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 an hour-long chat on rediff.com, 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, DSP BR Equity Fund and Fidelity Equity Fund. In the balanced fund category, I recommend HDFC Prudence Fund. In the ELSS category HDFC Tax Saver and Fidelity Tax Advantage Fund
Capricorn asked, Is it good time to invest in Share market & what are the options for fixed deposits for three lakhs & above.....
Sailesh answers, at 2012-03-22 16:02:48hi, if you are long term investor who believes in the India story (domestic consumption boon),you should go ahead and invest. As an alternative to bank FDs you should consider investing in Fixed Maturity Plans (FMPs)which are offered by mutual funds.
pratheep asked, I am 36 years old i need more than one crore in my 50 years. suggest a good mutual funds and also how much should start to invest in mutal fund monthly(SIP)?
Sailesh answers, hi, assuminng an average return of 10% over the next 14 years, you should consider investing a sum of RS 27,500 (approx.)to accumulate a sum of Rs 1 crore
ravi asked, Hi Sir, I have lost almost 2 Lacs in the current year share market, I believe this loss can be excepted from tax, how can I do that? Please advise. Advance Thanks Ravi.K
Sailesh answers, hi, if you have bought fundamentally sound stocks/equity funds then you dont have much to worry about. Stock market overall has posted negative returns in the last one year. Your short term capital loss can be set off against short term capital gains
Satish asked, What are +points in PPF
Sailesh answers, hi, all the features of PPF like tax benefit, rate of return of 8.6% p.a which is tax free and annual compounding are the plus points of PPF. Even the maturity period of 15 years can be considered to be good if it is used for long term goals like retirement
atjoy asked, As a general rule from the point of financial planner, can u tell me how much of annual salary one should spend to buy a car.
Sailesh answers, hi, you should go for a car that is within you budget after considering your important goals like your children's education, marraige and your reitrement. Dont plan for a car that is unaffordable and which may impact your other goals negatively.
Avni asked, I have following MF SIP - HDFC Mid Cap - 4500 ICICI Pru Dynamic - 4500 DSP BR Equity Fund - 1500 HDFC Top 200 - 3000 - Large Cap - 3 Star - Rank 3 HDFC Standard Life - 5000 HDFC ETF - 1 Qty every month ICICI Pru Focused Blue Chip Equity Fund - 2000 Can Rebecco Equity Tax Saver - 2000 ICICI pru balanced Fund Growth - 2000 ---- My target is 2 crore after 20 years, assuming cumulative return of 7 percent at least
Sailesh answers, hi, overall a good portfolio though there are so many funds which will make it difficult for you to monitor and track them. You can easily expect a return of 10-12% from your current portfolio provided you keep a watch on your funds and book your profits regularly.
jagbir asked, Sir I am into SIP (SBI,ICICI, Reliance)for last about 2 years but the returns are negative. suggest the way out
Sailesh answers, hi, the equity market has in general delivered negative return in the past 18-24 months. Therefore it is not unuuual for you to see negative returns from your funds. you havent mentioned the fund name, therefore it will be difficult for me to suggest if your funds are fundamentally strong.
Brajesh asked, Hi, I have been investing in SIPS Rs 1000 each in HDFC Equity,HDFC Top 200, Birla Sun Life Frontline Equity Fund-Growth,Fidelity India Special Situation Fund. pls suggest should i continue or do i need to change?
Sailesh answers, hi, overall a good portfolio. Continue to hold your funds.
Tathagata asked, Can I invest in NCD in private sector ( Yield is very high) ?
Sailesh answers, hi, please check the credit quality of the debenture you are considering to invest in. Also, check the overall debt portfolio of the company to ensure that your NCD is serviced on time
vishal asked, sir,is LIC insurance is better option than nay other private insurance?
Sailesh answers, hi, LIC schemes are very expensive in terms of premium. There are a lot of players in the insurance industry who are offering much better products for lower premiums. Please dont select an insurance plan from LIC merely on its past reputation. Evalute the insurance provided on the premium and claim settlement ratio.
ketan asked, In the present situation is it better to invest in stocks or FDs or real estate for long term
Sailesh answers, hi, it is always better to have a diversified portfolio of investment instruments. Equity, debt and real estate are a must in your portfolio. The allocation of these asset classes will depend on your expected return, risk tolerance and investment horizon. For long term goals, you may consider higher allocation to equity. For short term goals higher allocation to debt would be preferable.
shata asked, Hi, I want to invest in funds to save my tax that would give me good returns over the year. But dont want to go for long term plans
Sailesh answers, hi, in the case of tax saving schemes you dont have a choice as far as lock in period is concerned. All ELSS funds have a mandatory lock in period of 3 years.
Saurav asked, I'm planning to buy a house in next 2 years, and right now have 4 lakhs which I want to invest for the next 2 years. Can you suggest an investment plan?
Sailesh answers, hi, since your goal is 2 years away you should invest your money into ultra short term bond fund ot bank FDs. Please dont invest in equity funds or stocks if your investment horizon is less than 3 years.
pnp asked, hello sir I can invest 5000to 7000 per month need 50 lakhs after 15
Sailesh answers, hi, assuming an average return of 10% p.a. on your portfolio, you will have to invest a sum of Rs 12,000 yto reach the target of Rs 50 lakhs in 15 years.
dutta asked, Is the return guaranteed (like 10% or 11%) in FMP like in fixed deposit
Sailesh answers, hi, the FMPs work on the principle of proposed yield. That means the fund's yield is not known till the time the issue closes. The fund's yield can deviate by .50% from the proposed yield. If the fund is managed well then the FMP does delivered the expected yield. However, in the past, there have been few instances where the FMPs have not lived upto their expecations.
bvmallikarjunrao asked, between I AM CONTINUING HDFC EQUITY, DSPBR EQUITY, FIDELITY EQUITY AND ICICI FOCUSSED BLUCECHIP. I WANT TO STOP ONE FUND TELL ME WHICH FUND I CAN STOP INVESTING VIA SIP.
Sailesh answers, hi, stop ICICI Focussed Bluechip Fund.
Hirani asked, Hi Sailesh, I would like to know how safe and profitable is Invesment in Mutual fund keeping in view the financial irreguralites by many mutual fund house
Sailesh answers, hi, the mutual funds are very well regulated by SEBI. No doubt there have been few reported cases financial irregularities by fund houses. However, there is no single case where the investors have lost their money because of financial irregularities by fund houses.
fgsdgffdg asked, hi , can u tell me whether the investemnt from ELSS will still be applicable for tax exemption for the year 2012-13
Sailesh answers, hi, ELSS investments will qualify for tax deduction under section 80C for the forthcoming financial year.
sahil asked, How much percentage of salary should one be investing. What should be the Mix, FD, SIP, Homeloan, if you can pls advise
Sailesh answers, hi, if you can save 40% of your take home income then you will be considered to be living within your means. There is no fixed rule that I know of that suggests an ideal EMI amount. In my opinion your EMI amount should leave behind sufficient savings to help you plan for your other basic goals like children's eduction, marriage and retirement.
neeta asked, Hello, do child plans give good returns, my daughter is 1-1/2 yrs now
Sailesh answers, hi, to build your child's education and marriage fund, you should start building a portfolio consisting mainly of diverisified equity funds. 5-10% allocation can be made to gold. The rest can be invested into debt instruments like bank FDs, recurring FD, etc. I do not recommend children plans offered by insurance companies to plan for children's education and marraige.
Ejaj asked, I have taken birla sunlife platinum advantage insurance policy for 10 years.premium for 5 years.Should I continue or discontinue?
Sailesh answers, hi, you have taken a ULIP. I dont recommend ULIP as I recommend only a term plan when it comes to insurance. Accordingly I would recommed that you exit your ULIPs and reinvest the amount into well managed and diversified equity funds. For insurance you should consider taking a term plan.
tushar asked, i want to have 1 crore at age of 60. I am 41 right now. How do I achieve this. How much amount and where?
Sailesh answers, hi, to reach your target of Rs 1 crore in 19 years you need to invest a sum of Rs 14,800 per month in a mix of equity funds and debt instruments like bank FD, PPF, etc.
123 asked, Sailesh JI, is it worthwhile to invest in NPS ? What is your recommendation ?
Sailesh answers, hi, I am still not convinced about NPS. I would like to wait and watch this investment instrument. Till then I would recommend the traditional instruments like PPF, EPF, Bank FDs and equity funds
Vidya asked, Hi, Am 34 yrs now. Am planning to invest on a Pension fund & am looking for a return of say 10K/month after my retirement (say 58yrs) Pl. suggest me an appropriate fund / scheme along with the approx amount am supposed to invest monthly now.
Sailesh answers, hi, instead of buying a pension plan to generate an income of Rs 10,000 per month when you retire, I would recommend that you get your retirement plan written with the help of a trusted financial planner. The plan will suggest the retirement corpus you should aim to build so that it can generate adequate regular income to meet all possible post retirement expenses. The retirement corpus should ideally consist of diversified equity funds, bank FDs, PPF, EPF and Gold ETF.
rb asked, Hi Sailesh, Will you please explain the tax implication of MF return? Let say I started a SIP today for Rs. 2000/=/month for 5 years? After 5 years if my average return is 10% how much tax I have to pay during tax return?
Sailesh answers, hi, as of now there is no tax on long term capital gains arising from equity oriented mutual funds. Long term capital gains means capital gains arising after 12 months from the date of investment.
Sudin asked, hi.............. What is the best way to invest a small amount of money every month for a long period ?
Sailesh answers, hi, the best way of investing your small regular savings is SIP or Systematic Investment Plan. Under this style of investment you need to invest a fixed amount into a particular mutual fund on a specified date. SIP is considered to be the most easiest and safest way to build wealth over the long term.
aaa asked, 1. SBI Contra Mutual Fund 2. Reliance Growth Mutual Fund 3. Franklin India PRIMA PLUS-GROWTH 4. IDFC Small and Midcap Equity Mutual Fund 5. DSP BR Equity Fund Mutual Fund 6. Tata Pure Equity Mutual Fund 7. Kotak Opertunities Mutual Fund 8. ICICI Prudential Tax Plan Mutual Fund 9. Sundaram select midcap 10. Birla Sun Life Frontline Equity - Plam A
Sailesh answers, hi, majority of your funds in your portfolio are midcap baised. Midcap stocks are more volatile compared to large cap stocks. As a result you will see more than average volatility in your portfolio. This strategy will not help you build wealth in the long run. You should have not more than one or two midcap funds in your portfolio. Your portfolio should have more of large cap funds.
Sailesh says, We have run completely out of time. I thank you all for participating in this chat. If you have any questions which were not answered during the chat, please mail them to me at email@example.com.