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Here's what to do when the market is volatile

April 26, 2012 18:16 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 on Thursday, financial planning expert Sailesh Multani offered some valuable tips. Here is the transcript:

Sailesh says, Hello & Good evening - welcome to this chat session

Sailesh says, For all those who are looking forward to recommendations on various types of mutual funds, here are my picks. In the equity fund category – HDFC Top 200 Fund and DSP BR Equity Fund . In the balanced fund category, I recommend HDFC Prudence Fund. In the ELSS category – HDFC Tax Saver

Nixon asked, Is investing into PPF profitable
Sailesh answers,  at 2012-04-26 16:01:57Hi, PPF is one of the most attractive debt instrument and ideal for long term goals like retirement. It offers 8.8% interest per annum which is tax free and compounded annually. Besides, the investment in PPF also qualifies for tax deduction under section 80C
sunny asked, what would be good Mutual fund/ stock options for a shorter time frame..for say 1 year?
Sailesh answers, hi, for short term, you should consider investing in a mix of ultra short and short term bond funds. Please note these are debt funds and offer market linked instruments. If you are looking for assured returns then bank FDs are ideal for you.
Ashfaque asked, if we talk about long term then whats a best plan to invest.
Sailesh answers, hi, if your investment horizon is for 5 years and more then, you should consider investing your surplus into well managed and diversified equity funds.
CJ asked, Does investment in a SIP over a long duration a minimum of 5 years lead to better returns?
Sailesh answers, hi, SIP is the most simple way of investing into diversified equity funds for wealth creation. It does away with the botheration of timing the markets and inculcates discipline in the investment process. To benefit from SIPs, you need to invest across the market cycle and one can experience the power of SIP only over a period of 5 years and more.
upma 1981 asked,  hi m very bad in market review or investing into stock/ sip etc. can you advise me some simple way to get the better long time return. Currently i am only investing into Gold coins and PPF.
Sailesh answers, hi, the best alternative to investing into stocks is diversified equity funds. You should select the fund which has a proven track record of atleast 5 years to show for. I would prefer Gold ETF to Gold coins for exposude to gold. PPF is an excellent investment instrument. You should continue with the same.
sanjeev asked, which mutual funds u will recommend to invest for a horizon of 2 years
Sailesh answers, hi, in the current scenario I would recommend a mix of short term and long term income funds. Please note these are market linked instruments and therefore their returns are not assured.
DeepakGupta asked, i am 29 years old,my annual income is approx 16lacs whats my future palnning
Sailesh answers, hi, your investments should be led by your financial plan. You should get your financial plan made with the help fo a financial planner. the financial plan will help you in planning for each of your financial goal like buying a property, buying a car, retirement, etc. What you need to do is to build a portfolio for each goal which is comprised of equity funds, debt funds and gold ETFs. asked, I would like to start SIP Rs.1000 each for 3yrs following MF ICICI Focused Blue Chip Fund, HDFC Top 200, Reliance Equity Opportunitis Fund,IDFC Premier Equity. Kindly let me Is it good perfoming fund?
Sailesh answers, hi, from the funds suggested by you, I recommend only HDFC Top 200 Fund. You may consider other funds like DSP BR Equity Fund and Franklin India Bluechip Fund as well.
Dkumar asked, how long should you keep the funds in mutual funds
Sailesh answers, hi, your investments should be guided by your investment horizon. Ideally you should have zero allocation to equity if your goal is less than 3 years away. From that persepctive, you should start exiting your equity funds or stocks 3 years before the goal materialises. To benefit from the power of compounding you should invest in equity funds for atleast 5 years.
amar asked, i have fedality equity, hdfc top 200 Hdfc prudence & kotal gold sip @ rs 5000/-each. My present corpus is 70L ( 55L debt& 15L in MF). I am now 52 . Plase tell me Rs. 1.5 Cr corpus is posiible at my retrement of 58 years.
Sailesh answers, hi, assuming a return of 12% from your equity portfolio and 6% from your debt portfolio, you should expect to accumulate approximately Rs 1.07 crores.
Akku asked, investing in Gold is good idea ?
Sailesh answers, hi, gold is an excellent investment for diversification of one's portfolio. Historically gold has given returns in line with the inflation and therefore it is considered to be an hedge against inflation. Of late, Gold has been the most sought after commodity because of the risk aversion on account of global financial crisis. In my opinion gold will continue to be sought after till the problems of the west subside. I recommend 10-15% allocation to gold. I prefer gold ETF over physical gold. My recommendation is for Goldman Sachs Gold BeES.
asit asked, i hav 2 lacs here sud i invest thse money?
Sailesh answers, hi, you investment decision should always be guided by your investment horizon and risk appetite. If you are willing to take risk and invest for the long term i.e. 5 years and more, then you should consider investing largely in diversified equity funds. If your investment horizon is between 2-5 years then you can consider investing in balanced funds. If its less than 2 years, then short term bond funds and bank fixed deposits are ideal for you.
jayu asked, hello, is it possible to sell Growth funds within 1 year or there is some limit before we sell them.
Sailesh answers, hi, most of the equity and debt funds have an exit load if you exit within 6 months or 12 months from the date of investment. Also you will be subject to short term capital gains tax. Please check with your investment advisor for your tax liability and exit loads for the funds you are invested in.
jude asked, I am a beginner at share market. have an amount of 25k to invest. can spare time for intra day too. need to grow this amount in the shortest possible time with adequate risk. pl. suggest suitable portfolios......
Sailesh answers, hi, since you are a beginner, you should drop the idea of investing directly into stocks. Diverisified equity funds are best for you. If you are looking to invest in equity markets then your investment hotizon should be atleast 5 years. Equity markets move in a cycle and therefore, you need to ensure that you are invested across the cycle to benefit from the power of compounding
meetnilesh asked, STP is good for long term in investment?
Sailesh answers, hi, STP stands for Systemtic Transafer Plan. It is similar to SIP. In the case of STP a fixed amount is transferrred from one fund, usually a liquid fund to another fund which may be an equity fund or a balanced fund. SIP and STP are ideal for investment in equity funds.
ashok asked, i am retiring after two years. how should i paln my investment now and immediately after retirement
Sailesh answers, hi, you should first calculate the income you would need based on the post retirement expenses you would incur. this would be an estimate but ensure that the estimates are realistic. Ideally your portfolio should be divided between equity, debt and gold. Gold can be 10% of the portfolio. Keep so much in debt that is adequate to generate regular income for you. The balance should be invested into diversified equity funds.
raginiverma asked, Dear Sailesh jee,I am planning to invest 15000/- per month in SIP. I am planning to dstibute equal amount in 3 funds....Please suggest me some good funds for long term prospective of 15 years. I am 35 years old .
Sailesh answers, hi, you can refer the funds i recommended at the start of this chat.
mutkure_nitin asked, I have a sip of as follows 4k in hdfc top 200, 2K in hdfc prudence * 4K in DSP Black Rock eq. does this portfolio looks good
Sailesh answers, hi, all the funds are good funds. Continue with your SIPs
shan asked, I have a SIP in Quantum Gold Savings Fund for Rs. 1,000/ mth along with my other Equity MF schemes (15,000/mth). Is it a good bet?
Sailesh answers, hi, Quantum Gold ETF is among the well managed funds. Continue with your SIPs into them.
tantri asked, Is it advisable to open a PPF account in the name of my child and deposit the entire allowed amount of Rs 1 lac per annum in the same. I have my own PPF account and I am planning to deposit the entire allowed amount of Rs 1 lac in it. Thanks
Sailesh answers, hi, you can open a PPF account in the name of your child. You can invest upto Rs 1 lakh into this fund. you can invest Rs 1 lakh in your own PPF account.
Tushar100 asked, Dear Sir... I am 41 years old. Planning to retire at age of 55 years. I have 2 kids 12 years and 6 years . I have need of childs education rs 15 laks each. where as i would like to have pension of 1 lakhs Rs. Please suggest amount of investment per month and where to invest it.
Sailesh answers, hi, you have multiple goals to meet - children's education, marriage and your retirement. you need to get a financial plan wrtitten for yourself with the help of a financial planner. the plan will help you devise an investment strategey for each goal separately.
Mahantesh asked, Hi, I'm 3 to 6 months experienced Intra Day trader, since first day i'm in loss only comparing my all trades. Can u suggest me how to get profit ? what are the things do i need gain ? whether shall i stop investing in market?
Sailesh answers, hi,when it comes to equity investment, I follow the text book rules. I am a long term investor when it comes to equities. By long term I mean 5 years and more. If you are looking to build wealth through equity then day trading will not help. you need to buy and hold bluechip companies with the potenital to grow in the future.
vc asked, My age is 35. I'm planning to sell my pune flat thro' which I can get Rs.60 Lacs. I've Rs.20 Lacs in hand. With this Rs.80 Lacs I want to get shifted to my native place where I've 2 houses and I want spend my life on FD interest by doing some small business. Will this planning work?
Sailesh answers, hi, you need to work out if the corpus of Rs 80 lakhs will last your life time. Ideally your corpus should generate regular income to take care of your regular expenses and other annual expenses like medical insurance premium, etc. Please dont forget to factor in the inflation while calculating your expenses.
Gaurav asked, I have a son 3 years old.Kindly suggest some investment for his future
Sailesh answers, hi, the best investment for your 3 year son is diversified equity funds. You can invest as much as 70% into diversified equity fund. 15% can be invested into gold ETFs and remaining can be invested into debt funds, bank deposits or recurring deposits.
ssn09 asked, Hello sir, i was investing 10k in SIP's in different mutual funds, now i m thinking to start SIP of 5k in gold fund, is it advisable to invest in gold through SIP, if yes which are the good funds?
Sailesh answers, hi, your investment in Gold ETFs should not be more than 15% of your total portfolio. You should continue with your SIPs into diversified equity funds.
IB asked, Hi I have 3 SIPs namely in HDFC top 200 fund-growth,Sundaram select Midcap - Appreciation and Reliance regular savings fund - Equity plan for a horizon of 180 months...Is it a viable investment
Sailesh answers, hi, except for Reliance fund, I recommend the other two funds. You may invest in DSP BR Equity fund instead of Reliance Regular Saving Fund.
cartman asked, hi i am earning close to 35, 000 rs a month my total savings is close to 20,000 a month in about 3 years i would require about 10 lacs for my furhter education...waht plan do you suggest for me ? Apart fom ppf which i am already saving
Sailesh answers, hi, to build your education corpus in 3 years you should not invest in PPF account. you should instead invest in short term income funds through the SIP mode.
ajayshah asked, sir,how is investment in ICICI Prulife-Elite Whealth?what r other options for better investment other than FD?
Sailesh answers, hi, this is an ULIP and not recommended at all. I would prefer to keep insurance and investment separate. For insurance term plans are the best. For investments, diversified equity funds, bank FDs and Gold ETFs are best.
vikram kk asked, what is the charge taken by financial planner for per annum?
Sailesh answers, hi, the fees charged by financial planners can range from Rs 10,000 to Rs 25,000 per annum
amitkmrj asked, Are short/ultra short term bond funds better than FDs in terms of post tax returns (10% bracket)??
Sailesh answers, hi, short term and ultra short term funds are capable of delivering higher returns than a bank FD. In fact in the past the returns from debt funds have been in the double digits. Debt funds are more tax efficient compared to bank FDs. Please note that short term funds do well only when the interest rates are on the decline. You have to play the interest rate cycle very well to benefit from investment in short term income fund.
Contractor asked, I have 1.5 cr in FDR of bank. Is it safe ?
Sailesh answers, hi, it is always better to spread your investments across 3-4 banks. Please ensure that your FDs are with well managed banks. PSU banks are more safe compared to private sector banks. you can also consider private sector banks for FDs.
Sj123 asked, I'm investing in Fidelity Equity, Fidelity India Growth, Fidelity Education and Marriage fund and in IDFC Classic equity, HDFC Top 200, HDFC Gold Fund for last 02-03 years. Pl let me know if my funds are good or I need a relook? Thanks
Sailesh answers, hi, you may continue with your investment in HDFC Top 200 fund. Fidelity MF has been taken over by L&T MF. you need to stop your further investment in this mutual fund. you should wait for L&T's performance before you continue investing in the fidelity funds. You may consider funds like Franklin India Bluechip Fund and DSP BR Equity Fund.
Sailesh says, Hi, we have run out of time. I thank you all for participating in the chat. I look forward to meeting you again next week.