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Here's how to invest wisely to be rich

March 31, 2011 17:11 IST

InvestmentsAre 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 an hour-long chat on financial planning expert Sailesh Multani offered some valuable tips. Here is the transcript:

Sailesh says, Hi, good evening and welcome to this chat session

Sailesh says, For the benefit of all the participants who are planning to start SIP or invest lumpsum in equity or balanced funds, I recommend, among others, HDFC Top 200, DSP BR Equity Fund, Fidelity Equity Fund. In the balanced fund category I recommend HDFC Prudence Fund
Gab asked, I am looking to invesrt in mutual funds, please suggest what are the best options
Sailesh answers,  at 2011-03-31 15:59:38Hi, if you are long term investor willing to invest for 5 years and more and ready to take risk then diversified equity funds are ideal for you. If your investment horizon is between 3 years to 5 years with moderate risk appetite, then balanced funds are the ideal option. Balanced funds are those that invest 65% of the corpus into equities and balance 35% into safer and fixed income generating securities. You can invest in MIPs or Monthly Income Plans if your investment horizon is between 18-24 months and risk appetite low. MIPs invest 20-25% in equities and the rest 75% into debt.
amaan70 asked, Hi I need to know about tax saving MF?which are the best ones
Sailesh answers, Hi, I recommend fidelity tax advantage and franklin India Taxshield
elless asked, i am interested in retirement fund, child education and child marriage. pls guide which is the best option.
Sailesh answers, Hi, for each of your goal you need to build a separate fund comprising of equity funds, debt funds, bank FDs and Gold ETFs. The asset allocation of each such goal will be different depending on the time left to achieve each such goal. E.g. if your retirement is 15 years away then your portfolio can predominantly consist of equity funds. Similarly, if your goal is 3 years away then it should consist only of debt funds and bank FDs. I would also like to emphasise that buying retirement plans and children plans from insurance companies does not help.
karthik asked, I have invested Rs.2,25,000 in Tata Invest Assure gold for the past 2.5 years. I am thinking of stopping the payment after another 1.5 years. There are no surrender charges in the 6th year. Is my decision correct?
Sailesh answers, Hi, surrender only if there is no monetary loss. Otherwise continue holding onto the same.
gali asked, Hello sailesh! I have been investing in Birla Sun life 96 growth and SBI Magnum Tax Gain growth for 1 year in the form of SIP. how would be their performance in future?
Sailesh answers, Hi, I would advise you to exit SBI Taxgain and reinvest in Fidelity Tax Advantage Fund.
Nhedz asked, Hi Sir..Which are the best gold funds or gold ETF to buy from Market??
Sailesh answers, Hi, I recommend Benchmark Gold ETF. Please note that Benchmark MF has sold its business recently to Goldman Sachs
Shashi asked, Sir i have invested in two SIP's HDFC Top 200 and Reliance Regular Savings growth since last year, please suggest till what time horizon should i keep them running
Sailesh answers, Hi, both the funds are good. I would advise you to continue your SIPs for atleast 5 years. Please don't forget to review your portfolio to ensure that your portfolio's performance is good.
piyush asked, which is the best plan to invest related to child education for 3-4 yrs old child?
Sailesh answers, hi, Build a portfolio of equity fudns and gold ETF for your child. Start SIP in 4-5 diversified equity funds. you may invest in the funds recommended by me at the start of this chat. Dont buy any insurance plan for your child.
ravi asked, sir, i started my investment recently but i want to do something in share market. then how does i start to invest?
Sailesh answers, hi, you are a new comer in the field of investments. I would advise you to invest in equity mutual funds to start with. Equity markets are highy volatile and carry maximum risk. I would advise you to stay away from stocks for the time being
rohit asked, sir i m 28 yrs old.which plan i do taht covrmy risk & saving
Sailesh answers, hi, to cover the risk on your life. you need to take a term plan. To grow your money, you need to start SIPs in well managed diversified equity funds.
Mahesh asked, I want to invest in Gold; how should I go about it, Physical gold, Gold ETF or Gold Funds; I will require these funds after about 5 years
Sailesh answers, hi, in my view every investor, irrespective of age and risk-profile, should have atleast 10% allocation to gold. Gold is a precious metal and will always remain in short supply. It is the most sought after asset class in times of financial distress like the one we witnessed in the year 2008. Moreover, it is a store of value. The value of gold in terms of goods and services it can buy has remained constant over the centuries. Therefore, investment in gold also serves as a hedge against inflation. Gold as an asset class is less volatile compared to other asset classes like equity, debt and real estate. It can be used to diversify one's portfolio to bring in more stability in returns. For investors who are planning to invest in gold, it makes sense to invest in gold today. However, don't buy all the gold you want to add to your portfolio in one shot. Rather spread your investment over a six months time frame. I would advise investors to invest in Gold Exchange Traded Funds (ETFs) as against physical gold. ETFs are easier to buy and sell. Please keep in mind that you will need to open a demat account compulsorily if you want to invest in Gold ETFs.
elless asked, Hi, pls guide me with retirement plans and child plans. How much to invest having considered inflation.
Sailesh answers, hi, you need to first work out the retirement corpus and the money you will need for your child's education. Take the present value of the cost and inflate it by taking an inflation of 8% for retirement and 10% for child's education to arrive at the future valaue of expenses. If you find it too technical then email me your question separately at :
Fool asked, Current investments Rs. 3500 SIP in tax saving HDFC mutual fund, Rs. 4000 in open ended HDFC top 200, Rs. 4000 in Fidelity. LIC premium 28,200 p.a. Kotak Insurance Rs. 36000 p.a. I have faith in mutual funds. They have delivered, atleast HDFC tax saver has given 15% YoY. Do I need to change anything here?
Sailesh answers, hi, your selection of MF schemes is good. You havent specified the type of insurance plans youhave bought. so cant comment on them. In the future if you buy insurance then stick only to Term plans. Stay away from other form of insurance, especially ULIPs.
Sanjuchawla asked,  Dear Sir, I am interested in investing in shares or SIP; have been doing the same in past on short-term and low volume basis; so getting marginal profits. What should be the best way to invest?
Sailesh answers, hi, you need to first build a base. Continue wih your SIPs. Tak a long term veiw. Short term view on equity is not good. Once you have build a large base then your money will grow faster. Have patience, you will definitely buidl wealth.
rahul 1982 asked, hi sir, i want to invest in mutual fund, this will be my first investment.can you suggest on this
Sailesh answers, hi, for all beginers I recommend two funds - HDFC Top 200 and Fidelity Equity Fund. You can start the SIPs in these 2 funds.
elless asked, what are equity funds?
Sailesh answers, hi, equity funds are mutual funds that invest their entire corpus into stock and related instruments. these funds carry maximum risk and therefore one needs to have a long term view, atleast 5 years. It is always advisable to invest in diversified equity funds via the SIP route.
bumba asked, I am 33 years old, I have LIC Jeevan anand policy with 30L life cover, how much life cover is essential for me?
Sailesh answers, hi, I do not have any information about your financial standing and networth. therefore it will be difficult to give you a figure of sum assured you should have. Based on my experience, I can suggest that the ideal life cover should be not less than Rs 50 lakhs.
aRIHANT asked, Dear sir, How important is it to utilise the limit in section 80-C? I transferred amounts accumulated in my sip to Hdfc taxsaver and birla tax relief 96 ? where do these elss schemes invest primarily Midcap or Frontline stocks? and how sound is my decision?
Sailesh answers, hi, if you want to save tax then you need to invest in instruments listed under section 80C. Both the funds you have invested in are good though my prefernce would be for Fidelity Tax Advantag over Birla Tax Relief. Both these funds invest in a mix of large cap and midcap stocks.
Raju asked, Sir,I am 50 year old and I have two children of 13 and 9 yrs. what amount should I have for LIC for risk cover.
Sailesh answers, hi, assuming you will retire at the age of 60 years, any life insurance policy that you take now should not have a term of more than 10 years. you should only consider TERM plan. dont buy any other policy. Buy the policy in your name only. Ideally the sum asured should cover the cost of education and marriage of both your children. Besided these tow liabilities, the sum assured should be large enough to generate regular income for your spouse in case of any any eventuality.
mastraj asked, Hello, How is IDFC Imperial growth fund. please give ur view
Sailesh answers, Hi, I would not recommend this fund to any investor. I would advise investors to start building their porfolios with the schemes mentioned at the start of the chat
Raju asked, Sir, I have one SIP of 1000 p.m. can I increase the amount to 2000 p.m.
Sailesh answers, hi, you can always increase the amount of SIP.
ccc asked, I have 2 ulips, both of which 4-5 years have crossed, But fund value in both has marginally increased @ say 5% year. IS it advisable to continue these ULIPs for some more years,to benefit more, or should i go ahead with new investments in mutual funds etc. Please advise
Sailesh answers, hi, I would advise you to continue with the ULIPs. But please dont buy any ULIP in the future. If at all you want to buy any insurance plan, buy a Term Plan. To grow your money, start SIPs in diversified equity funds.
ghegade asked, Hello My age is 30 years I have a LIC 3L for self, 3L for wife , 5L for kid. I have a ICICI Prudential life stage pension plan wherein i invest 15000 per year. I am investing 4000 SIP in MF (HDFC Top200 = 1000/- INR, Fidelity Tax Advantage = 1000/- INR, SBI Magnum Taxgain = 500/- INR , Canara rebecco tax saving = 500/- INR , ICICI Discovery fund = 1000/- INR ) Todays my expenses are 15000 per month, i want to maintain same life style @ age 55 also want to have a 50L as a retirement saving cash. Am i doing right investments ? what i should do to achieve my financial goals ???
Sailesh answers, hi, mail me your query separately at :
ramdev asked, hello sir..what is the minimum sip amount for gold etf?
Sailesh answers, hi, there is no SIP in Gold ETFs. you will have to invest a fixed sum of money into a Gold ETF on a particular date to replicate the SIP
krishna_prr asked, Sir, I invested in JM Basic fund weather it advisable or not. I can invested upto 15000/- with SIP, monthly can you advice me good MF. kk
Sailesh answers, hi , first of all exit from JM Basic Fund first thing tomorrow morning. Start SIP of Rs 5000 each in the 3 funds recommended by me at the start of the chat.
bbs asked, Sir MY Portfolio for SIP consist of i)DSPBR Equity G ii)Fidelity Equity G iii)Magnum Multiplier Plus D iv)Relaince Equity Opertunities G v)Sundaram Select Midcap Reg-G, May I know which fund I should exit and which fun I should add to my portfolio
Sailesh answers, hi, I like your portfolio with the exception of Magnum Multiplier. Exit this fund and add Franklin India Bluechip Fund
kvnrao asked, Hi ,I am at my 34 yrs,with two kids.I am planning to invest in MF's now for their per my calculations I need about 45-50 L by the year 2023.Suggest how much i have to invest every month
Sailesh answers, hi , mail me your query at I will let you know the amount you need to invest
nishant asked, is it good to invest in dws global agribusiness offshore fund
Sailesh answers, hi,if your portfolio does not have the simple, plan vanila diverisified equity funds, then I would advise you to invest in those funds. You can refer to the names of the funds I recommend at the start of the chat. till then I would advise you to stay away from funds like the one you have asked about.
dbn asked, sir, how you see performing sundaram tax gain fund in next 5 year period. Thanks
Sailesh answers, hi, Sundaam Tax Saver's performance has been patchy. I would go for a fund with more consistent performance like Fidelity Tax Advantage Fund.
rprk asked, Hello sir, I want to invest in equity. Is this the right time to invest in equity market?
Sailesh answers, hi, for a long term investor with a 5 years investment horizon, this is certainly a good time to start SIPs in diversified equity funds. start today. Dont wait.
kalra asked, i m working in ludhiana , my pay is rs. 6.5 lakh per year, i wanna start business in 10 year of seed of cost rs 1 crore , how i can achieve, my age is 36 yr old
Sailesh answers, hi, to accumulate Rs 1 crore in the next 10 years, assuming a 10% return you need to invest Rs 1 lakh per month in a mix of equity funds and bank FD. From you annual income, this investment looks difficult. I would advise you to start SIP in diversified euity funds with whatever little you can save. You can evaluate your options every year and take the necessary action
egsdfg asked, Hi Sir, I am 24 year old having an earning of 15 LPA no plan of marriage in next 5 year. Hw much shd i invest in equity to maximise return?
Sailesh answers, hi, invest 70% of your savings into diversified equity funds via the SIP route. Take a Term plan for 25 years with a sum assured of not less than Rs 50 lakhs.
chkfin asked, I have been doing SIPs in HDFC Top 200, Reliance growth and IDFC Premier Equty for last 3 years. Are these the right choices for next 5-6 years?
Sailesh answers, hi, there are 2 midcap funds in your portfolio - IDFC and Reliance. I would advise you to drop one of them. Instead add a more diversified equity fund with a bias for large cap stocks like Fidelity Equity Fund.
chkfin asked, I have been doing SIPs in HDFC Top 200, Reliance growth and IDFC Premier Equty for last 3 years. Are these the right choices for next 5-6 years?
Sailesh answers, hi, there are 2 midcap funds in your portfolio - IDFC and Reliance. I would advise you to drop one of them. Instead add a more diversified equity fund with a bias for large cap stocks like Fidelity Equity Fund.
srinu asked, i am working in Bangalore and i have taken a housing loan in Hyderabad( November 2010) and till now i paid 40 thousand for Priniciple interest and 1.5Lak interer & i also paid rent in bangalore then can i claim both HRA & housing loan interest & principal
Sailesh answers, hi, yes you can claim both HRA and housing loan benefits.
Alka asked, I have taken online Term insurance plan from Aegon religare this year for 55 lakhs since they offered least premium. But now I hear that their settlement ratio is very low. Should I stop paying premium next and move onto LIC?
Sailesh answers, hi, better move onto LIC.
anamika asked, My ppf is geting matured of Rs.1Lac. Can you suggest best fund to divert my fund to get good returns.
Sailesh answers, hi, if you are willing to take some risk and invest for the long term, then I would advise you to invest the money into HDFC Prudence. Please note that HDFC Prudence is a balanced fund that invests atleast 65% into equities.
Asim asked, Whether the saving bank interest is likely to increase?
Sailesh answers, hi, in my view the bank FD interest rates have reached their maximum level. At best they can go up by 0.25% in the future.
priya asked, hello sir, i have invested in Sundaram CAPEX Opportunities Fund-Gr SIP. Its going low now. can i know whether i have invested at right place or shall i close my account.
Sailesh answers, hi, you have not invested in the best of the funds. I would advise you to switch to Sundaram Select Midcap. You will have to wait for some time before you see some action in this fund. midcap stocks take some time to rally. When the momentum comes back to market, it will be the large caps first followed by midcaps.
suryakant asked, I have invested in Reliance Glod Saving funds. was it a right investment ?
Sailesh answers, hi, given a choice I would have invested directly into a Gold ETF. I believe investors who do not have a demat account find it difficult to invest in ETf and therefore Reliance launched this fund.If you have a demate account then invest directly into a Gold ETF
saran asked, 2nd attempt>I am planning for my brothers dauguter a gift for her brithday in the form of childrens fund so as to help her in future .Can i invest in hdfc triple benefit plan ..any specif fund u can suggest would be greatly appreciated.She is 4 years old
Sailesh answers, hi, you should consider investing in fidelity children plan. This fund has a separate option for marriage and education. you can gift these funds to your niece.
Dhruthi asked, Is diversified power sector a better fund ?
Sailesh answers, hi, as a principle I dont advise investors to invest in sectoral fund. Investing in this fund means taking a macro call on the sector as well geting the timing of investment right. At the same time the exit has to be timed well. this may not be possible for any lay investor. therfore my preference is for diversified equity funds that can invest across the sectors.
rakeshh asked, Hi need to buy a term plan age 30, is ICICI iprotect a gud plan for 50lacs, right now in the market its the cheapest but its a pure term plan, should i got for it or buy some other plan
Sailesh answers, hi, when it comes to insurance a pure Term plan is the best. go for it.
always asked, What is the difference between HDFC TOP 200 FUND - DIVIDEND REINVESTMENT & HDFC TOP 200 FUND - GROWTH?? which is better..?
Sailesh answers, hi, performance-wise both growth and dividend reinvestment option are similar. I would prefer growth option over dividend reinvestment.
Dhruthi asked, Hi Sir, I am investing in Reliance Diversified powersector, Rel Regular Savings Equity Growth, HDFC top 200,DSP blackrock equity,HDFC equity,ICICI pru diversified equity fund . is my choice correct ? Please advice me if I have to change any of these
Sailesh answers, hi, exit Reliance Diversified Power Sector Fund and invest in Fidelity Equity Fund.
nishant asked, can u suggest any good fund in commodities
Sailesh answers, hi, there is no mutual fund schemes that invest in only in commodities. I would advise you to invest in diveirsified equity funds rather than concentrating on commodiities.
HariA asked, Hi for child education- pls advice which is the best MF to invest
Sailesh answers, hi, start with HDFC Top 200 and Fidelity Equity Fund
Sailesh says, We have run completely out of time. I thank you all for participating in this chat session. If you have any questions which were not answered during the chat, you can mail them to me at: Please mention your age and current asset allocattion.