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Rediff.com  » Business » Want to be rich? Here's help!

Want to be rich? Here's help!

July 21, 2011 17:03 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 rediff.com, financial planning expert Sailesh Multani offered some valuable investment tips.

Here is the 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.


arvind asked, Dear Sir, Good Evenning Please suggest investement for Child Education,
Sailesh answers,  at 2011-07-21 16:00:11Hi, I have observed that most investors plan their children's future by taking child plans sold by insurance companies. Buying an insurance plan is not the right way to plan for your chidren's future. Instead you should build a portfolio consisting mainly of diversified equity funds through the SIP route. A small portion say 10% should be invested into Gold ETFS as well. Start early, invest regularly. I am sure every parent will be able to build the necessary corpus required to fund his/ her child's education and marriage.
Santy asked, what is the best option to not to loose your money
Sailesh answers, Hi, if safety of capital is your prime concern then you should invest your money into bank FDs. You money will not only be safe but you will be assured of a regular return on your deposits. Even in the case of banks, it would be prudent not to put all your money into one bank FD. Spread your money over 3-4 banks. Yes, the returns from bank FD would be less compared to returns from equity funds but then you have to forego extra returns for safety.
afaf asked, I have invested in DSP blackrock small and midcap fund, fidelity Equity,HDFC top200,Franklin bluechip and reliance regular savings fund. How is my portfolio?
Sailesh answers, Hi, I like all the funds in your portfolio. You may continue with your investments
surendra asked, is investment in LIC is a wise decision in today`s scenario ??
Sailesh answers, Hi, buy an insurance plan only if you want to insure your life. If you want to grow your money then invest in diversified equity funds through the SIP route. Even in the case of insurance stick only to TERM Plans. Stay away from other forms of insurance especially ULIPs.
prasad asked, what about gold rates is it right time to enter buying physical gold what is its target in 2 years time i am interested to know
Sailesh answers, Hi, in my view every investor, irrespective of age and risk-profile, should have atleast 10% allocation to gold. Gold is a precious metal and will always remain in short supply. It is the most sought after asset class in times of financial distress like the one we witnessed in the year 2008. Moreover, it is a store of value. The value of gold in terms of goods and services it can buy has remained constant over the centuries. Therefore, investment in gold also serves as a hedge against inflation. Gold as an asset class is less volatile compared to other asset classes like equity, debt and real estate. It can be used to diversify one's portfolio to bring in more stability in returns. For investors who are planning to invest in gold, it makes sense to invest in gold today. However, don't buy all the gold you want to add to your portfolio in one shot. Rather spread your investment over a six months time frame. I would advise investors to invest in Gold Exchange Traded Funds (ETFs) as against physical gold. ETFs are easier to buy and sell. Please keep in mind that you will need to open a demat account compulsorily if you want to invest in Gold ETFs.
jaishanker asked, pls advise what will be dtc code affect on mip and balanced funds
Sailesh answers, Hi, there is still some confusion with respect to the final provisions of DTC. It would be wise to wait and watch till the DTC is finally implemented. As far as MIPs and Balanced funds go, invest in them based on their merits and suitability to your investment objectives.
RAGHAV asked, How is the future for DSP BLACKROCK TOP 100 EQUITY FUND - GROWTH for SIP for 5 year duration?
Sailesh answers, Hi, DSP BR Top 100 Equity fund is a large cap fund. The fund is managed conservatively and should do well once the markets stabilise. Investors invested into this fund should continue to hold the same.
red asked, since the markets are down which sectors to invest and when approx will the market hit back?
Sailesh answers, hi, it is very difficult for investors to pick the right sector for investment at the right time. It is best to leave the decsion to professional fund managers who are best equipped to carry this difficult task. for investors it would be better to invest in well managed and dviersified equity funds.
ganesan asked, What is the best instrument available today for investment(which funds/gold) where I want to get return in the next 15 yrs...balanced risk...
Sailesh answers, hi, if your investment objective is to grow your money then you should certainly have more of equity funds in your portfolio. It would be prudent to have Gold ETF and Bank FDs as well in the portfolio.
kumar asked, how is the market now wherethere is it the wright to invest in the market.
Sailesh answers, hi, it is true that equity markets have not gone anywhere since the start of this calendar year. Investors in FD have fared well compared to equity fund investors. But such is the nature of equity markets. It can test investors' patience to the core. Therfore, it is advisable to invest in equity from a long term point of view. Equity funds are preferred over equity shares. SIP is the preferred mode of investment compared to investing a lumpsum
ashok asked, Dear Sir kind advance a short term plan to invest 3 lac rupees. There shouldn't be any lock in period.
Sailesh answers, hi, if your investment horizon is less than a year then bank FD is ideal for you. If you mutual fund savvy then you should look at ultra short debt funds. For investment horizon exceeding one year, short term debt funds are ideal. You can invest in MIP if your investment horizon is 18-24 months.
sanjaypatle asked, AGE 30; WANT 2 CRORE CAPITAL AT 50 YRS. HOW MUCH SHOULD INVET MONTHY/YEARLY? AND WHICH TOOL: STOCK MKT, MUTUAL FUND, PROPERTY,OR PL SUGGEST.
Sailesh answers, hi, you will have to invest a sum of Rs 26,000 approximately on a monthly basis into a portfolio consisting of equity funds, debt funds and Gold funds. Your portfolio should generate an annual return of 10% p.a. to take your to your goal of Rs 2 crores in 20 years.
alwaysRich asked, I am due for retirement and my retiral benefits will about 50lacs. How and where should i invest this sum?
Sailesh answers, hi, first of all acertain your possible post retirment expenses per month. Out of your available corpus keep aside the amount that can generate the desired regular income. The balance retirement fund can be invested into balanced funds and equity funds.
mukesh asked, Shailesh i invested in icici ulip 4 yrs bak , 10,000/- every year Now its value is 33000/- . i knw u dont support ulip but as per your advice shud i keep investing , stop the payment n let it grow. i wont redeem at this stage
Sailesh answers, hi, you are right I am not in favour of ULIPs. these are not the ideal investment or insurance product. Having invested in a ULIP for 4 years there is no sense in exiting the same at a loss. ULIPs take 7-8 years to break even because of the very high initial charges deducted from your premium in the first three years. Going forward please dont buy any ULIP to plan your future.
VIINOD asked, I have invested during Jan2009 in MF DSP Blackrock eqty,SBI Magnum contraBirla Mid Cap-D Birla Sun Life Frontline Equity-D DSPML Equity Fund-D DSPML T.I.G.E.R. Reg-D Fidelity India Spl situation HDFC Growth-D HDFC Growth-D HDFC Top 200-D ICICI Pru Infrastructure-D Kotak 30-D LIC Tax Plan D Magnum Contra-D Magnum Contra-D Magnum Global-D Magnum Multiplier Plus-D Reliance EQTY Fund D Reliance Vision-D Sundaram BNP Paribas CAPEX Opp.-D Sundaram BNP Paribas Select Focus-D Tata Eqty Opp Fund Tata Equity PE-D Tata Pure Equity-D Templeton India Equity Income-D Total amount invested is 8 lakhs,but still I am in Negative growth in many of the above MF and the growth in which hardly three scripts are showing very marginal. Should I churn my portfolio and how ?kndly advise.
Sailesh answers, hi, pls mail your portfolio in an excel sheet to enable me to give a view on the same. My email id is : sailesh.multani@gmail.com
umesh asked, is hdfc equity fund good to invest thru sip? if possible can you tells us approx. value of 3000 pm for 6 yrs would be ?
Sailesh answers, hi, this is by far the best equity fund in the country. This fund should be held by every investor in his portfolio. Asssuming the fund generated an average annual return of 12%, you should be able to accumulate a sum of Rs 3.15 lakhs in 6 years.
rajj asked, Shailesh i invested 20,000 in hdfc top 200 last year, now its value is 19,500/- . how long to hold for gud returns?
Sailesh answers, hi, hold this fund till your investmnt goal materialises. Atleast your investment horizon should be 5 years to get a good return from this fund.
sandeepp asked, I have a ICICI ULIP invested 60,000 and after 3.5 yrs its 70,000. Should i continue or redeem it and invest systamatically in MF and or Gold ETF and shares via SIP.
Sailesh answers, hi, if you are making money on your ULIP please go and surrender it. Instead take a term plan and start SIP in diversified equity funds.
gauravs asked, Hi Shailesh... I do not want to take heavy risks in my investments. I have been doing some short term equity buy and sells. Hence on the same lines I want to invest in some money in not-so-high-risk entity. Are Mutual funds a good option? If yes, can u name a ew where I can put some money in? Also, are Recurring Deposits another good option?
Sailesh answers, hi, when it comes to equities, I recommend an investmnt horizon of atleast 5 years. Short term buying and selling is not advisable at all. Recurring Deposit is good to build a safe corpus over a period of time.
Narayanan P asked, Hi i have a flat that i bought for 6 lacs and i pay emi of 4500 per month. Am earning rental income of 6000 per month. Now the property is worth 15 lacs. Is it wise to sell the property now and invest in any other options or hold it? Does the value of flat dicreases over years.
Sailesh answers, hi, congratulations on creating wealth out of your investments in property. I would advise you to sell the property and pay of the outstanding loan. Whatever is left after that can be invested into low risk investment instruments like MIPS and balanced funds. The EMIs should be converted into SIPs.
akkhi asked, At go, wd you recommend investing in MFs or bank FDs? If MFs, what type of funds?
Sailesh answers, hi, if you mutual fund savvy then you should consider investing in short term debt funds. Currently these funds are generating post tax return in the range of 8.50%-9.00%. However, please bear in mind that returns from debt funds are not assured unlike bank FD. In the case of Bank FD not only are the returns assured but capital is also safe. The same is not the case with debt funds.
Vaibhav asked, Dear sir, Very shortly i would be (through sale of property) receiving a sum in the tune of 2.5Cr+. What investments would you suggest so that i can have a monthly return as well gain on capital a couple of years down the line. I am 30 years of age. Never invested anything. Please suggest.
Sailesh answers, hi, you need to get a financial plan for yourself before your could plan the investment of RS 2.50 crores. The plan will guide your precisely as to how should you invest your money to ensure that all your goals are met on time without taking undue risk.
HITMAN asked, salies bhai , i have very hard earned 10 lakh rupees , i want to invest it for 5 years with min return of 15 to 20 % , where shd i invest ?
Sailesh answers, hi, you should scale down your return expectation to 12% to avoid any disappointment in the future. Equity funds are best equipped to generate an average annual return of 12-15% over the next 5 years.
Jupitor asked, i'm 38 having surplus of 5L, what would be best option of investment for period of 10 yrs
Sailesh answers, hi, for 10 years ideally you should invest 70% in equity funds, 20% in gold ETf and balance 10% in Bank Fd. I am assuming that you are willing to take the higher degree of risk that is associated with investment in equity funds.
Anshu asked,  SBI MAGNUM TAX GAIN GROWTH IS GOOD FUND TO INVEST?
Sailesh answers, hi, I would prefer the category best - Fidelity Tax Advantage Fund.
Shiv asked, Hi ,For child plan which the best plan
Sailesh answers, hi, I have answered a similar question at the start of this chat.
manjunath asked, hello Sir,I am 32 now, planning to Start my Investment in Shares. Please suggest me some good comapines.
Sailesh answers, hi, if you do not have necessary information to track the company's performance as well as the skill set to analyse company's financial and business performance then you would be better off investing into diversified equity funds. Leave the job of stock picking and research to professional fund managers.
mk asked, sir,i am 35 ,have my own house worth 1.5cr for self consumption and one(35 lakhs) for investment,i have one son he is 5 yrs and m putting 70k per year in ppf for his study and need 2 cr for retirement after 25 yrs please suggest how much to save for retirement,thanks
Sailesh answers, hi, please get a financial plan made for yourself. It will tell you how should you invest your monthly savings into various investment instruments so that you are able to meet your goals on time.
Krishnakumar asked, I am 41 years and I can invest 1.5L per year on investments like stocks/MF/ETF and I can take 70% risk. Need this investment for my kids education 10 to 15 years horizon.
Sailesh answers, hi, if you are willing to take risk with 70% of your surplus funds, then it would be wise to invest 70% of your money into diversified equity funds.20% can be invested into Gold ETFs. The rest can be channelised into recurring deposits.
Imhere asked, What about -Reliance Growth for SIP ..it gave 30% growth in last 10 year
Sailesh answers, hi, this is a midcap fund and the returns in the past have been phenomenal. However, the fund for the past few years has faltered to generate reasonably good returns. Investors would be beter of investing in better managed funds discussed at the start of this chat.
Bsvr asked, whether we can invest in silver or gold, pls advice
Sailesh answers, hi, betwen Gold and silver, I like Gold. Gold will continue to be in demand till the developed economies dont come out of their financial mess. Silver on the other hand has more industrial use and the demand is more speculative than genuine.
pankaj kulkarni asked, i need to generate 4-5 lakhs over the next 2-3 years for downpayment of a flat. is equity the right thing for me?
Sailesh answers, hi, equity is certainly NOT the right investment option to accumulate the sum you will need for down payment. Your investment horizon does not permit equity investment at all. I would advise you to put your money in bank FD and MIPs.
vicky asked, waT ABOUT INVESTING IN GOLD ETFS? WHY THERE IS PRICE DIFFERENCE IN VARIOUS GOLD ETFS WHETHER THE PRICE OF GOLD IS SAME? SINCE THERE ARE SO MANY GOLD ETF FUNDS AVAILABLE ,ON WHAT BASIS WE NEED TO SELECT THE GOLD ETF FUNDS?
Sailesh answers, hi, the price differential is on account of the expense ratio and tracking error.
Anshu asked, How is ICICI Pru Life Stage Wealth II plan of ulip?
Sailesh answers, hi, I dont recommend ULIPs in any form and shape. Thefore, my answer to your questioon will be to ignore the ULIP. If you want to insure your life then take a term plan. If you want to grow your money, invest in diversified equity funds.
vikaskumm asked, I invest in Gold ETF 1 etf everymonth. Suppose after 20 yrs i have 240 units of etf and average price of it is say around Rs. 6000 after 20 yrs. Would it be easy to sell these etf.
Sailesh answers, hi, it should be easy to sell gold ETFs. I dont see any problem in that. Currently the volumes are low because Gold ETfs are not popular. Twenty years down the line Gold ETFS will have the same volume like any equity share
Giri asked,  Hi, Can you please advise how can I go about STP? I have about 5lac to invest but I do not want to invest in lumpsum..
Sailesh answers, hi, you should select 3-4 well managed equity funds. then select a liquid fund from thesame fund houses. Invest the amount in these liquid funds and then every month systematically keep transferring the funds from liquid funds to the respective equity fund.
RAJ KUMAR asked, i have 4 term insurance policy from icici,kotak,lic,tata,totalling to 1 crore,is it ok,or i should just go for a one policy,pls reply
Sailesh answers, hi, it is ok to have 4 term plan from 4 different companies. If you want to increase the sum assured then increase the cover in one of the 4 plans you already hold.
asin asked, I brought a house in 50 lakhs for which EMI is 30k/month and rental income is 18k/month.. its current market value is 60 lak.. I can expect it to be 70 lacs down the line 2 years.. shud I keep it or sale it and do investment elsewhere
Sailesh answers, hi, if you have completed 3 years then it is wise to sell the property and book the profits. I am personally of the opinio that real estate bubble will burst anytime. From that perspective it makes sense to sell of the property. If you havent completed 3 years then you should wait or elase you will have to pay short term capital gains tax.
rajatks asked, Want to take a Term plan, Suggest between ICICI, HDFC and LIC for 50 lacs. what if want to take 2 for 50 alcs each should i do it in two companies or stick to one for 1 crore and if 2 companies then which ones.
Sailesh answers, hi, I dont research Term plans. Therefore, I will not be in a position to give my view on the term plans from the companies mentioned by you. Personally I dont have any preference for any single insurance company. It is better to take two policies of Rs 50 each from different companies.
zv asked, sir tell me best balanced fund for monthly sip 5000 goal 7500000
Sailesh answers, hi, HDFC Prudence fund.
hemp asked, Hi Sailesh, I have invested in HDFC - young star super fund considering my child's future. is this safe?
Sailesh answers, hi, this is safe but certainly not the best way of planning your chiild's future.
Giri asked, Hi, Can you please advise on DSP ML micro cap fund?
Sailesh answers, hi, you should invest in this fund but your exposure to these kind of funds should not be more than 5% of your total portfolio.
Jitendra asked, Hello Sir, I have been investing in 5 Mutual funds through SIP, every month from 2007, but I do not see a good return out of these please suggest
Sailesh answers, hi, first of all you need to review your MF portfolio with the help of an expert. IF the funds are fundamentally sount then there is no need to worry. Equity markets have also underperformed after the massive correction of 2008. It will be sometime before the markets get back their past glory.
AshuPune asked, What about long term SIP (10 year or more) in Reliance Banking Growth and Reliance Pharma Fund Growth? Should I start SIP?
Sailesh answers, hi, I am not in favour of sectoral funds. These funds invest only in one sector and therefore their performance is linked to the performance of that particular sector. Investors would be better off investing into diversified equity funds which have the flexibility to invest in every sector that hold promise for the future.
Retiredhurt asked, Hi, I am earning about 70K per month and I have a house loan of about 16 Lac for which I have to pay about 15K every month. The loan tenure is about 20 years (only a year back I took it) ... my personal and family expenses are about 10K a month. Can you please help me know how should I invest my money and where, so that I can get maximum benefit out of it. (I have LIC policies of about 70K, ICICI Pru Pension Plan also) Thank you very much in advance!
Sailesh answers, hi, mail your query separately to me.
Rock asked, I have invest 70k in derivatives but now it is 55K shall I wait or sell equities and invest in FD
Sailesh answers, hi, in my humble opinion derivatives are considered to be the most risky investment instruments. Please stay way from the same. It pays to be a patient investor rather than tracking the market on a minute to minute basis.
Sailesh says, I think 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.