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How to put your money to best use

August 06, 2009 11:28 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 rediff.com on Wednesday, financial planning expert Sailesh Multani offered some valuable tips. Here is the transcript:

Sailesh says, Good afternoon everyone, lets start the chat session


amit asked, Hello i will like to invest a small investment of 5 lakh, can u suggest.
Sailesh answers,  at 2009-08-05 12:28:53hi, the investment will depend on your investment objective, investment horizon and risk appetite and the expected returns.These are the 4 crucial parameters on whcih you should base your investmnent decision
Mona asked, What ongoing costs will I incur when I own a mutual fund?
Sailesh answers, hi, once you have invested in a mutual fund, the ongoing cost include the fund management cost and this is expressed as the expense ratio of the fund. The NAV of a fund is calculated after taking into account the various expenses incurred in managing the fund.
DARSHAN asked, WHICH IS THE BEST MF TO INVEST IN
Sailesh answers, hi, there is no such thing as a best mutual fund. Invest in funds that suit your investment objective, risk appetite and investment horizon. Also, invest in funds that have a track record of atleast 3 years to show for
sinha asked, I am 65 years old where should i invest my money
Sailesh answers, hi, given your age you should have larger allocation to debt as against equity. The asset allocation will depend upon various other factors, risk appetite being one of them. IF you are considering risk free assured returns then you can invest in 9% Senior Citizens Savings Scehemes. You can also consider bank FD for the same. If you are considering allocation to equities then you should opt for equity funds.
subhendu panigrahi asked, which child investment plans best to invest up to 15 to 20 years...... wich gives good returns and what is the yearly investment needed?
Sailesh answers, hi, the answer to your question lies in making an investment plan for your child. If you are plannning for your child's higher education and marriage, then make a separate plan for each such objective. The plan will precisely tell you how much money you should have and the amount of monthly/annual savings. The choice of investment products should be based on such an investment plan
vinay asked, i have been investing in monthly post office schemes for 5 yrs , have got mutual funds (debt & equity related ) , also purchase 15 gms gold every year , invest 70k in ppf every year , have lic premiums to the tune of 57k , then also invested in NSC worth 90 k & at the last try to have min 1.5 lac as cash in my bank.... can you let me know from financial angle whetehr my decision of investment in above manner is ok......or kindly suggest me some alternative plan..
Sailesh answers, hi, prima facie you seem to have a well diversifed portfolio but that by itself may not be sufficient to ensure that you will meet all your investment goals. In my view you should have a comprehensive investment plan made for yourself whcih will tell you how much to invest per month for each goal
test asked,  IF I HAVE TO CHOOSE ONLY ONE EQUITY MF FOR 10 YEARS - WHICH ONE SHOULD IT BE ?
Sailesh answers, hi, in my view you should have a well diversified portfolio of equity funds. 5-6 different equity funds from different mutual fund houses should be a part of the portfolio.
ama asked, should i invest in gold both physical and gold funds
Sailesh answers, hi, in my view if you are buying gold from investment perspectvie then Gold ETFs are the best option. It provides you easiy liquidity and takes away the botheration of safekeeping the physical gold. Also, every unit of Gold ETF is backed either by 0.5 - 1.0 gram of gold
Abhishek asked, Hi, My investments are as follows: Rs.5k in Franklin India Prima Plus –Growth (for investment) Rs. 5k in DSP BR T.I.G.E.R. - G (children education) Rs. 10k in Reliance Regular Savings Fund – G (Retirement) Rs. 5k for Contingency funding via SIP in Birla MIP II Savings 5 - G Is it the right mix?
Sailesh answers, hi, your portfolio looks good but add few other well diversified equity funds like HDFC Equity and Franklin India Bluechip fund to your portfolio.
Jayant asked, Should I opt for Dividend or Growth option?
Sailesh answers, hi, the answer to your question lies in deciding if you need cahs flows at regular intervals. If the answer is yes, then opt for dividend or else growth. In case of equity funds, if you are a long term investor say for 5-10 years and if you opt for dividend option,then every time you take money out by way of dividend you reduce the power of compounding as the amount of dividend does not participate in future growth of capital
subhendu panigrahi asked, Hi, I had Magnum Muliplier 1993 Mitual fund 200 Nos. nos. the price is 51.50 per share. shares..... i want to redeem it... is this the right time to redeem.
Sailesh answers, hi, the deicision to redeem investments should depend mainly on your need for funds or balancing of your assset allocation. If your investment objective has materialised and you need money to meet the same then you should go ahead and redeem.If that is not the case then look at your overall asset allocation and see if its tilted in favour of a particular asset class and out of alignment with your stated asset allocation. If that is the case then redeem your investment to set right the asset allocation.
Chirag asked, Hi this is Chirag here, 22 I have just started working i am earning 8000 in a International Tourism Counter. Already started investing in MF UTI Growth fund 1000 per month Any idea how should I and where should i invest more ?? How about LIC ???
Sailesh answers, hi, since you are young and just started entered working life, I would advise that you start investing in equities. Make a portfolio of 5-6 well diversified and managed equity funds with good track record. Develop the discipline of investing regularly through SIP and I am sure you will meet all your investment goals. Better still, make an investment plan for you to ensure that your savings are channelised in the righ investment products in the right asset allocation
Mangal asked, What are the risks of investing in MFs?
Sailesh answers, hi, investments in mutal funds are linked to market risks. This means that the price of the security in which the fund manager invests can go up and down. Hence the NAV will accordingly move up and down.Also, in case of debt funds, the fund manager may invest in companies that have poor credit wortiness. In such a case the fund can lose the capital. Hence, it is important to check the portfolio before investing in the same. Better still, if you can take help of an honest and competent investment advisor it will help.
sudarshan asked, Dear Sir, Please suggest a plan for me to put my money for 6-10 months with maximum returms, if equity then kindly suggest the stock.
Sailesh answers, hi, i can only suggest bank FD or liquid fund for investment horizon of 6-10 months. If you are looking at investing in equity then your investment horizon should be atleast 3 years. The returns from liquid funds / bank FD will not be more than 4% post tax.
ed asked, hi Sir, What the best retirement plan my age is 37 years
Sailesh answers, hi, the retirement plan is different for different individuals. In your case you should take the help of an invesmtmnt planner who will help you with the retirement plan customised to suit your retirement needs.
kajolbose asked, May I invest through SIP in UTI Index Nifty Fund and HDFC Sensex Fund for 5 yrs ?
Sailesh answers, hi, yes investing in Index funds for 5 years is a good strategy. You can also consider adding non-index based diversified equity funds to your portfolio as lot of these funds have managed to beat their respective benchmark index
paps asked, Hi Sailesh, I have about 10 lacs surplus which I want to invest for a 12 year horizon. I am 38 now. Can you please advise the best options available with moderate risk? Thanks
Sailesh answers, hi, first decide your investment goal and then build the plan to meet the same. Given you age and risk profile you can consider invest in 65-70% of your money in equitiy and balance in debt. Consider adding 10% to gold. This is just an indicative asset allocation. Your investment planner will be in a better position to decide the best asset allocation for your investmrnt needs.
ady asked, helo sir. M a NRI guy and want to put 3 Lakhs rupees in 4-5 funds. Shuld i do one time investment or through SIP? Plz suggest.
Sailesh answers, hi, in my view stagger your investment over the next 4-6 weeks. Do not wait to time the markets, you may miss out on the good opportunities.
Big J asked, Is it good to invest in Sunderram BNP paribas through SIP(2000 /- month) in tax saver fund
Sailesh answers, hi, I recommend funds like Fidelity Tax Advantage and Franklin India Taxshield.
MAO asked, , what percentage of savings is an ideal option of net income
Sailesh answers, hi, the thumb rule is that one should save atleast 40% of his/her income and invest in a mix of equity,debt and gold
mg asked, Hi I'm having following SIPs in my portfolio (Reliance Vision 1k, Reliance Diversified Power Sector 3k, DSP BR Top 100 Equity - 2k, Birla SunLife Frontline Equity Fund -2k). Are they good options or should i change any of them?.
Sailesh answers, hi, the funds you hold are good. Continue with your SIPs
senthil asked, What is the best investment in the present market situation?
Sailesh answers, hi, stock market level should not be the deciding factor where you should invest your money. The investment decision should be based on your objective,risk and investment horizon. If your investment horizon is 3 years and more and risk appetite high , then consider investing in equities.
Abhishek_Dave asked, Should i buy Gold with next 2 years horizon or equities for 3 yrs horizon
Sailesh answers, hi, in my view you should invest in both. I recommend that every investor should have atleast 10% allocation to gold
venu asked, My baby age is 1 year. Could you please suggest some child investment plans. I want to invest 15000 per year for 15 to 20 years. Could you please suggest which child investments will give best returns.
Sailesh answers, hi, the best way to invest for your child is to get an investment plan made him/her. Given that your investment goals will be 15-20 years away have maximum allocation to equities. Invest in equity funds through the SIP mode
Lata asked, What should one keep in mind while choosing a good Mutual Fund?
Sailesh answers, hi, first and foremost the fund should suit your investment objective and risk profile. Then you should look at the fund house, the fund management team, its track record, various risk ratios like the standard deviation and sharpe ratio, portfolio quality and concentration.
coolboy asked, Hi is it advisable to invest in "DSP BlackRock World Gold Fund" instead of EFT (because that needs a DEMAT a/c to invest)
Sailesh answers, hi, DSP BR World Gold Fund does not invest directly into gold. Thi fund invests in stocks of companies engaged in goldmining a business. Hence the retruns of this fund is linked to the performance of the underlying companies and to the movement in the gold prices. If you want to benefit from the movement in gold price then gold ETFs are the right option
sharad asked, Hello Mr. Sailesh, I have some money that is sufficient enough to buy a 1 BHK flat in Pune. I already have a 2 bhk flat. My CA recommends that I don't buy another flat, but rather invest in equity funds. Is it safe to invest so much money in equity funds like HDFC Top 200, DSP BR etc. I am a 30 yr old sofware professional.
Sailesh answers, hi, it is best to have a well diversified portfolio comprising of various asset classes like equity debt gold and property. In my view since you already have one property, you should consider investing in other asset class like equity. However, before investing in equities understand that equities carry high risk and hence your investment horizon should be atleast 3 years. Higher the better! Invest in well managed diiversified equity funds with 3 years of track record to show for. DSP BR Top 100 and HDFC Top 200 Funds are among the well managed equity funds you can choose from.
Mitesh asked, i have sip in idfc premier equity, hdfc top 200 and sundram select midcap, should i continue or stop
Sailesh answers, hi, you can continue with your SIPs
Sailesh says, Thank you all for participating in the chat session. If you have any further queries, please feel free to mail me at : info@personalfn.com