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How to invest smart and be rich

November 03, 2011 17:10 IST

InvestmentAre 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?

Financial planning expert Sailesh Multani offered some valuable tips during a chat on Thursday. 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

Cheris asked, What is the best plan to secure child's education?
Sailesh answers,  at 2011-11-03 16:02:49hi, to plan for your child's future expenses on education and marraige you need to start building a portfolio of diversified equity funds. I am assuming that your investment horizon is atleast 10 years away. Ideally you should invest 70% in diversified equity funds through SIP, 15% in Gold ETFs and 15% in recurring deposit with a bank. I would not recommend any insurance plan for the purpose.
shri asked, I want to invest 10,000 every month through 5 SIPs. Can you please suggest 5 best mutual funds for a 3 year period or 5 year period.
Sailesh answers, hi, you may refer the name of the funds suggested by me at the start of this chat
TCS asked, sir, HDFC- Eq, top 200,Prudence, ICICI-Bluechip, Discovery, BSL divident, IDFC prem Eq -8K SIP -Is my invest has good funds?
Sailesh answers, hi, overall your portfolio looks ok to me. Please review your portfolio once every 6 months to ensure that it is growing optimally
nilesh asked, I am working in software industry and want to generate 2nd source of income how can I invest my monthly saving of 20000
Sailesh answers, Hi, first of all you need to define the monthly income you want to generate through your investment portfolio and by when. It is also important to define the period for which you will need this monthly income because you will have to factor in the inflation in your calculations. Then you can decide the asset allocation for your investible surplus of Rs 20,000. Also, you would come to know if Rs 20,000 will be sufficient to generate the monthly income that you desire to generate. If your time horizon to generate this income is 10 years away then you can invest as much as 70% in diversified equity funds and balance 30% in debt.
wipro asked, Invest in Gold ETF required Dement A/c?
Sailesh answers, Hi, yes for investments in Gold ETF, demat account is compulsory. If you do not have a demat account then you can invest in Gold Saving Fund. These funds invest in Gold ETF on your behalf.
Alankar asked, Dear Sir, my son is 2Yrs.4 months old and want to buy policy, request you to suggest.
Sailesh answers, hi, if you are planning for your child's future expenditure on education and marriage then you should build a portfolio of diversified equity funds. I dont recommend an insurance plan to plan for your child's future.
venkat asked, hi , i have invested 5 lac in stock market ( during 2009-2011 ) and got initial profit of 50k but at present i am with 1.5 lac loss( around 25% ) . can i hold all the stocks or do i need to sell some of them? please advice.
Sailesh answers, hi, first of all you need to get your portfolio checked with the help of a trusted investment advisor to ensure that the stocks that you own are fundamentally sound and have potential to grow for the future. If your stocks are fundamentally sound then you should hold on to them and wait for the markets to improve.
wipro asked, Why we have to invest only 5-10% amount in GOLD? as gold always give good return that any of the fund?
Sailesh answers, hi, it is true that gold as an asset class has been among the best performing asset class only in this decade. Traditionally Returns from gold have been more or less in line with inflation. Therefore it is prudent to allocated not more than 15% to gold.
wipro asked, how we can invest in GOLD ETF? I have saving A/c?
Sailesh answers, hi, you need to open a share trading account with a stock broker. You will also need to open a demat account. Buying and sell gold ETF is similar to stocks.
srdubey asked, i am investing Rs. 1000/- in Reliance equity opportunity, Reliance RSF equity, Reliance Gold fund, HDFC equity, HDFC midcap opportunity, Icicipru tax plan, icicipru discovery fund in each fund. How is my portfolio, suggest me any change required.
Sailesh answers, hi, you can exit Reliance Equity Opportunity Fund and ICIC PRU Tax Plan. In the ELSS category you can add Fidelity Tax ADvantage Fund. You may even consider adding DSP BR Equity Fund to your portfolio.
rad asked, I have SIP of 14K in Equity diversified MF should i continue or move the SIP to FD / FMP's.
Sailesh answers, hi, you havent mentioned the names of the funds. Assuming that you have invested in best of the funds, you should continue with your SIP. SIP as an investment strategy helps over the long term. you may no see immediate results out of SIP investments.
ajk asked, I save 40,000/- a month after all my expenses. I would like to have 1 Crore corpus in next 15 years, how should I plan? I am 28 now
Sailesh answers, hi, aauming that your invesments grow at an average annual rate of 10%, you can reach your target of Rs 1 crore in 15 years with a monthly investment of Rs 24,100. This investment should be in a mix of equity and debt
arunm asked, is it a good time to invest in debt funds now
Sailesh answers, hi, if you investment horizon is 18 months and more then it is certainly a good time to invest in short term debt funds. I am not recommending long term income funds at the moment.
krishnan asked, I have taken hdfc gold fund for Rs.10,000 is worth?
Sailesh answers, hi, you have taken the right decision. Allocation to gold in your portfolio should not be more than 15%.
ajk asked, Is is safe to buy Gold ETF in bulk now or will it fall again? Im planning to invest 10 Lakhs
Sailesh answers, hi, you should not buy all the gold for your portfolio in one shot. You should stagger your investments over a period of 6-12 months. Gold will be in demand as long as the western economies remain under financial stress.
badalnbv asked, Sir i m having Sundara Thematic energy fund in my folio but frm last 3yrs its not doing well whether i will keep n wait or shall i squre it off and invest in other folio.
Sailesh answers, hi, you have invested in a thematic fund. these funds do well only when the underlying sectors that constitue the theme do well. I would recommend that you exit this fund immediately and invest in a better performing diversified equity funds like the ones recommended by me at the begining of this chat.
jag asked, hi i hav bought a LIC money plus MF is it good plan it is better to hold it or try other plans or investments?
Sailesh answers, hi, as far as insurance is concerned I recommend only term Plan. If your objective is to grow your money then diversified equity funds are the best. you should continue with your existing policy but going forward you should buy an insurance plan only if you want to protect your life.
jay asked, Hi I am holding HDFC Tax Saver MF (Div). 3 yr is over. Should i Hold it?
Sailesh answers, hi, unless you are in need of funds, you should hold on to this fund.
nitinvinod asked, Hi Sailesh. I took the home loan of 1330000 somewhere 5 years back for 20 years with interest 9.23%. Now it is of 45 years and remaining principle is 1250000 with the interest rate 12%. I have some 2-3 lacs of money. I have 2 options: option 1) to invest in some land which will cost me around 2 lac. Option 2) To start prepaying the loan. Please suggest. Waiting for your precious commnets
Sailesh answers, hi, in my view you should prepay your home loan to the extent possible. It would be in your interest to get over with your home loan at the earliest.
RB asked, You asked, I don't have any gold fund or Gold ETF. Recently several fund house such as SBI, UTI and HDFC open NFO for Gold fund. Also one can invest in Gold ETF through demat A/C via SIP route? Which is better option for an investor?
Sailesh answers, hi, Gold ETF is preferred to Gold Saving Fund which invests in Gold ETFs. But Gold ETFs require demat account mandatorily and therefore lot of investors who dont have a demat account cannot invest in them. As an alternative Gold Saving Funds are ideal.
Hima asked, Hi Sir,me and my husband have bought 5 LIC policies worth Rs 130000 pa.Is it good to invest this much amount in LICs as in terms of returns or are there any other areas we should invest in?
Sailesh answers, hi, at the cost of sounding repetitive, I would suggest only Term plan when it comes to protection and risk management. If your objective is to grow your money then you should consider investing in diverisified equity funds.
pavan asked, Is it good to put money in PPF, or should i have FD in place of that
Sailesh answers, hi, PPF offers 8% tax free interest p.a. with yearly compounding. However the maturity period of PPF is 15 years. If time is not an issue with you then you should invest in PPF. PPF should ideally form a part of your retirement fund. Please dont forget tax benefit under section 80C. Please keep in mind that the maximum investment in PPF is Rs 70000.
kam asked, Hi I have JM fin. small and mid cap then it is taken into JM Multi Strategy Fund - Growth option, should i keep it or sell as it is almost 4 year
Sailesh answers, hi, in my view you should exit this fund and consider better performing fund like DSP Small and midcap fund for your portfolio.
parin asked, how is the performance of tata-aig invest assure ulip ..Do i need to continue or exit
Sailesh answers, hi, ULIPS are not an ideal investment or insurance product. I would not recommend ULIPs to any investor. IF you want a risk cover for your life, you should buy a Term Plan. If you want to grow your money buy equity funds. The idea is to keep investment and insurance separate.
hj asked, I have taken 2 year back HDFC pension super (without insurance then) with 3 Lac annual prem, I am 49 and taken for 10 year term.. your comments on this pl?
Sailesh answers, hi, I dont recommend Pension plan to plan one's retirement. The best thing to do is to build a retirement corpus consisting of equity funds, bank FD and Gold ETFs. The corpus should last your life time and should be large enough to generate regular returns to meet all possible post retirement expenses adjusted for inflation.
asdfg asked, Is investing in gold loan companies like Muthoot and Mannapuram better than investing in Gold ETF's? Which one should i choose from the two?
Sailesh answers, hi, my opinion would be in favour of Gold ETFs.
R S MALHOTRA asked, What are the future prospects of ICICI Pro infrastructure fund and HDFC Infrastructure funds I have invested 25000/- in these funds since 2008.
Sailesh answers, hi, these are infrastructure funds which are thematic. these funds will do well only when the infrastructure related sectors do well. It is always better to invest in diversified equity funds that have the flexibility to invest in stocks across the sector.
garg_amitin asked, Sir, I have invested in Sundaram Capex from last three yrs. Whether should i Continue?
Sailesh answers, hi, this again is a thematic fund. Please exit this fund and invest in diversified equity funds recommended by me at the start of this chat.
R S MALHOTRA asked, Should I withdraw theinvestment made in Rel Natural Resources fund.
Sailesh answers, hi, this fund is certainly not among the best performing fund. It would be wise on your part to exit this fund and invest in better managed funds like HDFC Top 200 Fund and DSP BR Equity Fund.
nitinb asked, for tax saving investment , what is better ? ELSS , FD , NSC or ULIP?
Sailesh answers, hi, except ULIP all others are recommended.
Roger asked, Which is the best Gold ETF to Invest in?
Sailesh answers, hi, recommend Goldman Sachs Gold ETF which is known as Gold BeES
rad asked, I have invested in DSP BR Top100 Eq 6K + IDFC Premier Eq a(G) 4K + ICICI PRu Dynamic 2K +HDFC Top 200 - 2K
Sailesh answers, hi, all are good funds. Hold on to these funds.
SP21 asked, Dear Sir, Your View on HDFC Top 200, HDFC Midcap Opp., Fidelity India Growth & Franklin India Bluechip. I Started SIP for 36 month @ Rs.1000/- pm in each fund. Thanks
Sailesh answers, hi, all the funds lsited by you are among the top performing funds. you should continue with your SIPs in them
tom asked, What is the safest and fastest way to get assured returns-Share Market, SIP, Gold or any other source???????
Sailesh answers, hi, safest and fastest are contradictory in nature as far as investments are concerned. If you want safety of capital with assured returns, then you should look at bank FDs
tom asked, What is the safest and fastest way to get assured returns-Share Market, SIP, Gold or any other source???????
Sailesh answers, hi, safest and fastest are contradictory in nature as far as investments are concerned. If you want safety of capital with assured returns, then you should look at bank FDs
shant asked, Hi Sailesh ,How do you rate JM Money Manager - Super in the liquid funds category ? if not, please let me know your picks in liquid funds
Sailesh answers, hi, I would recommend HDFC Cash Management Fund - Savings Plan in the liquid fund category.
vaibhav asked, If each unit of gold ETF represents a gram of gold why are the market rates of each of them different?
Sailesh answers, hi, the market rate can vary on account of the tracking error, fund expenses and the cash component in the portfolio.
nk asked, I invest 15000 pm in EPF. Have adequate insurance. Want to invest 25000 pm in equity/gold fund for 15 years. Please suggest fund wise SIP. THANKS
Sailesh answers, hi, please refer the names of the fund recommended by me at the start of this chat.
RB asked, I have not invested anything in Gold. My all investments are SIP based and mostly in diversified equity fund such as HDFC Top 200, Fidelity EF and DSP BR Equity, Quantum equity and in HDFC Prudence and BSL gilt as balanced fund. My argument that if equity fund do well in long run, the Gold price do not match the return. Is it a right decision or should I consider some gold fund as well? I also have NifTY ETF buying 2 units/month using demat A/C.
Sailesh answers, hi, you can have major allocation to equity funds. But you should have 10-15% allocation to gold via the Gold ETFs. Gold acts as a safe haven in times of financial crisis like the one we are witnessing in europe. Gold will be the most sought after commodity in such times.
gjm asked, Good Evenning Mr.Shailesh, I have 1.7 Lakhs in FD's @ 7.5% pls advise if there is any other option to get better returns i want this money after 12months
Sailesh answers, hi, one year rate of interest on Bank Fd is in the range of 9.50% to 10.50%. You should shift your money from existing FD to new FD.
ajk asked, Is LIC Jeevan Anand a good policy? I am investing 27,000 p.a in it since last 2 years and have to do it for next 31 years and after that I will get 55 Lakhs it seems, sounds OK?
Sailesh answers, hi, you need to decide what will you do with the maturity value of your insurance plan. Will Rs 55 lakhs be sufficient enought to meet the goal you have set for yourself. In my opinion, insurance plans are ideal only for protecting one's life. To grow your money, you should invest in diversified equity funds.
Vishnu asked, I have home loan for 13 Lacs with 10 lacs pending. Right now, interest rate is 12%. ICICI gives option to fixing the interest for 11% for one year for a fee of 6,500. Is it good to go?
Sailesh answers, hi, interet rates have peaked and may begin to decline after a year. Therefore, I wouldn' recommend a change if it is only for a year.
rgk asked, i have invested 170000 in sbimf last year which got 370 day tenure and on expiry i got 183875. Is this was a good short term investment against FDs
Sailesh answers, hi, your return is approx 8.16%. If this is a post tax return then you should be happy about it.
DRONAW asked, Dear Sir I have a income about 1.50 lakhs as salareis and about the same in perks and perofrmance bonus. i have 2 kids 24 son and 16 yrs old daugheter both students. i need guidanace for investment . current liablities in car loan, personal loans and otehr payables are around 40000 per month suggest a suitable plan
Sailesh answers, hi, from your query I can understand that you will have various goasl to meet over a period of time. The best way to meet all your goals is to get a financial plan written for yourself with the help of financial planner. The plan will serve as a roadmap as to how you should go about investing your money so that you are able to meet all your goals on ontime.
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 sailesh.multani@gmail.com.