In an hour-long chat on rediff.com on Thursday, Rahul Goel, CEO, Personalfn.com, answered readers' queries on tax planning, invetsment, mutual funds etc. Here is the transcript:
Jayesh_Shah asked, What exactly does financial planning mean in a practical sense?
Rahul Goel answers, at 2007-07-12 13:07:31jayesh, hi. financial planning basically is a process by which you can chart out a roadmap to meet expected and unforeseen needs in life. very simply put.
df asked, Hi I earn Rs 6 lkahs a year. What MFs should I invest in?
Rahul Goel answers, hi. where you invest the money will depend on "why you wish to invest the money" i.e. the objective of investing the money. since you are liquid expect lot of "relationship managers" to chase you! our advice - get yourself an honest financial planner. rest all will fall into place.
c_vikas2007 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 Growth: 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. Apart from this I got an FD of 12 lacs at the interest rate of 9.5% for 2 years. Can you suggest me how better I can organize my portfolio? Regards Vikas
Rahul Goel answers, vikas, hi. at personalfn.com, the research initiative i represent, we do not recommend that investors put their monies in sector / thematic funds. these funds, in most instances, are just gimmicks to get you to invest. so avoid them. other than that, you should focus your investments in about 5/6 schemes, which your financial planner should help you select. you have locked in an attractive rate for the FD. good for you!
tik asked, are all fds (5 yr or more) eligible for tax benefit ? or are these special fds notified by banks ?
Rahul Goel answers, no, all fds are not eligible for tax benefits. the fd which is eligible is clearly specified. before committing monies, get yoru banker to confirm.
gret asked, Hi, my wife and I together earn about Rs 30 lakhs. Please suggest some good MF investment options
Rahul Goel answers, gret, hi. since you are in the high income bracket, you must be getting swamped by relationship managers. all i can recommend is that be very careful when selecting who should guide you with your investments. without making this sound as a sales pitch, if you want to cross check the advice you have been receiving, visit our website - www.personalfn.com.
vamshi asked, Hi SIr, i want to invest rs. 50000/- in mutual funds and shares. Also i want to do my financial planing... pls advise my monthly income is Rs.22000
Rahul Goel answers, vamshi, hi. whether you should invest in shares or mutual funds will depend on how much time you can spend researching stocks. if you can't then go for mutual funds. but even in this case, be sure that you have access to honest advice; there are definitely a lot of funds out there you do not want to be invested in! again, regarding your financial planning, i suggest you meet with a professional and take this forward. i am unable to guide you over a chat! if you are looking for online assistance, you can always visit www.personalfn.com.
Loknath asked, Sir, I want to invest 15 to 20000 per month in SIP for the next 5 to 6 years. Please suggest me a suitable SIP funds.
Rahul Goel answers, loknath, hi. its good that you have a time frame in mind. assuming you have an appetite for risk, you should opt for well managed diversified equity funds. you should have not more than 6 schemes; and attempt to select them so that you will not need to "churn" them. every time your relationship manager gets you to churn, you will lose anywhere between 2 - 3%!!
BK asked, I am a NRI. I have annual income more than Rs 1000000. Please advise me for investment considering that my capital should be secured.
Rahul Goel answers, there is only one way to secure capital - fixed income instruments, which are of AAA (highest) credit quality. if you are very risk averse, go in for deposits. if you can take some, but very less, risk, go in for FMPs - fixed maturity plans - these are close ended debt funds which offer attractive post tax yields. however, take the FMP from one of the very few AMCs which are well managed, in our view.
Rishi asked, Hi Rahul, If anybody changes the broker for the MF investment( I have notice the ARN number), how does the individual impacted ?
Rahul Goel answers, rishi, hi. there is no impact on the you, the investor. if you are not getting good sevrice, by all means you should switch your distributor!
ksm asked, Hi! i'm single. my monthly savings are 27,000/-, last year i invested 62,000/- in ELSS,i've a jeevan anand policy for 5 lacs.this year shud i go for a home or invest in elss?
Rahul Goel answers, do you already have your own property? at personalfn our view is that, for retail investors, it is best to own only that much property which has to be used for oneself or for inheritance. if you have a very long time frame, then best to add other assets to your portfolio - like stocks and equity funds. and remember, elss is a one time investment; buying a property requires maintenance, and if you have a loan, then you will need to service that loan.
Amit asked, Dear Sir, I am new to stocks and MFs. I want to invest 30-4000o per annum. Can u suggest me where to invest?
Rahul Goel answers, amit, hi. since you are new to investing, be very careful when selecting your relationship manager. spend more time in identifying someone honest who can service you. and, if i may, if some banker pushes you a "ulip", which they most probably will, then its time to look for another relationship manager!!
rebati asked, I can invest Rs 10,000 a month for the next 10 years. What will be my SIP options?
Rahul Goel answers, rebati, hi. you have a tenure of investment which is best suited for equity, in our view. however, you need to be prepared to lose money in the near term - no one knows how the stock markets will perform in the near term. select 5/6 schemes; and be very careful about "churn". you do not want to get in and get out of funds every now and then - it will cost you a lot of money! to see how much, see this - www.personalfn.com/calc/churn.html
RAGHAVAN asked, What do you think about the investment plan? Which schemes are the best?
Rahul Goel answers, a scheme can be good for me but not so good for you. when drawing up an investment plan, at lease we at personalfn, match the schemes to the needs and profile of the investor. so, if you ask me to name the best scheme, i am unable to.
RAGHAVAN asked, Which are the right mutual funds to invest right now? Should I go for SIP or the closed ended mutual funds? I want to get at least 15-20% appreciation over the next 1 year. Kindly advise. Most of my investment till date has been in PPF & NSCs
Rahul Goel answers, raghavan, hi, if you are investing for a period of one year, then i think you should expect no more than 8% post tax. anything more than that, and you will need to effectively 'speculate'. even from a 3/5 yr perspective, we think that a 15% pa return is more realistic.
amirali asked, Sir, what about sbi mutual fund to begin with - investing about 25,000
Rahul Goel answers, amirali, hi. i think rather than selecting an amc to invest in, you should identify the reason why you are investing; and then you should select the scheme that suits you best. every amc has many schemes; and even if an amc is good, it is not certain that all their schemes will be good!
prince asked, Hi Rahul, I have been approached by HSBC to manage my funds. I have around 6 lakhs to invest. And I am also thinking of investing this money in the real estate. As this is one sector I have faith in. Would you advice me to go ahead and use a bank to manage my finance. My decision will be fluid. I would invest wherever there is better gain. What do you suggest? Prince
Rahul Goel answers, prince, hi. regarding your quertio on real estate, pl refer to an earlier question to which i have replied. now, coming to your selecting an advisor. without commenting on a specific bank, i think it is very important for you to know whether the advisor is acting in your interest or his. i think if in your first meeting the advisor starts selling you NFOs and ULIPs, you need to become very alert. in any case you can maybe check the advice you get on mutual funds from such banks with what we tell our clients at Personalfn.... we have a website where we share our views on this and more - www.personalfn.com
manasvikumar asked, I am a doctor by profession...with an annual income of 6
Rahul Goel answers, hi.since you mention safe, the option for you probably is fixed maturity plans. these will probably give you better tax adjusted returns when compared to an FD. some people may try and sell you equity funds telling you that they are "sure shots". don't believe them.
Anirban asked, Dear Sir, When you start investing in stocks, what profit % should be in your mind in a year?
Rahul Goel answers, anirban, i think you should not really expect a return in one year. expect to earn a return over 3/5 years or even longer than that.
Ashok asked, Hi Rahul, what do you think of the UTI NFO (Life style)
Rahul Goel answers, at personalfn, we tell our clients, not to invest in nfos... in fact 95 out of 100 NFOs are something in our view that do not fit into any clients' portfolios. they are just attempts to mobilise money by the mutual fund. with regards to UTI, your advisor should guide you on the same.
sandy asked, Hi rahul, I have question one ...is ULIP a best to invest if we have a short term vision of say 5 yrs ?
Rahul Goel answers, sandy, hi. pl do not invest any money in a ULIP unless you wish to stay invested for atleast 12 - 15 years. anything less than that, and in our view, you will have made a sub optimal return.
anilpandey_3 asked, Hi!I'm 38 yrs. old and I want to invest for next 10 years as an investment plan. Will you please suggest me about mutual funds to proceed in line with requirement.
Rahul Goel answers, anil, hi. given the time frame, and assuming you have risk appetite, have a predominantly equity fund portfolio. select 5/6 schemes after carefuly study, in case you do not have access to honest advice. avoid nfos. your advisor should be able to tell you exactly which schemes to invest in and in what ratio. but if you need any guidance, you can always visit our website www.personalfn.com to get some guidance on the same.
james asked, i am 42, 1want to retire at 56. i may live upto 75. my current exp. is 100000/- monthly. pl.guide me with the planning and amount to be saved monthly
Rahul Goel answers, james, hi. for me to be able to guide you, i will need a lot more information. planning for retirement is simple.... but not this easy! at personalfn we do guide our clients on their retirement planning though; but it takes a couple of personalised sessions for the same.
Sri asked, Hi Rahul, my father has Rs 3 lakhs to invest right now. He is 65 years old and has been asking me where to invest to get some monthly income from that source of investment. Should I suggest a dividend MF or the normal FD route offering 10% for senior citizens?
Rahul Goel answers, sri, hi. in current times, it may be best for you to lock in the money in a long term FD, which gives a monthly payout. do try the deposit scheme offered by HDFC Limited (different from HDFC Bank).
Anand asked, I would like to invest in stocks with a short term view. Can this be better than investing in MFs?
Rahul Goel answers, anand, hi. if your investment horizon is anything less than 3 years, we recommend you avoid investing in the stock markets.
reja asked, I've invested around 11L in diversified mutual fund, equity, ULIP and some balance fund. I see that the overall allocation in Large cap is 50% and 45% in Mid and small cap companies. I'm 33 years old and I can withstand market ups and downs. And I'm investing to meet my long term goals. Please advice is the allocation OK?
Rahul Goel answers, reja, hi. sure you can take risk! but the point is whether you want to take unnecessary risk by having so much money in mid and small caps. i think you should have money in diversified funds, which are predominantly large caps. they may have upto 30% in midcaps anyways. if you wish to have dedicated mid/small cap funds, they should not be more than 10% of your overall mutual fund assets.
Bibhu asked, Hi Rahul, I am a 28 yr old single man. At present, I can afford to invest 5000 p.m. in SIPs. Should I go for MFs or ULIPs or should i divide them amongst both MF and ULIPs ? Also, is it advisable to increase/decrease the SIP amount during the various phases of a rally?
Rahul Goel answers, bibhu, before you take a ulip, pl understand the product. also, since you are just starting off in your career, it is best to take term insurance for 30 years; it is cheap, and serves the purpose. you can consider ulips once you have this and other "pure" investments in place.
rajeevg asked, HI Rahul ,... My annual income is 14Lac. And Iam planning to retire in 3-5 yrs. My age is 35yrs. if I start investing in Mutual Fund... can it will take care of my pension after retirement. If yes.. then how much and where I should put my money... thanks.. cheers
Rahul Goel answers, rajeev, hi. if you are planning to retire in 3/5 years, then you should avoid taking too much risk. instead given that the yields from debt instruments are pretty attractive, you should lock i a substantial part of your assets in it. put a small anout of money in diversified equity funds - that will help you take care of the later part of your retirement life.
kuldeep asked, should somebody seek advice from a company rep or a CFP. I have heard these guys are reliable, pls answer very critical for me...
Rahul Goel answers, kuldeep, hi. there is no surety that a qualified person will serve you better; or vice a versa. most of the investors i meet, have had very poor experience dealing with some of the largest and apparently the most reputed organisations in the world!! so, don't go by qualification. just ensure the person is competent and honest. rest all will fall in place.
send2karthik asked, Hi Rahul! Thanks for sharing your expertise with Rediff readers. Two years back, I chose 5 MF schemes (Tata Young Citizens, Principal Child Benefit, Pru ICICI CCP, HDFC Childrens Gift, UTI CCP)schemes for higher education of my son -- Rahul, 6.5 years old. However, I find their risk-reward ratio is far inferior to some of the best-performing Diversified funds. Since I have a 9-10 year time horizon, should I shift out of the Child-specific schemes to Diversified funds?
Rahul Goel answers, prima facie, it may be better to be in pure equity funds as against the children funds which tend to have some debt in it. but remember, given that debt is now yielding attractive returns, these funds too will start to perform well. maybe what you can do, divert your fresh inflows into the diversified equity funds; keep the child funds intact. you however need to also be sure you are holding the right funds.
siva asked, I am an NRI and looking for financial planner's. Pls suggest
Rahul Goel answers, you can search for financial planner on the internet, i guess. if you want to read more about the challenges of inevsting in india, visit www.personalfn.com!!
MANISH asked, YOU ALL TALK ABOUT FINANCIAL PLANNING,LET ME ASK U HOW CAN U BE SO SURE ABOUT EQUITY RETURNS? MANISH
Rahul Goel answers, manish, hi. you are right... one cannot be sure about equity returns. it is something that people can speculate on, they will know only in hindsight. that's why we always insist that invest for the long term; over longer terms it is fundamentals that drive stock prices; in the near term its sentiment.
Tushar Mehta Tanzania asked, Dear Mr.Rahul. I want to invest Rs. 200,000/- My age is 30 years & i am married. i want to invest all in equities. Which Shares & at what price you advise
Rahul Goel answers, tushar, hi. invest in shares only if you can do your own research or have access to independent research. otherwise mtuual funds are best. but even there, pl be very careful in selecting where to put your money.
Pavan asked, Hi Rahul, What's your opinion on Reliance Equity Growth Fund compared with other NFO's in the market ?
Rahul Goel answers, pavan, hi. without commenting on any particular NFO, we at personalfn, tend to tell our clients not to invest in NFOs. almost all the time!
vivek asked, Sir, I would like to put 5000/- in SIP. My need is after 5 years & 10 years. Which MF should I select.If you have office in Bangalore,pl. give the Ph. #.Thanks.
Rahul Goel answers, vivek, hi. yes we do have an office in bangalore as in other cities. pl take our details from here - http://www.personalfn.com/aboutus/contact.html
Anwar asked, Hi Mr.Rahul, I'm an NRI working in Gulf. I woulk like to enter in the mutual fund industry. I'm planning to enter there with a sum of Rs.5-7 lakhs. As I'm not an expert in this field, how can I enter here?
Rahul Goel answers, anwar, hi. the answer is that you must get find yourself an honest investment consultant. it will be difficult, but at the same time, it will be worth the effort!
Rahul Goel says, Thank you all for participating in the chat. Look forward to interacting with you all again next week!
Chat with Rahul every week!