rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Invest smart to be rich: Here's how

Invest smart to be rich: Here's how

July 08, 2011 14:53 IST

MoneyAre 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, 
Hi, good evening and welcome to this chat session

Sailesh says, Hi, for the benefit of those participants who look forward to my recommendation on equity funds – HDFC Top 200 Fund, DSP BR Equity Fund and Fidelity Equity Fund. In the ELSS category I currently recommend HDFC Tax Saver and Fidelity Tax Advantage Fund.

tuIdiot asked, what is primary n secondary??
Sailesh answers,  at 2011-07-07 16:04:16hi, investors should invest in IPos only if the the offer is fundametally sound. Unfortunately, investors have the impression that all IPOs can result in bigh bang listing gains. While this has been a trend in the bull run the stock may eventually underperform. Whether IPO or secondary markets, choose the stock based on its fundamentals and valuations
ashok asked, i have invested in ULIP LIC Profit plus the NAV price today is 11.66 Rupees & running under loss suggest me what needs to be done
Sailesh answers, hi, ULIPS are not at all good investment and insurance product. I never recommend ULIPs to investors. If you want to grow you money, then invest in well managed diversified equity funds. If your objective is to protect your life, then get a Term plan for yourself.
Varlax asked, HI I wanted to know if STCG i.e. buying and selling of shares can be shown as business gain
Sailesh answers, hi, STCG is different from Profit and Loss from Business or Profession. Once you treat a transaction as STCG you cannot claim it as profit from business.
vinod55 asked, Hi Shailesh, I want to invest surplus fund 4-5 lacs. Please advice
Sailesh answers, hi, investment decision should be linked to your investment objecitve, risk appetite and investment horizon. If your investment objective is to grow your money then you need to give atleast 5 years. For that the best investment would be equity funds. But higher returns come with higher degree of risk. If you want regular income with safety of capital then bank FD is the best
vjosh asked, I wish to invest ina scheme which will give me 12%returns at very low risk
Sailesh answers, hi, you can expect 12% returns only from equities. But equitirs carry maximum risk. IF you dont want to take risk then look for low risk investment instruments like MIPs. These are debt funds and ideal for investors with investment horizon of 24 months.
Sumit asked, for 2 yrs horizon, which mutual fund I should invest? Without tax saving.
Sailesh answers, hi, the best would be HDFC MIP - Long Term plan. This fund is a debt fund with a mandate to invest 25% of the corpus in equities. the balance 75% is invested in fixed income bearing securities
Sumit asked, for 2 yrs horizon, which mutual fund I should invest? Without tax saving.
Sailesh answers, hi, the best would be HDFC MIP - Long Term plan. This fund is a debt fund with a mandate to invest 25% of the corpus in equities. the balance 75% is invested in fixed income bearing securities
rajanhk asked, Sir, How much returns can I expect by investing Rs 10000/ month in SIP in MFs you mentioned HDFC Top 200, DSP BR, EQuity, Fiedlity equity, (overall Rs 10000/month) after 15 yrs ? (An approximate amount)
Sailesh answers, hi, from any equity fund your return expectation over 15 years should be in the range of 12-15%. This applies to all type of funds - large cap, midcap, opportunities, etc, etc.
WanaBeRich asked, I have around 10 Lacs which I wish to invest to enjoy maximum returns. I am 29 years old and currently earning 130,000/month Net. I hold no investments anywhere whatsoever and wish to begin with Equity and MFs..... Please let me know best options with maximum returns with less tax liability
Sailesh answers, hi, you can invest in the funds recommneded by me at the start of this chat. SIP would be the preferred mode of investment.
KULDEEP asked, Hi I have invested in Reliance Gold Mutual Fund @ 1000 PM It is good in this MF to invest
Sailesh answers, hi, if you dont have a demat account then you cannot invest in Gold ETFs. Therfore Reliance Gold Savings fund was introduced. You can invest in this fund
pax asked, Hi I wanto start sip of 3000 which one is betterHDFC Prudence or HDFC equity?
Sailesh answers, hi, on a risk adjusted return basis HDFC Prudence is good.
nm1 asked, Sir, Is bank FD is taxable ?
Sailesh answers, hi, yes interest earned from Bank FD is taxable under the head Income From Other Sources.
Balaguru asked, Is investing in IPO better than Mutual fund. If so what kind mutual funds / IPO can be invested incase of high rish, high returns?
Sailesh answers, hi, when it comes to NFOs from mutual funds, I dont recommend them unless the fund is very unique and adds value to your portfolio. NFOs lack track record. It is always better to invest in funds that have a proven track record of atleast 3 years to show for.
Siva asked, What about these funds for 10 years horizon of 3000 each: HDFC Top 200, HDFC Prudence, Fidelity Equity, Franklin Blue Chip, and Reliance Regular Savings Equity
Sailesh answers, hi, except Reliance Regular Savings, I like all the funds listd by you.
ac asked, what are good balanced funds?
Sailesh answers, hi, in the balanced fund category I like HDFC Prudence Fund.
palan asked, is it right time to invest in Gold & silver?
Sailesh answers, hi, I am more in favou of Gold than Silver. I think Gold will be more in demand purely as flight to safety. Till the time US economy comes back on track, Gold will be the most sought after commodity. Silver has more industrial demand. Plus there is lot of speculative activity in Silver. I would vote for Gold over Silver.
Rizwan asked, Is it good time to enter into real estate shares like Unitech?
Sailesh answers, hi, I have been asking investors to stay away from investment in Real Estate. The fundamentals do not justify higher prices of properties. they have to correct. So far they have not corrected. But I am convince that they wiill.Thefore i dont recommend investment in Real Estate of shares of real estate companies.
vandana asked, which one to choose for retirement planning ETF or Mutual fund SIP
Sailesh answers, hi, to plan for retirement one should invest in equity funds as well as Gold ETFs. I recommend non-index based diversified equity funds through the SIP mode.
harpreet asked, I am invested in rel diversified power and icici pru infra in addition to other good funds that you always suggest.My time horizon is 15-20 yrs.Do i stay invested in these two funds as the time period is large?
Sailesh answers, hi, I dont recommend sectoral funds and thematic funds. You are invested in both these funds. Accodingly I would advise you to redeem these funds and invest in the funds recommended by me at the start of this chat.
mukul asked, sailesh is it better to enter markets directly or through mutual funds
Sailesh answers, hi, one can invest in stocks only if he has the necessary time to monitor the company's performance and ability to analyse company's balance sheet. Otherwise it is better to invest in equity funds as the job of researching stocks and monitoring the portfolio is left to the professional fund managers.
raghu asked, Hi Sir i have 15L cash on hand. Yearly i need 10-15% income. which is the best investment option?
Sailesh answers, hi, if you need a return of 10-15% on a regular basis then you are asking for too much. In my view you can expect annual return in the range of 8.50% to 9.0% as this is the rate offered by bank FD currently. I am not sure if the FD rates will prevail at these levels for long. Thefore, you need to lower your expectation from 10% to 8% which is more realistic.
itsme asked, Which is better SIP OR MIP for good return LONG TERM(10-15 years)
Sailesh answers, hi, you are confusing the two. MIP stands for Monthly Income Plans which are offered by mutal funds. These are debt funds with small allocation to equities. It is ideal for investors with time horizon of 24 months. SIP on the other hand stands for Systematic Investment Plan which is the preferred mode or method of investing into mutual funds.
MONEY asked, MARKET TOUCHING 20000 SOON
Sailesh answers, hi, Indian economy is doing well. The only concern is with respect to crude prices. If prices remain high inflation will continue to remain high. Unfortunately, markets in India are driven by FIIs which bring in lot of money. If the FIIs remain happy and pour money into Indian equity market, then sensex can easily touch 20,000. Watch out for the foreign money flow. It is sentiments over fundamentals in this country,sad but true!
siddarth asked, Is it worth investing in the equity markets given the fluctuating returns given in recent times. What are the short medium and long term prospects
Sailesh answers, hi, f you want to grow your money then you have no choice but to invest in equity funds. Equity is the only asset class that has the potential to deliver returns that are higher than inflation. However, higher return comes with higher degree of risk. Thefore, it is important to invest in equities with a long term view, atleast 5 years. I cant say about the short term prospects, but in the long term, Indian equity market should deliver an average annual return of 15%.
Raahul asked, Hi Sailesh, recently got married...we both earn arround 90K...i want to invest atleat 5k..in addition to our current savings (Mutual fund)...i wanna buy a flat in mumbai (70 Lakhs) can u suggest some gud investment from short term perspective....
Sailesh answers, hi, if you are accumaulating money to pay for the down payment, then it is better to start SIP in Ultra Short Term Income Fund. These are best suited for investment horizon of less than a year.
SSSDSS asked, HDFCTOP200,DSPBRTO100,FIDELITY EQUITY,RELIANCE GROWTH , RELIANCE GOLD FUND RS 1000/PM SIP FOR 5 YEARS, & IAM PAYING RS.60000/-P.A. FOR LIC PREIUM MY AGE IS 42 YEARS PLS TELL ME THAT IS SUFFIENT OR PLS ADVICE ME FOR BETTER PLS REPLY
Sailesh answers, hi, you havent mentioned your investment objective as well as your investment horizon. Assuming that you are planning your retirement, you should let me know the retirement corpus you are aiming to build
Nikhil asked, I am 23 year old investor with a saving of 20,000 Rs/month. Recommend a financial plan for me..?
Sailesh answers, hi, ideally at your age you should be investing 70% of your savings into equity funds, 20% in Gold ETFs
Ragav asked, Hi Sailesh, My parents aged about 65 are planning to sell their house and would be getting around 40Lakhs. Please suggest some safe investment options for them
Sailesh answers, hi, the safe options is bank FD. You could put aside some money in equity funds, say 15%, to beat inflation in the long run. I am assuiming that you have taken care of long term capital gains tax on the sale of property.
rkdas asked, would you like to continue investing in SBI Magnum Tax gain Dividend scheme? or switch to some other. please suggest a best one?
Sailesh answers, hi, I would advise you to switch to Fidelity Tax Advantage Fund.
MD asked, To what levels do you expect the market to correct. I meed to make some lumpsum investments in Equity MFs so wanted to know what levels of the market should I wait for.
Sailesh answers, hi, if you are long term investor with an investment horizon of 5 years, then you should not worry too much about market correction.Go ahead and invest. I suggest SIP as the most preferred mode of investment as it does away with the botheration of timing the market.
srisr asked, I have 2L in BSL tax relief 96.... i dont need tax relief anymore... can i still continue investing in it as i want low risk.....
Sailesh answers, hi, if you dont want tax benefit then why invest in ELSS fund. I would advise you to stop the SIP in Birla Taxrelief and start in other funds like HDFC Top 200 Fund.
SAI asked, how is DSP BR TOP100 FUND
Sailesh answers, hi, good fund to invest in
SUDHIR asked, Currently I am paying a SIP of 3000/- in HDFC Top 200, 2000/- DSP BR TOP 100 EQUITY, 1500/- BIRLA SUNLIFE FRONTLINE EQUITY FUND AND SUNDARAM SELECT MIDCAP GROWTH 1500/ HOW is my portfolio?
Sailesh answers, hi, overall a very good portfolio. Continue to invest in these funds
pravin asked, Is it worth holding Reliance Natural Resourse Fund?
Sailesh answers, hi, I dont recommend this fund to any investor.
amit asked, How much return can we expect from a Balanced fund like HDFC Prudence Fund over a horizon of 2 yrs?
Sailesh answers, hi, you can expect an average return of 10-12% from a balanced fund provided your investment horzion is atleast 3 years. Not an ideal fund for 2 years.
Mehul asked, Since last couple of year, MF volumes have come down drastically (as agents dont get comission and hence MFs are not getting sold and hence number of new schemes have dropped significantly). Since MF is not attracting new money (and hence good fund managers), is it still good idea to invest in Mutual Funds?
Sailesh answers, hi, the performance of mutual funds is independent of the fund flows into the fund and industry as a whole. Dont worry about the fund mobilisation. If you have the money go ahead and invest.
aaa asked, Is there any tax benefits if i invest in SIP.
Sailesh answers, hi, SIP is a method of investing into mutual funds. Tax benefit is available only to ELSS Funds. You can invest in ELSS funds through SIP.
hari asked, for sip demat account is nessary?
Sailesh answers, hi, for SIP demat account is not compulsory. Demat is necesarry only for trading in stocks and Exchange Traded Funds (ETFs)
suriakumar asked, shall i invest in NEW PENSION PLAN (NSP) ?. Shall i invest yearly 30000 how much will i get after 60 years ?
Sailesh answers, hi, i adopted a wait and watch policy towards NPS. I would like to see the fund's performance before recommending the same to investors.
rkdas asked, I want to invest in Gold ETF. Can u suggest one?
Sailesh answers, hi, I recommend Benchmark Gold BeEs.
Ajith asked, Hi, I oppose investing in ULIP and invest more in MF+term plan. But financial planners says invest in all instruments? Whats your opinion on this
Sailesh answers, hi, ULIPs pay maximum commission to the advisors and agents. If your financial planner is not charging you a fee but selling you a LIP to cover his cost, then it is time to change your planner.
cgramesha asked, Hi, I have been investing in DSP BR T.I.G.E.R MF for last 4 years through SIP of Rs.3000 per month. Can you please suggest if this is good fund to continue? Good Day!
Sailesh answers, hi, I would advise you to switch to DSP BR Equity Fund.
krishnamurthi asked, Out of the current FMP open, which one according to you can fetch a return in excess of 10% p.a.
Sailesh answers, hi, to my knowledge no FMP is offering yield of 10%. If you have come acorss such a FMP please check with your advisor to ensure the credit quality of the portfolio.
Sailesh says, We have run completely out of time. I thank you all for participating in this chat. If you wish to get answers to your queries which were not answered during the chat, you may mail them to me at sailesh.multani@gmail.com. Please don't forget to mention your age and current asset allocation

Tags: SIP, HDFC, ELSS, STCG, IPO