The much anticipated Budget announcements are over. The entire Opposition walked out from the Lok Sabha in protest terming the Budget as 'inflationary'.
The FM changed the slabs cutting the rate to 10 per cent for income up to Rs 500,000. The tax concession the FM said will give more money in the hands of the people.
But raising the duties on petro products will automatically hike the cost of petrol and diesel, which will not only hurt vehicle owners, but prices all around will also rise.
What effect will the Budget have on your investments? Is it the right time to make new investments?
In an hour-long chat on rediff.com on Tuesday investment expert Lakshmi Iyer offered some valuable tips. Here is the transcript:
Lakshmi Iyer says, hi all this is lakshmi here
Manoj asked, Interest rates? Any idea when they are going to change?
Lakshmi Iyer answers, at 2010-03-02 16:00:12rbi seems to be on the path to normalise int rates hence we could expect rate tightening starting Apr 2010
jpr asked, which sector is good for next one year.
Lakshmi Iyer answers, post the direct tax benefits accruing to the salaried class, consumption as a theme is likely to do well..also banking as a sector is likely to do wel. infra is another pack which holds some promise
tmajumder asked, what do you think, interest of bank FD will increased during March 2010
Lakshmi Iyer answers, march has been a period of tight liquidity due to advance tax outflows hence rates are likely to inch up includg FDs
Somi asked, Will we actually manage to save taxes? Will inflation not eat away most of what we may save?
Lakshmi Iyer answers, inflation is currently an issue but post June due to base effect it shd taper off to 5pc lvls. also right asset allocation vl go a long way in beating infln in long term
Prabhat asked, Dear Ms Iyer, what you think of the Budget? Is it good from a long term investment strategy for a salaried person? Or should we take a short term view? Thanks
Lakshmi Iyer answers, i think overall the budget has been pro growth so the long term story remains intact..true wealth creation happens only by being long term invested rather than taking short cuts in invsts
Jeev asked, I plan to invest in MFs. Is that a good idea?
Lakshmi Iyer answers, MFs offer a wide range of products to suit investor preferences..hence knowing what ur risk appetiite is and deciding which asset class to invest in is critical..hvg decided that MF is definitely 1 vehicle u shd consider fr invsts
Ramakant asked, Hello. How much money will I be able to save this year after the new tax proposals by the FM? Mt gross income is Rs 9 lakh and I will invest the entire Rs 1.20 lakh allowed by FM. Please help.
Lakshmi Iyer answers, u vl need to sit with ur tax planner/ CA fr the same...
Jogi asked, Will this budget fuel inflation? So our FDs will be affected?
Lakshmi Iyer answers, anythng oriented towards growth could tend to be inflatinary..so that remains a concern. hwever the imapct of the same can be moderated thru measures on the monetary and fiscal front
kanta asked, Hi, how will this budget affect us tax payers?
Lakshmi Iyer answers, as stated budget hs been benevolent on the direct tax front so its +ve
pkranthi asked, I have a 1lakh surplus every month. What do you suggest to be my investment plan?
Lakshmi Iyer answers, i suggest u sit wth an investment adivisor with ur monthly inc / exp statement who would defi b able to guide u as the process is a bit elaborate
anunaya asked, Hi Laxmi, can u name few stocks which would get maximum benefit after budget.
Lakshmi Iyer answers, as stated earlier the consumption story looks good as also banking infr space
ashwin asked, what do you think about the market will it go up and acheive a new high or a new low
Lakshmi Iyer answers, budget is clearly growth oriented and hence +ve for mkts over long term
finmin asked, What levels do you think the 10 yr benchmark would peak ? Would it be better then to enter long duration funds ?
Lakshmi Iyer answers, due to supply pressures 10yr could test 8.25-8.5 lvls from the current 7.9%. we bel this would b a good time to time entry into duration funds
praveenogh asked, hi, how do i invest in infrastructure bonds that is where can i buy them?
Lakshmi Iyer answers, infra bonds shd b avail with any broker
besmart asked, Mam, What is the road map to implement DTC in 2011?
Lakshmi Iyer answers, finer details on DTC implementation r awaited
Dora asked, For a 1st time investor what is your advice? Which type of MF should i invest in? I have about Rs 100,000
Lakshmi Iyer answers, thr is no short ans to this..u need to sit across with a financial planner/ advisor and discuss the same based on ur time horizon risk appetite etc
Abhishek asked, Good Afternoon Ms Iyer, It is good time to invest in equity or wait & watch.
Lakshmi Iyer answers, eqty has always been rewarding from a long term perspective...SIPs are a good otpion to avoid the need to time the market
rti asked, Can a joint home loan be used for tax exemption by both husband and wife for the entire interest upto 1.5 lacs?
Lakshmi Iyer answers, dont tjink so..u need to consult a tax expert
Sandeep1 asked, What would be the best investment strategy for a 50-year-old with an annual income of Rs 10,00,000? I already own a home for which i pay an EMI of Rs 15,000 per month and will need to do so for another 5 years. I also have a car loan of EMI Rs 6,000. No other investment, except some small insurance.
Lakshmi Iyer answers, sir an investment planner would chalk out ur investment strategy based on the details u share
sankar asked, Like BSE, NSE stocks How can I trade MF units? What are the websites providing MF online trading.
Lakshmi Iyer answers, currently most fund houses hv their schemes listed for trading on BSE / NSE. u could check out the site for details. other platforms r being worked out to facilitate mf units trading
Ashu asked, Hey Lakshmi, Can you exactly tell me how i will benefit by the new tax codes if my package is 6 Lacs PA if i use all my 80 CC for investments?
Lakshmi Iyer answers, details on DTC r awaited
rflobo asked, i am new for share market now which sector is good & which company share purchased
Lakshmi Iyer answers, would suggest u invest in a diversified eqty fund as fund managers would do the job of stock / sector identification fr u
kumar asked, i want to invest monthy 1000 rs which is best investment in long run ?
Lakshmi Iyer answers, u could start an SIP in a diversified eqty fund wth a good track record
INVESTMENT asked, Hi Ms.Iyer kindly suggest me difference between Investment on Mutual fund or health insurance. Can I get both under one plan. I have LIC 2 numbers & some FDS. Please advice me
Lakshmi Iyer answers, health insurance is pure premium paid for protection of health related hazards.while MFs are pure invst vehile trying to aid u in wealth creation. u need to chk for funds whch also offer u health insuance with MF invst
firstname.lastname@example.org asked, what is your view which is best MF to invest through SIP this year which sector
Lakshmi Iyer answers, as i said a fund wth a good track rec can b looked at for invsts
badri asked, hi what is the status of Income fund now if the tenure is 6month
Lakshmi Iyer answers, income funds are recommended with invst horizons of 1yr and above..6m may b avoided as mkts r volatile and int rates r headed upwards
Raghu asked, Is this right time to invest? i normally invest in equity MF. Does it make sense to wait till 2h 2010
Lakshmi Iyer answers, we do not adivse to time th mkts..u could avoid the need to time the mkts thru SIP invsts
ravindra asked, hi madam i am interested invest in stock mkt for 3/4 manth pls advis any 4/5 stoks
Lakshmi Iyer answers, stock mkts r meant for long term invstors and not fr very short horizons..
SKV asked, Hi Fringe benefit (ESOP) is taxable ?
Lakshmi Iyer answers, yes
Rohany asked, SIP, any strategy to phase the monthly payments?
Lakshmi Iyer answers, SIP STPs are best recommended to do invsts in a phased manner
bipin asked, I am 55 yrs, what is the best option for pension after 60
Lakshmi Iyer answers, u could look at the NPS.or alternate look at monthly income plans which hv a reasonble good track record of paying timely divds
finmin asked, Does Kotak Mutual have any scheme which does not invest in PTCs?
Lakshmi Iyer answers, yes v do.. the schme is Kotak Floater Long Term
ps asked, Hello Madam... I am interested to invest in stock mkt for 2 to 3 years. Pls advise any 5 - 7 good stocks...
Lakshmi Iyer answers, u could invest in a diversified eqty fund
Yogesh asked, I am planning for a home loan. Will this budget affect home loans in any way? Also in long run, Fixed or floating rate home loan will be beneficial for me?
Lakshmi Iyer answers, in a rising int rate scenario locking into fixed rates makes more sense
harjit asked, 1. Am interested to plan some healthy ONE TIME investment for my 5 year old child, which can deliver me safe and good returns after 10 years from now. 2. What are the prospects of Share market from now on for next 3-4 years?
Lakshmi Iyer answers, since u hv a long term horizon eqty mkts invsts r recommended.hwever pl bear in mind tht thy r risky investmnest hence the time horizon reqd is longer. mkts do look good fr next 3-4 yrs
naveen asked, Why should young people go for term insurance? if there is no risk of death in their daily life routine
Lakshmi Iyer answers, a term cover is a pure risk cover to manage any forseen event..at lower age the premium is lower hence recommended..
finmin asked, Does Kotak Mutual have any scheme which does not invest in PTCs?
Lakshmi Iyer answers, yes v do ..i hav already answered it..you could chk our factsheet on our webite kotakmutual.com
kaustav asked, I have received 1200000 from my company as severence. I have already invested in MFs...how do I invest this large sum of money.
Lakshmi Iyer answers, finacial plang is an elaborate activity and cant be sorted out in a limited period over chat..u vl need to plan out this invstment across various asset classes etc alongwth a planner
lpll asked, What is the future of Power sector Mutual Fund? Should one stay invest in this sector?
Lakshmi Iyer answers, there is genuine power shortage in india and as such power within the infra pack is likely to do well
naveen asked, While investing in MFs, what matters most? portfolio of Bank or portfolio of fund manager
Lakshmi Iyer answers, lot of things..track record of the fund house offering the prodcutt, the pfolio quality and the person managing it
mukesh asked, hello i want to invest in gold pl sugget method how i get maxi profit
Lakshmi Iyer answers, gold can b bot physically from banks or thru ETFs that are listed on the exchange. alternate u could also trade in gold thru futures...
sharma asked, Dear, As per this budget "Deduction of Rs. 20,000 for subscription to investment in long term infrastructure bonds which will be notified by Central Government. This deduction will be over and above existing limit of Rs. 100,000 under section 80C, 80CCC and 80CCD." Do these schemes are available now. Can u suggest best available.
Lakshmi Iyer answers, dont think any r available now..u need to chk wth a broker fr details
idris asked, I want to know Islamic(shariya) tax exempting investment in the curretly available in market
Lakshmi Iyer answers, shariah invsts r not very popular in india as against other countries..thr a couple of them offering them here in india too
Sudharsan asked, If I invest 5,000 Rs every month for next 20 years. How much can I expect as my pension from this investment. Can you suggest for a good pension plan ?
Lakshmi Iyer answers, the pension system details r avail on the NPS website..u may chk the same
anunaya asked, can u be more stock specific....u can atleast mentione few stocks from infra consm and banking
Lakshmi Iyer answers, cant comment on stocks..v gv guidance on overall sector
siva123 asked, hi! with interest rates set to raise, what's the ideal Debt related investment approach; pls suggest debt funds (intend to hold on for atleast 3 years)
Lakshmi Iyer answers, over the past few yrs despite rising int rates debt fuds hv delivered decent performance..bond / gilt funds are recommended frm a long term invst perspective
finmin asked, I think Gold ETFs are not suitable for long term investors. If one buys and holds for 10 yrs, effectively the cost is 10%. A locker is much cheaper. Whats your view ?
Lakshmi Iyer answers, yah the annualised cost charged by the scheme has to be borne by the investor but the storage / insurance is taken care of as it is paper holding so no fear of theft etc
sitaram asked, is it the right time to buy home? will the interest rates increase after march 2010? sbi and hdfc have already informed is it true?
Lakshmi Iyer answers, rates in india are on the rise..also rental ylds in india are low so owning property is a better thot
SUDHIR asked, WHAT ARE THE BENEFITS OF NPS NOW AND FOW HOW LONG IT SHOULD BE CARRIED OUT
Lakshmi Iyer answers, nps is avail upto the age of 60 is a good option for long term investments..details cn be found on pfrada.org unfort it still doesnt qualify for EEE as it is EET
JFK asked, will the gold price go up or down ? please advise, becos i want to invest in gold.
Lakshmi Iyer answers, fundamentals of gold r intact for a rally and much higher gold prices in future..near term volatilites cant be ruled out...
finmin asked, Why are silver ETFs not available in India ?
Lakshmi Iyer answers, regulator needs to see the success of gold etfs which they hv allowed a couple of yrs back..also silver since volumes r huge storage could b a problem..but v r optimistic
eekam asked, Hello Lakshmi What is an Index Fund?
Lakshmi Iyer answers, index fund is a passive fund that invests in the same proportion as the underlying. ther is no fund mgr involved..its pure mkt linked
Lincon asked, can you tell me this is right time to invest stock or not
Lakshmi Iyer answers, eqty investments r meant for the long term.. mkts hv been largely flat ahead of budget.so thr could be near term rally
Lakshmi Iyer says, thanks a lot..it was a pleasure interacting witu u