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Some golden investment tips

July 28, 2011 16:57 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, 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 – HDFC Prudence Fund. In the ELSS category – HDFC Tax Saver and Fidelity Tax Advantage Fund

Anshu asked, Is it always neccessary to have investment in SHARE MARKET directly,or with FDS,ULIPS and mutual funds...since they are long terms?
Sailesh answers,  at 2011-07-28 16:01:23Hi,. Buying a stock on your own would involve researching the stock. This would require detailed information about the company's financial performance and knowledge of the sector in which it operates. This kind of information is typically available to equity research houses. A lay investor has to rely on publicly available information which is not at all useful to form an opinion about the company's future performance. My preference would be for mutual funds which are managed by professional fund managers. These fund managers are in a better position to track and analyse a company's performance compared to other companies in the same industry. ULIPs are a definite NO. ULIPs should be altogether avoided as an insurance and investment product
kishan asked, should i go for L& T IPO
Sailesh answers, Hi, L&T Finance Holding should be given a miss. In my opinion the price of the IPO is on the higher side. IF you are looking at listing gains similar to the ones witnessed in the past then it is a different matter. I am in no way suggesting that the IPO will list at a huge premium. If you are serious long term investor looking at building a portfolio of bluechip companies then this should could be ignored.
Juhi asked, Hi. Could you please put in your valuable comments on the below portfolio. I have recently revamped based on your last chat discussions though i was not lucky to get a direct answer. 1) HDFC Top 200 2) HDFC Prudence 3) DSP Top 100 (changed from DSP Equity previously) 4) IDFC Small & Mid Cap 5) Reliance Regular Savings & 6) ICICI Pru Discovery. My investment is mainly for capital appreciation say atleast 8-10 years unless there is an emergency. Thank you in advance. Juhi
Sailesh answers, Hi Juhi, your portfolio is perfectly ok. Keep on doing the SIP for the next 8-10 years. I am sure you will be able to build wealth out of your regular savings via SIP. Please don't forget to review your portfolio every year. IF possible engage the services of a trusted investment advisor who can help you with the same.
RAJESH asked, need a good pension plan
Sailesh answers, Hi, I don't recommend pension plan for retirement planning. To plan your retirement, you should first get a retirement plan made with the help of a trusted planner or advisor. The plan will tell you how much retirement corpus you need to build by the time you retire. This corpus should then be created with the help of regular savings into various asset classes like equity, debt and gold. Merely buying a pension plan will not ensure a secured and financially comfortable retired life.
ananthblr asked, sir, i am tired of reading., asking questions about the investments nd stock market., can u briefly tell me in next ten years whts the story of our country with regard to growth
Sailesh answers, Hi, if you are willing to invest for 10 years then you should not be worried about investing in India. The domestic consumption story will drive the Indian economy in the many years to come. Have no doubt and invest.
ck asked, i am an entrepreneur. i have less time for share market. i lost lot of money. kinldy suggest other options
Sailesh answers, hi, if you are willing to invest for 5 years and more then you should definitely look at mutual funds. Invest in funds with a diversified portfolio with a bias for large cap stocks. SIP is the best way to invest in equity funds.
sra asked, do we get loan on PPF
Sailesh answers, hi, you can withdraw money from PPF after 6 years.
vivek asked, i am investing in sip monthly 1000 in dsp black rock top 100 equity fund .is it advisible increase the sip amount how this fund will perform
Sailesh answers, hi, this is a very good fund. Rather than increasing your SIP in this fund I would advise you to start SIP in HDFC Top 200 Fund. By doing so you will be diversifying your portfolio.
shantu asked, i have started a sip of 2000/- in hdfc equity (G). i want to start investing in sip mode in another two funds. kindly suggest two good funds for me for long term.
Sailesh answers, hi, you may refer to the funds recommended by me at the start of this chat
bumba asked, Hi, I have invested in HDFC Top 200, HDFC Equity, HDFC Growth, Fadility Equity, Reliance Growth, DSPBL Top 100 all in Growth. How is my portfolio. Suppose I want to increase my SIP amount in some fund, can I do that maintaining same folio.
Sailesh answers, hi, overall a good portfolio. Increase SIP in HDFC Top 200 and Fidelity Equity Fund.
Kurdi asked, Hello Sir I am planning to invest in PPF to increase my depth component. I have two questions: 1) So if you invest whole 70K at the starting of year(for PPF) then every month I will get interest and will refelect in the records annually? Is the correct? 2) Is it better to go for RD and than put RD to PPF? If I plan like this I can save 2.5lakh on the principal? Is it good idea to go for this?
Sailesh answers, hi, you can invest Rs 70,000 at the start of the year. The interest is credited to your account at the end of the year. I am not very clear about your question with refernce to RD.
bmthakur asked, Sir I am investing Rs.2000.00 in hdfc top 200,Rs.200.00 birla sun life frontline as SIP & Rs.4000.00 monthly PPF in SBI, Is these right options
Sailesh answers, hi, Perfectly ok
sagar asked, I have invested in SBI mutual funds like tax gain series in 2008 ,but i got returns hardly.I want to invest around 2 lakhs in share market,kindly advise what guidlines to follow to pick the shares.I want to do intra-day trading?
Sailesh answers, hi, first an foremost you should take out the thought of doing day trading. Believe me you will never make money in day trading. Only your borker will. If you find it difficuly to manage stock portfolio on your own invest in equity funds. You may invest in the funds recommended by me at the start of this chat. Regarding SBI Magnum Tax Gain - exit this fund once you complete the mandatory lock-in period of 3 years. Invest in Fidelity Tax Advantage Fund
babul asked, Which is better,mutual fund,FD or share?5 years term
Sailesh answers, hi, if you are not willing to take risk then FD is better to you. IF you are willing to take risk then you can even opt for Monthly Income Plan (MIP) offered by mutual funds. These funds are debt funds with a small exposure, 15-25% to equities. These are ideal for investor with investment horizon of 18-24 months with a low appetite for risk.
BLM asked, I am planning to invest 5 Lacs in Bank FD for 5YRS.Any safer bet?.
Sailesh answers, hi, nothing can be more safer than a bank FD. If safety of capital is your main objective then FD is the only option you have.
mf asked, I am investing in 4 diversified mutual funds via monthly SIP - HDFC TOP 200, HDFC EQUITY, HDFC MIDCAP OPPORTUNTIES, HDFC PRUDENCE. is my fund selection correct and what should be % allocations across these 4 funds? I also invest 10% in a gold savings fund. should i increase the % allocation in gold savings fund?
Sailesh answers, Hi, except for HDFC Midcap fund I like all the other funds. Having said that I would also like to draw your attention to the fact that you have invested in the funds from the same fund house. Now, this is a risky strategy. It would be prudent if you could diversify your portfolio by investing in funds from other mutual funds. 10% investment in Gold ETF is a good decision.
Sushil asked, Hi! I just want to ask, what is the meaning of lone term> Geberally people say if you have a horizon of 1-2 years, your returns will be better. If somebody entered Reliance Infra @1100 for say one year, now it is down to 538. What should he do?
Sailesh answers, hi, there is no definition of long term. Honestly speaking, long term according to me would mean atleast 5 years. If you really want to realise the potential of equity then your investment should be for 5 years. Having said that I would like to emphasise that one shoul evaluate his protfolio from time to time to see that the companies held in the portfolio are fundamentally sound.
red asked, The news is that the market will slide down till december. is it true?
Sailesh answers, hi, I have the news that market will do well from August and till Diwali the market will touch its all time high. There will be conflicting views in the stock market always. What I am trying to say is that you should not worry about what markets will do in the next 6 months or a year. No one can predict the direction of the market in the short term. Based on fundamentals I can say with confidence that Indian economy as a whole will do very well in the next few years to come. A decent portfolio of stocks should be able to generate average annual return of 12-15%. Dont get swayed by what people say about markets in the short term. Start your investements today. Tomorrow may be late.
red asked, Shailesh , i want to invest 15000/- in lic. kindly let me know which 1 is the best. also my family shud b covered in it.
Sailesh answers, hi, I dont track insurance plans but I can tell you that you should only look at Term Plan with a decent sum assured. IF your agent has suggested anything besides Term Plan you should ignore it.
sahanas asked, I want to build up an agressive MF portfolio to get maximum returns with an investment horizon of 5 years investing through SIP Rs. 20000 per month. Kindly suggest suitable funds
Sailesh answers, hi, to build an aggressive fund portfolio you should invest in HDFC Equity and DSP BR Equity Fund. these funds invest in a mix of large and midcap stocks. These are managed aggressively and have a fantastic track record.
investor asked, hi i am 38 male from mumbai- i have been investing thru SIP - 5000 in HDFC Top 200, 2500 in reliance regular saving and 10000 quarterly in DSP black rock top 100 let me know if my investments are proper - should i convert the quarterly sip into monthly
Sailesh answers, hi, overall good funds. COnvert your quarterly SIPs into monthly SIPs.
newvc asked, Is it advisable to invest in unlisted comapny? name of the comapany is kootol software ltd.
Sailesh answers, hi, invest in this company only if you want to lose your money.
gop asked, are you positive on investing in Gold for nexrfew years?
Sailesh answers, hi, I am in favour of investing in gold ETFs as an hedge for my portfolio. I dont recommend gold to make trading gains. Gold according to me will do well so long as USA and Eurozone battle with their debt problems. It will be many years before these economies come back on track. Till then make hay will the Gold shines!
NP asked, I am 30 year old and my current salary is 55K a month, next month it will change to 75K a month. I have investment in LIC Policies of about 80K a year, ICICI Prudential Pension Plan for which I pay about 50K a year and have a loan of about 16 Lac for which I pay about 15K a month. Want to know how well I can manage and save it also I have a son for whom I want to build a good portfolio which will give him a very good return after 20 years. Please suggest!!!
Sailesh answers, hi, first of all congratulations on your increment. from your question I assume that you want to plan for your retirement as well as your son's future. the best strategy according to me would be to get a financial plan made for yourself. The plan will tell you as to how should you invest your monthly savings to reach each of your goal on time without taking too much of risk. Take help of a trusted investment advisor known to you.
mani asked, i want to know how we can take benefit from bank FDs by investing in senior citizens name and then transfering the amount by will to avoid tax
Sailesh answers, hi, I am not sure if Income Tax laws permit that, Please check with your tax advisor regarding the same.
Shalabh asked, Which of these are a better investments: Equity, Land, Home , GOLD. Please priotitze
Sailesh answers, hi, Currently my vote is in favour of Gold and Equity. I am not at all in favour of real estate.
shyamsaxena asked, dear sir,i live and work in dubai. currently iam in india and just not able to decide where to invest my saving and earn atleast 15 to 18 percentage per annum without any risk. pls advice. thank you
Sailesh answers, hi, your expectation with respect to returns is on the higher side an that is the reason you are disappointed. You just cannot expect to make 15-18% without taking risk. This type of return is possible only from equity investment which carries maximum risk. IF safety of capital is important to you then you should invest in Bank Fd. your returns in that case will be in the range of 9.50% to 10%
ARJUN asked, I HAVE INVESTMENT IN HDFC EQUITY, HDFC TOP-200, FIDELITY EQUITY, DSPBR EQUITY, ICICI FOCUSED BLUE CHIP FUND, IDFC PREMIER EQUITY PLAN-A, ICICI DISCOVERY FUND AND DSPBR SMALL & MIDCAP FUND. SUGGEST ME IN WHICH FUNDS I CAN DISCONTINUE SIP.
Sailesh answers, hi, for the time being discontinue SIP in ICICI Focusses Bluechip Fund.
devang patel asked, What is the best plan for Children eductation ? my child is 6 yrs
Sailesh answers, hi, to plan for your children's education you should build a portfolio of equity funds. Start SIPs in 4-5 well managed diversified equity funds. You may refer to the funds recommended by me at the start of this chat. SIP is the best way of build your children's education corpus. I am not in favour of buying children's plan sold by insuracne companies.
ramesha asked, Hi, I have been investing in Dsp Br Tiger fund for 4 years now through SIP. Do you think it is right investment for next 2-3 yesrs?
Sailesh answers, hi, this is not among the better managed funds from DSP BR. you should switchout from this fund and invest in DSP BR Equity Fund.
Subirbiswas asked, Hi, recently I changed my company and I withdraw all my PF amount (around 3 Lakhs). Can you please suggest how can I invest this money? I am interested to invest this money in long term.
Sailesh answers, hi, you should consider investing this money into balanced funds. Balanced funds invest 65% of their corpus in equitites. The rest is invested in debt securities. I recommend HDFC Prudence Fund and DSP BR Balanced Fund.
sundeep asked, should i invest in quantum long term equity fund?
Sailesh answers, hi, this is a good fund and has done well. This is among the very few funds that follow Value stlye of investment. The fund can be invested into.
vibhu1 asked, Rs. 2,000 each sip for HDFC PRUDENCE FUND - GROWTH PLAN, Fidelity-Equity-Fund, BIRLA DIVIDEND YIELD PLUS - PLAN B ( GROWTH ), HDFC TOP 200 FUND - GROWTH PLAN, HDFC EQUITY FUND - GROWTH PLAN, ICICI PRUDENTIAL DISCOVERY FUND -GROWTH, ICICI PRUDENTIAL DYNAMIC PLAN GROWTH and 1 GOLD ETF every month. Also PPF, EPF, Shares via SIP. Looking for long term 30 yrs for retirement and for 1 kid education and marriage. Please let me know if its fine.
Sailesh answers, hi, overall looks ok to me. I cant comment whether your curreny investment strategy will help you achieve all the financial goals that you have set for yourself. IT would be better to get a financial plan for yourself with the help of a trusted financial advisor.
MrFinance asked, Hi Sailesh, I've an old LIC policy for which I paid premiums nearly 6-7 years. Premium amt approx 40K p.a. Should I close it off and take out my money or it can be made paid up or should I continue paying premiums. Which is beneficial?
Sailesh answers, hi, you have not mentioned the type of policy. You should send me more details to enable me to answer you in detail. My email id is : sailesh.multani@gmail.com
samj asked, Sir, I have home 20L loan, after paying EMI I can save up to Rs.15000/pm, please advice if I should be prepaying excess money towards home loan every month OR make an RD of Rs.15000/pm and repay home loan in bulk? Please advice.
Sailesh answers, hi, if you can increase the EMI then nothing like it. Your aim should be to get out of the home loan as quickly as possible.
pamukherjee asked, How good is the New Pension Scheme introduced by the government ?
Sailesh answers, hi, in my view one should wait an watch the performance of the funds under the NPS. There is no track record to enable one to take an informed decision.
RajK asked, Hi Sailesh, I am 41 years in Trivandrum - 4 dependents - 2 school going kids - 7 and 11 years, and an aged mother. Monthly saving after expenses including a 25 year housing loan is around 10K. I invest around 25 K per year in PPF, 20 K in LIC, and some short term tax saving instruments. I think I need to target a savings of around 40-60 lakhs by 60. 1) What are the best options available for me? 2) Any option for buying land in small instalments?
Sailesh answers, hi, you should definitely get a financial plan made for yourself. The plan will tell you how should you go about investing your money so that each and every goal is met on time. Take help of a trusted investment advisor or financial planner known to you.
Renny asked, Dear Sir, recently Citi bank aprooved a loan of Rs. 2L at the rate of interest 11.5% reducing Balance for four years. I am planning to get this load and invest. Can you suggest which one i go for? which will be the best return of money?
Sailesh answers, hi, I am not in favour of taking a personal loan and investing into stock market. This would definitely not be prudent. I would advise you against taking a loan.
Anupama asked, How good is the real estate market for investment in the current scenario?
Sailesh answers, hi, I am not in favour of investing in properrty at the moment. In my view the there is no justification for real estate prices to go up when there is no demand. It is the nexus between the banks, builders and politicians that is responsible for the prices to stay high despite fewer bookings and higher interest rates. In my view the bubble can burst anytime. I have been maintaing this view for long time and I still maintain the same.
tiruttani asked, I am 53 and to retire in one year as per company's policy. I have 45% exposure to equity/mutual funds and 55% towards debt, with plans to have my only daughter to get married soon. My wife is a home maker. Do you suggest any change in my asset allocation?
Sailesh answers, hi, your asset allocation looks perfect to me. I wish you all the best in your life.
tiruttani asked, I am 53 and to retire in one year as per company's policy. I have 45% exposure to equity/mutual funds and 55% towards debt, with plans to have my only daughter to get married soon. My wife is a home maker. Do you suggest any change in my asset allocation?
Sailesh answers, hi, your asset allocation looks perfect to me. I wish you all the best in your life.
mg asked, I have invested in JM Basic Industries MF. It is down now. what should i do
Sailesh answers, hi, you should exit this fund without having any second thought. Why do you want to remain invested in fund that has not performed at all. Instead put your money into better perfroming funds like HDFC Top 200 and DSP BR Equity Fund.
rams asked, I have started SIP in four MFs(DSPBR Equity, HDFC Top 200, IDFC Premier Eq Plan A, Sundaram Select Midcap Reg) for My kid which I want to continue for next 15-20 years easily. Pleae review and share your opinion
Sailesh answers, hi, overall a good portfolio. Continue with your SIPS.
pnr asked, I have 2 SIP, HDFC top 200 & BSL Equity Fund @ 3000 each for last 18 months but till date total gain is negetive. shoyld I continue or quit?
Sailesh answers, hi, these are among the better performing funds. There is no cause for worry. Please remain invested. The stock market overall has remain subdued due to one reason or other. Please have patience... you will be suitable rewarded once the markets turn bullish. That is why I insist on a long term view as the markets can remain bearish for a year or two and may test your patience.
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 this chat, please mail them to me at sailesh.multani@gmail.com.