan, what is the best option SIP or Govt. Securities
Sailesh answers, Hi, if you are planning for your child's future education and marriage and if your investment horizon is more than 8-10 years then your investments should ideally be in diversified equity funds. You should create the necessary fund for each expense by starting SIPs in the funds recommended by me at the start of this chat. Your asset allocation can be 70:30 in favour of equity.
jyoti asked, Investing in PPF and SIP ..which one is good..how much % we have to invest in each?
Sailesh answers, Hi, PPF is a debt investment. It also offers tax saving under section 80C. If you wish you can invest in PPF upto the maximum limit of Rs 70,000 per year. There is no formula to calculate the ratio between SIP and PPF. It will depend on your investment horizon and risk appetite.
safdsfds asked, Please suggest good pension plans . I am expecting 50K Per month as pension . My Age is 34 yrs .
Sailesh answers, Hi, I don't recommend Pension plans for retirement planning. Instead I would advise investors to get a retirement plan made for themselves. Among other things, retirement plan would tell the investor how much corpus he should accumulate by the time he retires so as to ensure a comfortable retired life. The retirement corpus should ideally consist of equity funds, debt funds, bank FDs and gold ETF.
ananta asked, what is the best insurance for tax saving
Sailesh answers, Hi, if you are looking at insurance for tax planning then the ideal choice would be a Term plan. Term plans offer pure risk cover with no maturity benefits. It offers higher sum assured for relatively lower premium.
Manish asked, What is your review/Feedback on NPS investment?
Sailesh answers, hi, NPS doesnt have a track record to show for. Therefore at the moment my advice to investors would be to wait and watch.
apurva asked, Hi, considering one year time period, is this good time to invest further more into equity market, or to stay invested?
Sailesh answers, hi, one year is a very short period for equity investment. the ideal investment horizon for equity investment is 5 years. If your investment horizon is one year you should settle for lower return and consider investing into bank FD.
bansal asked, Hello sir, Is it worth investing in ulip for a period of 3-5 years?
Sailesh answers, hi, ULIPS combine investment and insurance. I prefer to keep investment and insurance separate. Accordingly I suggest divrsified equity funds for capital appreciation and term plan for insurance. ULIPs are definitely not suitable for 3-5 years.
wi asked, Is Highest NAV return gauranteed ULIP good to invest
Sailesh answers, hi, there is no track record for such schemes. It is better to see if insurance companies live upto their promside before giving them any money in such schemes. Not recommended at the moment.
risc asked, I have no gold today. planning to have 250 grams in next 5 years for my daughters marriage. How should i plan.
Sailesh answers, hi, you should start investing some money in Gold mutual funds. you can either buy Gold ETF for which you will need to compulsorily open a demat account. If you dont have a demat account you can invest in Gold Saving Funds. You can spread your investment over 5 years.
Gunda asked, Sir, I want to invest in Recurring Deposit. Should I wait for some more time for RBI to raise interest rates further?
Sailesh answers, hi, in my view the interest rates have peaked. You should not wait for rates to go up further. Go ahead and start your RD.
john asked, i am withdrawing my ppf which 1.2 lakhs what options do i have to invest i can take moderate risk
Sailesh answers, hi, if you are willing to take moderate risk then balance funds would be ideal for you. Balanced funds invest atleast 65% of their corpus into equity and rest 35% into debt securities. Please note your investment horizon should be atleast 3 years to invest in balanced funds. HDFC Prudence fund is among the best balanced fund.
RAZAT asked, hOW FMP more than one year are taxed & expected return.Is it wise to buy NFO or existing FMP
Sailesh answers, hi, FMPs are debt funds. Long term capital gains are tax @ 10% without indexation or 20% with indexation whichever is lower. It is better to invest in FMPs during the NFO period
deepak asked, im 39 now and not invested a single penny as pension. Ive 2 kids. Pls suggest me how i can plan for .
Sailesh answers, hi, you need to go for comprehensive financial planning to ensure that all your financial goals are met. You should engage the services of a trusted and competent financial planner for this.
srdubey asked, I have invested in HDFC Equity, HDFC Midcap opportunity, ICICI PRU discovery, ICICI PRU tax, Relaince RSF equity, Relaince gold fund through SIP of Rs. 1000/- each. how is my portfolio.
Sailesh answers, hi, your portfolio overall is ok but it is skewed in favour of one fund house. you should add few more funds from othr fund houses like Fidelity, Franklin Templeton and DSP BlackRock
kohram asked, I INVESTED 5 YEARS BEFORE IN TATA AIG ULIP PLAN (15 year MF plan) FOR RS.3 LACS AT PRESENT VALUE OF MY FUND IS 3.40 LACS. Should I liquidate the funds?
Sailesh answers, hi, in my view you should not liquidate your ULIP now. ULIP is not among the best investment instrument. But having invested in ULIP you should continue with your premiums. going forward you should not invest in ULIPs if capital appreciation is your objective. Buy insurance plan only if you want to insure your life. Term plans are the best option in insurance.
kaul asked, Dear Sailesh,i am 37 years old,i am investing through SIP since 2007 in HDFC TOP200,ICICI INFRA,Reliance Growth,Reliance Diversified Power Sector,Sundaram select Mid cap,my investment horizon is till 2018,can take risk of volatility,pl suggest any changes in my investment schemes,want to make 1 crore from such investments,thans
Sailesh answers, hi, you should exit from sectoral funds like ICICI Infra and Reliance Power Sector. Diversified equity funds are better than sectoral funds. You may choose to invest funds recommended by me at the start of this chat.
wishnew asked, hi there is a lot of push on the Highest NAV return guarantee ULIPs closing end of the month..... should one opt for it? owing to the fact that the investment bankers would play too safe to ensure the fund is safe
Sailesh answers, hi,I would like to reiterate that investors should stay away from NAV guaranteed insurance plans. These instruments dont have a track record.
adhunik asked, Hi Sailesh. I have 5 lacs cash. Should I go for FD??? Should I invest in Nationalised bank or Multinational???
Sailesh answers, hi, if you are looking for safety of capital with assured returns then FD should be your ideal choice. Nationalised banks are preferred over multinational banks. If your investmen horizon is 5 years and more and willing to take risk then you can consider investing in well managed diversified equity funds.
Saurabh01 asked, I can spare 1000 rupees a month at present what investment scheme I should opt for a long term that could give me Handsome amount after 10 years?
Sailesh answers, hi, you can start SIP in diversified equity fund. You can expect an average annual return of 12% from well managed equity fund over 10 years.
xabc asked, I hold Birls sunlife Frontline equity fund & Midcap Fund, SBI Magnum Contra Fund,Rel Vision Fund, DSP BR-Top 100, & Bal,Rel.Reg Saving-Eq, Rel Div Power. How is this portfolio? If not good, which are the better funds in the same fund house for switch over
Sailesh answers, hi, you should exit from SBI Magnum Contra and Reliance Power Sector funds. You can add few more funds recommended by me at the start of this chat.
ghanashyam asked, 1 Cr after 10 to 15 years what kind of investement I have to do
Sailesh answers, hi, to reach your target of Rs 1 crore in 15 years you will have to invest a sum of Rs 24,100 (approx) in a mix of equity and debt in such a way that your average annual return is 10%/
SAMJI asked, Dear Sir, I am changing my Job and have accumulated close 4L PF money. I do not need that money now. Please let me is it advisable to withdraw money, put it stock market/MF OR just transfer PF new employer?
Sailesh answers, hi, PPF is your sacred money. I would not advise you to take risk with the same. It would be better if you transfer the same to your new employer.
vr asked, How long one should hold ULIP to make profit before exiting?
Sailesh answers, hi, ULIPS typically break even in 7-8 years. Ideally you should continue paying your premium till matuirty. there is no point in surrendering your plan midway.
nirja asked, Please reply to my question...Is this the right time to invest in a real estate in Mumbai or can we expect price corrections? Actually this seems to be a rumor but still, should I wait for the price correction or go ahead with buying a property in area like Thane GB road?
Sailesh answers, hi, I am personally of the opinion that Real Estate prices in mumbai are way to high to justify. If the econmomy slows down then there will be an impact on property price. I would like to adopt a wait and watch for real estate investment.
heman_udeshi asked, i have surplus everymonth 30000 what todo?
Sailesh answers, hi, you should sit with your investment planner and invest your surplus income into a mix of equity, debt and gold in such a manner that you are able to meet all possible financial goals.
amar asked, sir i hv home loan of 22lacs.taken 2yrs back @9.25% now it`s 12.25% and making my head spin to pay the instalments...advise how to get rid of this mess
Sailesh answers, hi, the only way out of this mess is to start repaying the loan as and when you have a surplus. If there is no surplus then you should take effort to increase your EMI by cutting down your discretionary expenses.
rishi asked, I have 1L which i do not need in next 5 year. where should i invest?
Sailesh answers, hi, assuming you are willing to take risk, you should invest Rs 2 lakhs in diverisified equiy funds, 2 lakhs in balanced funds and Rs 1 lakh in Bank FD
Saumil asked, Is it advised to invest in multibagger stocks at the start of my career as I have high risk appetite at this time and a longer horizon. Funds give returns but a few well-researched stock can outpace their returns in few years if the over all economy does good. What your say into this?
Sailesh answers, hi, it is true that investing in multibaggers can create wealth faster but identifying a multibagger is a difficult task. In my view one has to really rely on luck factor to get hold of a multibagger. A simple strategy eould be to invest 15-20% of your money into diversified midcap fund. Midcap stocks have often provd to be multibaggers. By investing in mutual funds, you will get the benefit of professional fund management.
Rajat asked, What do you say, PF in office for 20 years or SIP for 20 years(consider both the factors risk and reward)
Sailesh answers, hi,both are recommended strategies. You will have to strike a balance between the two. Both these investments are a must in portfolio.
Adavni asked, Hallav Sir, I am planning to retire in next 10 year, Current age in 37. How much do you thing I need to save with my current expenses can be satisfied by Rs 35000/month
Sailesh answers, hi, you need to get a retirement plan made for yourself with the help of a financial planner. According to me you will need a corpus of Rs 4.70 crores to ensure the current standard of living post retirement. This is assuming an inflation of 8% and life expectancy of 90 years.
Adavni asked, Hallav Sir, I am planning to retire in next 10 year, Current age in 37. How much do you thing I need to save with my current expenses can be satisfied by Rs 35000/month
Sailesh answers, hi, you need to get a retirement plan made for yourself with the help of a financial planner. According to me you will need a corpus of Rs 4.70 crores to ensure the current standard of living post retirement. This is assuming an inflation of 8% and life expectancy of 90 years.
samitmukherjee asked, Hi sir,I got Rs.600000/- after my retirement , please tell me where should i invest it to get maxm. monthly interest.
Sailesh answers, hi, you should probalby look at investing in 8% Post office Monthly Savings Scheme. IF you are a senior citizen (60 years and aobve) then you can even invest in 9% Senior Citizens Savings Scheme. This scheme pays interest every quarter. You can even consider investing in HDFC Ltd Fixed Deposit which offers monthly income scheme.
Priya asked, Sailesh sir, I am investing SIP in-HDFC Equity,HDFC prudence,ICICI Discovery,ICICI Blue chip,Birla Sun Life Dividend Yield Plus 1K each and 2k in IDFC Premier Equity Plan A ..is it good portfolio? I want to invest for 10-15 year..in future I want to invest in HDFC Top 200 and DSPBR Equity. IS all fund's r good?
Sailesh answers, hi, overall a good portfolio. you can invest in HDFC Top 200 and DSP BR Equity fund as well.
Ramarajan asked, Am planing to take home loan. Can i proceed to Natalised Bank or Brivate Bank. Please advise me
Sailesh answers, hi, you can approach any natioanlised bank which offers you the lowest rate. Please study the loan terms and conditions before finalising the deal.
FakirUstad asked, Do you expect major slowdown/recession in coming months? if yes, then what would be considered as smart investment in that period to rip better fruits in future?
Sailesh answers, hi, As far as India is concerned I am not expecting any major slowdown. Even if our GDF grows by 7% ours will be among the fastest growing economy. Having said that it is also important to note that from investment perspective especially in equity markets, we need foreign inflows. If there is slow down in westenrn countries or recession then we will see an adverse impact on foregin inflows and therefore a fall in the markets. We may remain in negative zoen for sometime but given our strong fundamentals, money will come to Indian markets sooner than later. In my view investors should invest in India with atleast 5 years investment horizon so as not to get disappointed.
Ag asked, I have a home loan taken at fixed int rate of 8.75 taken 5 yrs back. I have surplus money to prepay, should I go for it or use the surplus elsewhere and continue with the loan as it offers the tax advantage as well.
Sailesh answers, hi, if you have surplus to prepay your home loan, go ahead and do it. Please dont wait or look for some other lucrative option to invest your money.
KKKKKKKKK asked, Dear Sailesh, I am 37 years old and investing Rs 1000 each in a) HDFC Top 200, b)IDFC Premier Equity Fund - Plan A - Gr , c) Birla Sun Life Equity Fund - Gr, d)Birla Sun Life Midcap Fund - Gr ,e)Reliance Infrastructure Fund - Retail Gr, f)Sundaram Financial Services Opportunities Fund - Gr since 2009.g)Reliance Natural Resources Fund - Gr My investment horizon is 2015. Please suggest any changes in my investment. Thanks
Sailesh answers, hi, overall good portfolio but please exit Reliance and Sundaram funds.
hi_prabhat asked, I have taken a ULIP in Jun 2006 (HDFC Endowment Plus). The premium is 8000 per month. SO till now the invested amount is 5,12,000 and the return is 5,60,000. I am not happy with its performance. SHould I continue invest in this or stop ULIP and invest in MUtual Fund? Please suggest.
Sailesh answers, hi, continue with your ULIPs. But going forward dont buy ULIPs if you want to grow your money. Diversified equity funds are best equipped to gorw your money.
hi_prabhat asked, I have taken a ULIP in Jun 2006 (HDFC Endowment Plus). The premium is 8000 per month. SO till now the invested amount is 5,12,000 and the return is 5,60,000. I am not happy with its performance. SHould I continue invest in this or stop ULIP and invest in MUtual Fund? Please suggest.
Sailesh answers, hi, continue with your ULIPs. But going forward dont buy ULIPs if you want to grow your money. Diversified equity funds are best equipped to gorw your money.
Manish asked, Is Liqudity fund taxable after investing for more than 1 year? Which is best liquidity fund to invest for shorter term?
Sailesh answers, hi, yes appreciation from liquid funds is taxable after one year. Liquid funds are not ideal for investment horizon of one year. If your investment horizon is one year then you should probably look at ultra short term income fund or short term income fund. I recommend HDFC Cash Management Fund in the liquid fund category.
Sailesh says, We have run completely out of time. I thank you all for participating in this chat. If you have any questions which were not answered during the chat, please mail them to me at sailesh.multani@gmail.com.
Are you always at a loss while planning your finances?