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How to invest wisely with little money

September 23, 2009 17:56 IST

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 a chat on Wednesday, financial planning expert Sailesh Multani offered some valuable tips. Here is the transcript:

Sailesh says, Goodafternoon everyone, lets start the chat session

vipin asked, I am a small person. I would like to invest Rs 200 per month in my 11 year old son;s name. is it possible in SIP
Sailesh answers,  at 2009-09-23 12:58:58hi, yes its possible these days to invest in SIP with minimim sum of Rs. 100 per month. I would request you to visit websites of mutual funds especially HDFC and Sundaram for more details
prashant75 asked, Dear sir, I invest approximately 1 lac every year,i got a money back from lic for rs.30000 kindly suggest where should i invest
Sailesh answers, hi, the answer to your question would depend on your objective, investment horizon and risk appetite. Since I dont have the required information it will be difficult to give you the right solution. I would advise that you take of a competent investment planner.
vipin asked, I earn 12000 per month. how to go abount investments. I am 42
Sailesh answers, hi, first ascertain your investmment goal - if it is say retirement then work out the number of years you are away from retirement. Then work out the monthly income you would need post retirement and the investment corpus you will need to generate that kind of income. Then ascertain the monthly / annual investments you need to begining today, it could be Rs. 12000 or more or less and then work out the asset allocatio that suits your risk appetite.
Mrinmoy asked, I earn Rs 30000 pm. How much I should invest in Mutual funds. Name 5 mutual funds(SIP) which will give me best returns in next two years.
Sailesh answers, hi, I can help you with the name of 2 funds - HDFC Top 200 Fund and Franklin India Bluechip Fund.
pallab asked, I have Rs. 10000 rupees for invest. What is the way of small money invest and get big amount?
Sailesh answers, hi, first and foremost you need patience and discipline. Also define the return you want from the investments and ensure that it is reasonable. If you are looking at higher returns then be sure that you will have to take more but more risk does not necessarily mean more returns. If you are looking at investing in equity markets then invest in well diversified equity funds via the SIP route
vir asked, I have 5 Lacs with me, I want to invest it in such a way that I should be getting income everymonth starting from very next month. Please suggest
Sailesh answers, hi, you can consider investing in Post Office Monthly Income Scheme (POMIS. Apart from this you can conisder investing in HDFC Ltd Fixed deposit that offers monthly income plan. The interest rate will be arounf 7% p.a.
surya asked, How should we exit a stock or a mutual fund. What is the trigger point for exit?
Sailesh answers, hi, you should exit any stock/mutual fund when it is necessary to rebalance your asset allocation. For e.g. your stated asset allocation may be 70% in equity and balance in debt. Say on account of bull run the value of your equity portfolio goes up to 80%, then you need to sell the excess 10% to rebalance your asset allocation to the stated level. Also when the time for your objective is come there is no option but to liquidate the investments
RAGHAVA asked, I have 1600+ units of Reliance Nat.Res mutual fund at an average of Rs.7/- per unit. Current NAV is 10. Sell or hold - what say?
Sailesh answers, hi, I would not recommend that you hold on to this fund. Instead look for well managed diversified equity funds with track record of at least 5 years.
PagalAadmee asked, Saliesh, recently I have got an call with ICICI agent, he sais they have launched a product where we will get 270% on first year premium. is that true? should we go for it?
Sailesh answers, hi, I havent heard of any such scheme. Not sure if any scheme can deliver the kind of returns that have been promised to you. I would recommend that you stay away from such schemes
Sailesh answers, hi, always invest in mix of equity, debt and gold. Fix a goal,determine the amount you will need, amount you can save and then work out the rate of return. Since I do not know your age and risk appetite cant give you any asset allocation number but then the thum rule is 100 minus your age should be in equity. 10% can be allocated to gold.
Sankalp asked, Hello, I want to invest Rs. 1 lakh, wish to get a decent return (70 - 80%) and my time line is 2 years. Could you please advise?
Sailesh answers, hi, to be very honest your expecations are too unrealistic. If you are looking at returns from equity markets then the reasonable returns should be in the range of 12%-15% p.a. Stock markets move in cycle - there are bull phases that can give 40%-50% returns but that is not the case always and there is a bear phase - value of your equity portfolio can fall by 40% - 50%. Hence, average return expecation should be lowered
sankar asked, I Have invested arround 2 lakhs in stocks for last 2 years but my stock value is only 75000 now. Iam also investing SIP & MF which is down 20% now. how i can make out my loss.
Sailesh answers, hi, whether you will be able to recover your losses will depend upon the qualty of stocks & mutual funds you have invested in. If you have invested in bluechip companies with healthy financial but bought them at hhiger price, I would recommend that you hold on to the same. However, if the quality of your portfolio is fundamentally poor then its time to move out of the same and look at fundamentally strong companies. Take help of a honest and competent investment advisor
TestTest asked, What is your view for HDFC Top200, Rel RSF, DSP-BR Top100, BSL FrontLine Equity fund for 3 years through SIP route
Sailesh answers, hi, all the funds have done well. You can continue your SIP in the same.
vivek asked, hi shailesh, can u plz tell me how and where to start investing with 25000 rs.
Sailesh answers, hi, my adivce to every investor is that before you start investing have an investment plan made for all the goals that you have set for yourself. The investment plan will serve as a roadmap to help you will investment decisions as and when you have surplus to invest. In your case you have Rs. 25,000 t0 invest - first list out your goals and how much of this savings should be allocated for each such goal. Take help of an investment planner
Kapil asked, Hi Sailesh, my name is Kapil I am from delhi. Pl.tell the tips to invest with little money.
Sailesh answers, hi, in case of most of the investors the source of income is one but expenses are unlimited and so are the aspirations. To meet this kind of situation it is important to prioritise your goals in terms of its importance and occurance. Save maximum towards the most important goal. If there is any surplus left that can be invested towards not so important goal
PM asked, Hi Sailesh, I am married, 31. I earn 50K pm (take home). I hv invested in LIC (23.5K per annum), PPF (25K), MF (30K). Want to buy a house in the short term and plan for child, retirement in the long term. Please suggest me how to go about? Would it make sense to not buy a house and invest in a wise scheme instead? Can u suggest a plan if I need to have approx 75 lacs in 10-15 years?. Thanks
Sailesh answers, hi, your exisiting investment plan appears to be balance. A simple anser to your query is to get a comprehensive investment plan made for yourself. The plan will help you decide the amount of investment you need to do on a monthly/annual basis. Also, in my view you need to check if corpus of 75 lacs in next 10-15 years will be sufficient to meet all your financial goals. I would alway prefer to own a house as against living in a rented accomodation and investing the money in equity or even for that matter debt
vikash asked, sailesh what are options from which tax can besaved above 1lakh saving
Sailesh answers, hi, you can take medical insurance. You wil get deduction u/s 80D for premium paid for the same. You can donate money to a recognised institution and get a 50% to 100% deduction of the amount donated. This benefit is avaialable u/s 80G
RIYA asked, is it right time to invest in MF NOW?
Sailesh answers, hi, there is no right or wrong time to invest in mutual funds. More important is to ensure that you are investing in instruments that are best suited to help you achieve your objectives in line with your risk appetite and investment horizon. Invest with long term point of view. Invest across market cycles - in bull and bear phase. Typically investors invest in bull phase and remamin inactive in the bear phase when they should be doing exactly the opposite. So if you have money to invest go ahead and invest. Investing reuqires patience and discipline more than anything else
reddy asked, Will HDFC TOP 200 perform from now onwards as the market is just away 15% from peak
Sailesh answers, hi, HDFC Top 200 invests in a mix of large and midcap stocks. The fund has a track recorod of over 10 years to show for. As long as the markets do well the fund is likely to do well. Invest via the SIP route rather than lumpsum.
SHIVA asked, WHICH is the best fixed deposit option available for short term... say 1 year
Sailesh answers, hi, you can invest in any bank FD. IF you are looking for slightly higher returns then you can consider HDFC Ltd Fixed deposit and EXIM Bank FD
rakesh asked, can u suggest me the mutal funds where i can get good returns for the next 2 years... there are some mutual funds claiming the schemes that it provide the returns in such a way that in any point of time Mutual find touches highest value in the period will be given as returns.. can u suggest this
Sailesh answers, hi, I am aware of such schemes but none of them have been able to convince me on how are they going to do the same. Unless I am convinced I would not recommend any investment in any such scheme
Nisith asked, Sir, should i go SIP OR anything else! Sailesh answers, hi, SIP is always the right way of investing. It helps you invest through highs and the lows thus providing you the benefit of rupee cost averaging. Also, never stop your SIP id the stock markets are not doing well. Infact bear phase is the right time to invest as you buy your units at lower NAVs. The benfit of SIP is not avaialble in one year. You need to continue with this practice for atleast 5 years to see some visible benefits
sat asked, I wish to invest one lakh and I am unable to dare to invest in Stock market. Pl show some investment plans
Sailesh answers, hi, since you are begining to invest in stock markets, I would not advise you invest directly. Rather invest in equity funds where you benefit from the expertise of a deidcated fund manager. To start with invest in well mange diversifies equity funds with track record of atleast 5 years. Never include a sector specific fund in your portfolio
PagalAadmee asked, Sailesh, what is your opinion about retirement plans? are they worth?
Sailesh answers, hi, I am not a strong fan of pension plans. I would rather advice investors to buld a retirement corpus that will help them mee their post retirement expenses. Investors should take help of an expert investment planner who will help them with retirement planning.
nm1 asked, Sir, I have 1L for investment in shortterm. where should I invest? Pl. advise.
Sailesh answers, hi, for any invetment for less than one year, I would recommend liquid funds. IF you are looking for assure returns then go for bank FDs
Sailesh says, we have run out of time. I thank you all for participating in the chat session. If you have any further queries, you can email them to me at -