Are you the one who doesn't understand much of finance? Do numerous MFs as well as other investment 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, Good afternoon everyone!
amittendulkar asked, hi if you provide advise on tax and financial planning ... can u advice , income is 14 lacs.have taken rebate of housing loan interest 150000 and 10000 on of .. can I manage tax better .. tax outflow is 20000 per month after all this tax saving investments
Rahul Goel answers, at 2007-09-13 12:55:27amit, hi. it is best that you pose this question to a professional tax consultant.
amittendulkar asked, hi if you provide advise on tax and financial planning ... can u advice , income is 14 lacs.have taken rebate of housing loan interest 150000 and 10000 on of .. can I manage tax better .. tax outflow is 20000 per month after all this tax saving investments
Rahul Goel answers, amit, hi. it is best you post this question to a professional tax consultant.
samar asked, What are the best mutual funds available in the market? Which funds accrue maximum profits? Which funds provide the best SIP options
Rahul Goel answers, samar, hi. that would depend on what your needs and profile are. a scheme which may be the "best" for me, may not be good for you. we spend a lot of time educating people in this regard. do not invest in what is best; invest in what is best suited to you.
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 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. Also, my monthly take home salary is Rs. 52000/- Is this much investment enough for my retirement and childs education? Can you suggest me how better I can organize my portfolio? Regards Vikas
Rahul Goel answers, vikas, hi. a couple of points to note. One, you have excessive exposure to sector funds. in our view, one should not invest in such funds at all. the other point to note is that you do not have any investment in franklin schemes. a fund like franklin flexi should definitely form a part in a equity fund portfolio. finally, you need to get the allocation between different schemes right. now coming to the planning needs; whether this is sufficient or not will depend on the number of years to retirement or to your child going to college. start investing for these needs as early as you can; the more you delay, the more challenging it will become.
aayush asked, Dear Sir, I invest in Standard Chartered Enterprises fund and UTI Life Style Fund, pls. tell me what is the future of two funds and i want to invest in SIP, which is best fund for SIP perpose.
Rahul Goel answers, aayush, hi. if you were a client of personalfn we would have ensured that you do not invest in these funds in the first place! having said that, we do not think either of these schemes should form a part of your core equity fund portfolio.
tanu asked, hi there whether ulip's are good or term plan plus mutual funds
Rahul Goel answers, tanu, hi. in nearly all instances, you will find term + mutual funds to score better. there are rare instances where ulip may make more sense. i recently got a call from a insurer trying to sell me a ulip saying that it was a mutual fund!! so you know what is better!
michael asked, Hello Rahul. If equity investment is for the long term then why some advisors still say that there is no need to switch from dividend reinvestment option to growth? What is the correct advice? Please clarify.
Rahul Goel answers, michael, hi. this is what i think. if you do not have need for money in the near term, simply let the money accumulate i.e. go for the growth option.
Mahen asked, Hi Rahul, I have around 1 lakh to invest and i need half of it in the next 6 months and rest of the money in 11 months. What do you suggest, where should i invest?
Rahul Goel answers, mahen, hi. the best option for you probably is the fixed maturity plan. these are negligibe risk instruments. take the plans which suit your liqidity needs. in case you are in the lowest income tax bracket, or pay no tax at all, also consider fixed deposits.
debraj asked, Hi Rahul what is the maximum amount u can invest??1 lakh or 1.1 lakh??
Rahul Goel answers, debraj, hi. i think you are referring to investments under section 80C. that would be rs 100,000 per year. there are other provisions which may entitle you to invest some more money to save tax; but that is not under Section 80C.
rahuls asked, I have invested in mostly equity. 34% in ELSS and remaining in secondary market. in stocks, my portfolio has 4.4% Power Generation(RNRL), 7.8% Petrochemical (Rel Petro), 30.4% telecom (rel. comm), 5.1% air transport(jet, deccan), 14% Bank PSU(SBI) and 38% Construction (GMR Infra, Omaxe, DLF; in the reducing percentage share in this category). Please comment. Is this right portfolio for medium to long term...?? I am also planning to buy slowly(on declines) some more share in aviation and hotels as I see aviation and hotels bright in long term. what do you say ??
Rahul Goel answers, rahul, hi. i am unable to comment on individual stocks. but since you are managing money on your own, i trust you have several hours a day that you can dedicate to this activity.
sanoj asked, Hi Sir,I want to invest Rs.100000 for 6 years with the dividends reinvested.Which will be the best mutual fund option to get maximum returns at the end of 7th year and how much will i get approx.?I prefer a agressive fund
Rahul Goel answers, sanoj, hi. first if you wish to invest for 7 yrs, and do not have need for near term cash flows, then best to opt for the growth option. now coming to returns. i think it is reasonable to expect a return of no more than 15% pa over this period from a well managed equity fund. even though you wish to be aggressive, opt only for the well diversified equity funds; give a miss to the sector funds.
moyanka asked, hi if we are investing in mutual fund so in which scheem we get tax rebate and hiehg return also
Rahul Goel answers, moyanka, hi. some funds, which are called equity linked savings schemes (ELSS) offer you some tax benefits. these have a lock in for three years and invest in the stock markets. over 3-5 years such funds, if you select the right one ofcourse, should be able to deliver you about 15% pa returns.
harsh asked, We are working couple 37 and 34 years old with 02 kids 6 and 3 years and stay in our ancestral house in Delhi and wish to buy a plot in BPTP, Faridabad which will cost 30 lacs of which I can make down payment of 12 lacs and balance 18 lacs on loan for 15 years. I seek your advise I should go for this option or should I invest 18000/- per month (which is almost equivalent to the EMI of plot) in mutual funds / SIP etc. The main aim is to build capital at the same time if can own a piece of land would be great. We earn approx 8 lacs per annum and our annual liability is approx 3.5 lacs. Also how do see the growth of property in Faridabad in comparison grown in funds
Rahul Goel answers, harsh, hi. without commenting on the property price in faridabad specifically, we are overall bearish on property. you will need to study the local market to get a final view. with regards to whether you should buy property or invest in funds.... over the long term it is most likely that equities will outperform real estate when it comes to generating return. the other advantage is that when you buy the property you are exposed to just one market - faridabad. you cannot diversify in property and then there are a lot of maintenance related issues. if you are looking for a better return, and less of a headache, maybe mutual funds will be better. but before you take a final decision discuss this in more detail with your financial planner.
rahul asked, I want to invest in mutual funds.But I m pretty sceptical abt dng it.So can u advice?Which is the best mutual fund which can give me maximum profits at the end of year?What are my long term benefits that i can reap?
Rahul Goel answers, rahul, hi. i recommend that rather than investing in funds just because i am telling you that so and so scheme is good or not, i suggest you find yourself an honest financial planner and understand this investment opportunity in detail.
arun asked, Which is a good opportunities fund to invest in. I have investments in HDFC Prudence, FT Prima, Reliance Vision, HDFC Top 200 and Mangum Taxgain, and feel investing in an opportunities fund will add some fizz to my portfolio.
Rahul Goel answers, arun, hi. well, if you wish to invest to get some fizz in your portfolio, its entirely your call! on a lighter note, don't forget the fizz runs out as fast as it starts!
ganpath asked, Sir, I am aged 40 years and having 2 children. can save upto 50,000 per annum. Can I go for HDFC children Care and Pension Plan.
Rahul Goel answers, ganpath, hi. you are considering investing in a ulip; there is nothing wrong with that. have you understood the cost structure completely? be sure before you commit monies to a ulip.
sutsi asked, should i sell sbi blue chip??
Rahul Goel answers, well, to start with we had not recommended this scheme to our clients. we recently posted some research on this scheme on personalfn.com. the performace definitely leaves a lot to be desired.
fgdfgd asked, is investing in tax saving FD's advisable?
Rahul Goel answers, this would depend why you are investing and also your overall profile. if you can take risk and need to grow your money, then FDs are not the right choice for you.
sa asked, Do you think this is the best time to invest in mutual funds?
Rahul Goel answers, sa, hi. anytime is a good time to invest. but where you invest is most important in our view.
sharat asked, I am Investing Rs.50000.00 every year in Tax saver Fund since three years to get Tax Benefit. This I am planning to continue for another Three years. Is it OK or shall I go for other tax benefit schemes?
Rahul Goel answers, sharat, hi. have atleast two schemes in your tax saving portfolio.
ajit asked, Hi rahul,i have 24k to invest for tax planning.I have already invested in LIC and ELSS.So as per you where should i put this 24k,PPF or Pension Fund like Frankin pension fund?Pls advice.
Rahul Goel answers, ajit, hi. maybe you need to put the Rs 24k exactly where you put the rest of the money! you do not have to invest in new instruments. the precise answer of course will depend on your profile and needs.
sanjieev asked, Goodafternoon arun..I am a M28, with CTC of 7L and with no liabilities for next 2 years...would it be good to invest 80% in equity(30% direct stocks+50%MF)with a time horizon of 5+ years..??
Rahul Goel answers, yes, for such a long tenure, a predominantly equity portfolio will suit best. since you plan to invest directly in stocks, be sure you have enough time to manage your portfolio.
JAGADEESH asked, What should be the performance of NFOs of AMB Amro China Fund, ICICI Asia Fund etc? Will they similar to other NFOs or give any special advantage to us?
Rahul Goel answers, jagadeesh, hi. as has been personalfn's view with all the global funds launched so far, we are not going to be telling our clients to inevst in such funds. we recently wrote a note on why are not liking anything out there in this space. you may want to read it on www.personalfn.com.
Anamika asked, Gud Afternoon Rahul, I have about 20 K of gift money lying with me which I wish to invest for the kids for use 5 years later. I want to distrubute it in 5K each . Which MFs' should I consider ? Which is thebest SIP for Rs 2000 for 3 years?
Rahul Goel answers, anamika, hi. well, i think you should consider schemes like hdfc equity and fr flexicap. avoid sector and thematic funds. keep the portfolio simple. best would be to employ the services of a finanical planner... that will rid you a lot of the worries.
SEEMA asked, HELLO SIR, I am seema , i recently got married ,both of us working in a pvt ltd company,wish to buy a a plot or flat in perambur near chennai city which costs 15 lacs ,i wish to buy only after 4 years.keeping in mind about the inflation rate and the increasing real estates values i can afford to make the down payment for only 5 lacs and for the bal i can go for the loan where i can pay an emi for 9000.The main aim is to own a piece of plot .My monthly expenses are 5000.our salary comes to 20000.how to plan our salary to make our dream comes true with this little salary .Kinldy advise me.Regrds SEEMA
Rahul Goel answers, seema, the answer is simple... save as much as you can; invest the monies in well managed mutual funds; since your tenure is about 4 yrs, you can opt for equity funds. over time, disciplined investing will help you reach there.
Ravi asked, Hi Rahul, We (DINK couple) make 27L /annum but not able to decide on owning home. Shall we live in a rented apartment or buy one?
Rahul Goel answers, ravi, hi. well, ultimately you may want to own one property; but then this may not be the best time to buy one! where are you investing the monies currently? is the allocation done thoughtfully or are you just investing where some friend tells you to?!!
abcxyz asked, Is it advisable to invest in ELSS funds even if I do not require Tax saving instrument. Peformance of ELSS is similar to other equity funds.
Rahul Goel answers, maybe yes. since these funds have a lock in, the fund manager has more flexibility in planning his investments. having said that i would prefer an open ended fund so that in case there is an emergency the money can still be taken out.
SARMA asked, Why there is no uniformity in ULIPs unlike in MF and can IRDA learn something from SEBI in cracking whip on life insurance companies who are notoriously wrong-selling
Rahul Goel answers, sarma, hi. i think all of us share the concern of mis-selling. lets hope the regulator does something about this. but this does not take away the fact that since we are investing our money, we need to take well informed decision. this requires study and/or an honest financial planner.
SP asked, Hi Rahul, Please suggest a good pension scheme for my husband (aged 33). The only insurance investment he has is in Jeevan Shree taken abt 6 yrs back. We pay 18K per mth as EMI for housing loan. Other investments such as PPF and SIP come to 10K per mth. Pls suggest some good scheme for retirement planning.
Rahul Goel answers, hi. since you have maybe about 25 - 30 yrs to retire, one option you have is to build a corpus by investing in equity funds and then later shifting the money to instruments which can generate monthly income. this will require some discussions with your financial planner. before you commit monies, be sure of what you are getting into.
Sangeeta asked, Hi Rahul, I've an outstanding housing loan of 35 lacs for which I'm paying 36000 emi. Do you think it's a good idea to preclose the loan. If I don't at the end of 20th yr, I'll be paying out almost 85lacs towards it. Please suggest
Rahul Goel answers, sangeeta, hi. as we have discussed several times in this chat, whether you wish to prepay depends largely on you. if you are not comfortable with having a liability on your books, simply pay it back. else keep it, and invest your surplus in assets which will hopefully earn more than the interest on the loan.
Jeevan asked, DO ELSS FUNDS QUALIFY FOR TAX DEDUCTION UNDER SECTION 80C? For eg: Principal Personal Tax Saver Fund?
Rahul Goel answers, jeevan, hi. thy do qualify for this tax benefit.
Pravy asked, I want to accumlate 50 Lakhs corpus after 5 years. Please advise what kind of investment i have to make in SIP. i have taken 500Rs/month sip for SBI TAx gain , 1000Rs/Month SIP for HDFC EQUITY & 1000rS/MONTH SIP FOR RELIANCE VISION FUND. Where else do you advise me to invist to have a corpus of 50 lacs after 5 years.
Rahul Goel answers, pravy, hi. assuming you wish have a maturity value of rs 50 lacs in five years, you need to set aside about rs 60,000 per month in instrumnts which can return you about 15% pa. so invest keeping this in mind.
Jayesh asked, Which is the best long-term investment option in Debt if I want to get regular income? MIP or Short-term Funds with Dividend Payout or SWP?
Rahul Goel answers, jayesh, hi. if you can take some risk for for the low risk mips, with a qtr div payout. but if you do not want to take any risk go in for fixed deposits.
saurav asked, Hi Rahul , I live in Kualalumpur (indian citizen)and want to invest in Indian mutual funds , how do i do it sitting from here
Rahul Goel answers, saurav, hi. the investing part is easy. first you should think about where you will invest!
Shankar asked, Hi Rahul, thanks for your time. I have in portfolio HSBC Ad India (SIP), UTI Leadership (single), Reliance Equity (single), SBI Midcap (single), Fidelity equity (single), Franklit Prima (SIP), HDFC Long term advantage. 1) I am not sure if my distribuiton are adequately diversified 2) I would like to restrict my funds to a max of 5. Please suggest which ones should i continue with.
Rahul Goel answers, shankar, hi. your portfolio in all probability needs change; quite a bit of it. for me to be able to guide you precisely, i will need to know more about you.
aayush asked, Hi, thans for yr. suggestion, no i am a client of personalfn, but, my second question is what is the best equity fund in SIP plan........
Rahul Goel answers, oh! how i wish you were!! if you are looking at a long term plan, then consider having schemes like hdfc equity and fr flexi in your portfolio. do not have more than 5/6 schemes; and of course, avoid nfos.
arunvs316 asked, Hi rahul, Do you really think financial planning as a concept will be popular among indian masses? what do you think is the biggest challenge Financial planners will face?
Rahul Goel answers, yes, it is a necessity. the challenge is the same for everyone - giving honest and credible advice, backed by great service.
Ana1 asked, What do u mean by FMP and which is the best one?
Rahul Goel answers, FMPs are fixed maturity plans; these are effectively close ended debt funds.
jyoti p asked, is mutual fund the right product for retirement planning? if so, what should be mix of equity and debt for this purpose?
Rahul Goel answers, jyoti, hi, suppose you are to retire 30 yrs from now; you need to accumulate money, right. the best place for such long term investments is the stock markets... so most of the money you save should go there. next should you invest directly or via funds? this would depend on how capacitated you are and how much time you have to manage your onn portfolio.
dalalnirav@rediffmail.com asked, is it true that large cap funds should form the core of your portfolio? Can you suggest 2-3 good large cap funds.
Rahul Goel answers, yes, in most instances. fr bluechip is a fund we like. but having said that, i would still prefer to be invested in a diversified equity fund.
Emsysprof asked, I am 37 years old earning 10 Lakhs per annum now. How I should plan, if i wish to lead a happy retirement life after 55 years
Rahul Goel answers, well, to ensure you have a happy retirement life, employ the services of an honest finanical planner! frankly, its difficult to do this over email... on personalfn you will find a guide to retirement planning, which you may want to read.
Prasad asked, I brought DSPML technology.com @ 30.50 before 5 months, but it is declining since then, shall I hold? If yes for how much time?
Rahul Goel answers, prasad, hi. in our view one should not invest in sector funds. they are inherently volatile and do not deliver the risk adjusted return they should over the long periods of time.
SEEMA asked, susanne, hi sir, gud after noon to u, i want to build a corpus of 20 laks after 5 years , how much i hav to save per month to build this corpus i want this corpus to buy a plot .my sal is 15000 per month ,my expenses per month are 8000.is my expection above than my income .
Rahul Goel answers, seema, hi. you need to invest about rs 23,000 pm in assets yielding about 15% pa return. since you do not have this surplus do not stop your plan. continue investing; put in more money when you have more liquidity to make up for this shortfall.
navin asked, Dear Rahul, Hope you will certainly help in my problem. I have invested in Standard Charter Equity enterprise fund. During IPO the fund claimed that they will invest in IPO of stocks, however I see they do not have any share of recent IPO's, there is lockin of 3 yrs. Please tell me whom should I approach for this breach of trust. Thanks.
Rahul Goel answers, navin, hi. you can write to us at info@personalfn.com and we will forward to sebi. or you could write to sebi directly. their web site is www.sebi.gov.in
vijaysh asked, sir, i want to invest in Bank FD .can i get tax benefit u/s 80c
Rahul Goel answers, not all fds give this benefit. be sure to select the fd which offers this benefit; your banker will be able to guide you.
rajeshrao asked, I would like to gift my son(1year old) on his birthday with an one time investment scheme, which would be helpfull in his future. Please advise me what are the schemes available, and your valuable suggestion on this. thanks in advance.
Rahul Goel answers, rajesh, hi. best would be to put the money in a basket of well managed and well diversified equity funds. i have discussed some names earlier. but get the allocation right... speak to your financial planner.
sudip asked, I have 2 crore rupees to invest. Currently I have invested 75 Lakh in equity (MF and direct stocks), 10 Lakh in NIFTY linked debenture, 10 Lakh in Crayon Art Fund, 5 Lakh in US Savings, 1 Crore in FD for 1 year @ 11.75% interest. I am 35 years old and married with two small children and service is my occupation. Please suggest if I need to change my portfolio.
Rahul Goel answers, sudip, hi. with the surplus you have you will have your private banker on the phone all the time! no wonder you are invested in such exotic funds! In our view, these funds are best avoided... i am referring to the art fund and also the debenture. a large part of your money is in an FD. i am not sure why... i think you should aovoid investing ad hoc and talk to some financial planner.
Sutapa asked, I have the plan to invest Rs. 50000 in mutual plan. Is it right time to invest in that? whether it is worthy to invest in one fund or a couple of fund. what re the fund to invest?
Rahul Goel answers, sutapa, hi. best way to invest is to do so regularly in small amounts; have a portfolio of about 5/6 schemes.
karthik asked, Hi Rahul, My CTC is 4.2 L, and as if now i have not invested in any thing.. From last decmember I have started working and I want to investment for Tax gaining as well as future need.. Please suggest what steps I need to take from now on..
Rahul Goel answers, karthik, hi. best step would be to find yourself an honest finanical planner. since you are liquid and are not sure what to do with your money, it will not be long before agents/disributors start throwing ideas at you...ideas which many money for them!
vilbee asked, Hi Rahul I am 32 year old female and have 50 lakhs in savings and investments, and own my home (debtfree). I may quit working soon and assuming no further income flow, and annual expense requirement on 2 lakhs per year only, what should I do with my fund of 50 lakhs with a view to safely increase wealth
Rahul Goel answers, vilbee, hi. with the kind of surplus you have, you should have no difficulty in meeting montly needs and also ensuring that your capital grows. the obvious idea for investing this money is a small portion in mips, maybe some in fds (as you can avail the return tax free upto a limit) and the rest in riskier instruments.
AAAA asked, Should one avoid sector funds via SIP?
Rahul Goel answers, one should avoid sector funds, whether you are investing via sip or lumpsum.
Ravi_Kiran asked, Hi Rahul, Good Afternoon. What's your view of latest NFOs Fidelity Growth, ICICI Pru Indo Asia Fund...?
Rahul Goel answers, ravi, hi. we have recommended to our clients at personalfn to give a miss to both these funds.
amitpaithankar asked, Hi Rahul, I have made some investment in whole life insurance policy. should i continue with this or choose another policy?
Rahul Goel answers, amit, hi. depending on the cost, you may want to continue it. i hope its a pure risk policy...
Ravi_Kiran asked, At personalfn, the latest article about global funds is really good. As you suggested in the same, as of now do we have any global funds that invest not only in emerging (ex. asian) markets but also in all variety of economy...?
Rahul Goel answers, thanks ravi. no, as of now, we do not have any such gobal fund.
venkat asked, what is your opinion on tata indo global infrastructure fund
Rahul Goel answers, venkat, hi. i think you should avoid investing in this fund as it carries very high risk... unless of course you have the appetite for it.
Rahul Goel says, Thank you all for participating in the chat. In case you have any further queries, you can always be in touch with personalfn at
www.personalfn.com.
Chat with Rahul every week! To read more transcripts, click here!
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