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Low risk taker? Stay out of stock markets

Last updated on: August 31, 2007 16:08 IST

Are you the one who doesn't understand mutual funds? Do numerous MF options baffle you? What are the best funds available? Which funds accrue maximum profits? In an hour-long chat on on Thursday, Rahul Goel, CEO,, and financial planning expert, answered many such queries. Here is the transcript:

Rahul Goel says, good afternoon!

bvs asked, sir, my age:33 I would like to invest monthly 5000 for next 25 years.Could you suggest me good investments
Rahul Goel answers,  at 2007-08-30 13:57:38hi, given that you are investing for a very long time frame and are going to be doing so every month, one option for you could be to opt for SIPs into very well managed equity funds. over 25 yrs, it is reasonable to expect equities to deliver the best return; however, you need to be aware that there are always near term risks when you invest in equities. a predominanly equity fund portfolio would suit you best, if you have the risk appetite to take in near term losses.
anantha asked, Could you give me best 5 funds to invest in SIP mode?
Rahul Goel answers, anantha, hi. the funds i recommend will depend a lot on your profile and expectations. most people invest in the best funds while they should be investing in funds which are best for them. having said that it is likely your portfolio will include funds like hdfc equity and fr india flexicap.
Mahesh asked, need a exact plan to invest more than 150000 on yearly basis. I have a wife and are expecting our first kid in October.
Rahul Goel answers, mahesh, hi. and many congratulations! the fact that you wish to make a plan in itself is a very good start. however, you will need to have clear objectives for me to be able to guide you in terms of a plan. one objective ofcourse could be to accumulate monies to fund your to-be-born child's education. yes, do not buy a ulip for yuour child in haste.
ssk asked, I have invested 1000 rs. in SIP hdfc taxsaver(D), also I want to invest another 1000 rs. can i invest in same or any other plan.waht are the best taxsaver mf
Rahul Goel answers, while there are many tax plans out there we tend to recommend hdfc tax / hdfc long term adv and fr india taxshield to our clients at personalfn.
Amit asked, Sir, Gud afternoon, I am 32 year old married, a 5 yr old daughter, monthly income of Rs.70 k in hand, having 30 lacs insurance policies including ULIP, unvesting Rs.1000 each p.m. in 5 different SIP, wants to save for retirement and daughter marriage, please suggest me sum good investments, Thanx.
Rahul Goel answers, amit, hi. well, one thing is certain. you have enough insurance policies but you are not adequately insured. you must have adequate insurance to take care of your family in your absence. and the best way to do that is to take term insurance (to know how much insurance, maybe you can use our human life value calc on now coming to the sips. the fact that you are doing sips is good; but in whcih schemes?! this is very critical. doing a sip into a poorly managed scheme will not not get you anywhere. overall, given the investment horizon, focus your investments in mutual funds and maybe some amoount in government saving schemes like PPF or post office.
Avish asked, Sir, I am 26 and have SIPs of 30k in the following funds, Fidelity Equity, HDFC Equity, DSPML Opp, Reliance Growth & Vision, Magnum Contra & Global, Franklin Flexicap & Sundaram SElect Midcap. Since I am fully invested in PPF and Insurance premiums, no ELSS. What do u say abt selection of funds or am i over diversified in terms of funds?
Rahul Goel answers, avish, hi. you definitely have some very well managed funds in your portfolio. i hpe you have the allocation right as well.
raju asked, What do you think of Sundaram Select Mid Cap in coming 1-2 years??
Rahul Goel answers, raju, hi. sundaram select is a very well managed scheme. since it invests in mid caps, we recommend that you have a 5 yr horizon for the same. also, since the scheme tends to hold cash from time to time, you will find that in rising markets it underperforms; but over a stock marekt cycle it will deliver the desired return. own it, but in a small proportion.
rajiv rai asked, Sir, I am 25and have SIPs of 20k in the following funds, Fidelity Equity, Magnum Contra & Global, Franklin Flexicap & Sundaram SElect Midcap.
Rahul Goel answers, rajiv, hi. you too have some very well managed schemes in your portfolio! consider adding a fund like hdfc equity or hdfc top 200. also, ensure you have the right allocation for each fund.
sanjeev asked, sir i want to invest Rs.10000/- pm in mf through SIP. kindly suggest the funds for it.
Rahul Goel answers, sanjeev, hi. well the funds we recommend will depend on a lot of factors. however, funds like hdfc equity and fr india flexicap will in all likelihood find a place. in any case, i recommend you get yourself an honest financial planner. that will be take care of all these issues!
Ashok asked, Sir, Good afternoon,I would like to know which Mutual Funds under ELSS schemes are better in terms of returns for the next three years and whether it would be advisable to invest all the money under a single scheme?
Rahul Goel answers, ashok, hi. if you have appetite for risk, then you should inevst some money in ELSS from the overall monies that you need to invest under section 80c. also, do not have only one scheme; consider having atleast two.
venkky asked, sir, i am 35. Till now i do not any investment. I have taken 50 lakh bank homeloan. Now i have cash of about 25 lakhs. Is it good to repay the loan or is it good to invest this amount in any other investment product and continue to pay my home loan.
Rahul Goel answers, venkky, hi. well, this is a question which you should answer yourself. in most cases however, its better to prepay... most of us do not like liabilities especially when we have funds to repay them.
Dayasagar asked, Sir, Good afternoon. Kindly inform me a few SIP's which are growth-oriented and will give good customer service. I want to invest Rs.50,000/-. How to invest? I can even invest every year. Pls help me. With best regards/Daya Sagar
Rahul Goel answers, dayasagar, hi. like i mentioned earlier funds like hdfc eq and fr flexi are growth oriented equity funds. the best way to invest in these funds and more, is via sips; in case you have a lump sum, go in for a six month stp. overall have no more than 5/6 schemes in your portfolio.
Msr asked, Sir,Please suggest which are best children's mutual funds?
Rahul Goel answers, hi. there are a few children's funds out there. however, i would recommend that you give them a miss and invest in the regular diversified equity funds instead. if you are looking for equity/debt funds, then opt for balanced funds.
Dayasagar asked, Sir, I got one poor family. They want to invest about Rs.8,000 in the name of their two sons. Which fund will fetch them more interest or income. Pls help them. With best regards GDS
Rahul Goel answers, if they cannot take risk, it is best they do not invest in equities. consider fixed deposits instead.
Govind asked, My portfolio includes FII fund - Nifty plan,HDFC Taxsaver,Magnum Taxgain,Fidelity Tax adv,Franklin Prima plus,Reliance Growth and Sundaram Select midcap. I plan to add HDFC Prudence. Please advice whether this is ok?
Rahul Goel answers, govind, hi. prima facie it seems that you are investing because you like the scheme. on the contrary you should be investing if the scheme fits into your portfolio. i think if you are clear on why you are investing, you will know whether a scheme is suitable or not. having said that, this hdfc prudence is a very well managed scheme.
pawan asked, Sir, i am 37 years salried person with SIP of Rs. 1000 in Birla top 100, pru icici Dyanamic, Franklin Flexicap, Magnum Tax Gain, Pru ICICI Infrastructure, Magnum Contra. Also lumsum of Rs. 5000 invested in Tata Infrastructure, Pruicici Fusion I & II, Kotak emerging equity. I wan to invest for 7 years horizon. I want the investment to grow for my son investment and purchase of house. Pl. Analyse my protfolio.
Rahul Goel answers, pawan, hi. incidentally most of the schemes that you are invested in are the ones we do not recommend to our clients. we prefer diversified funds, which are managed by teams of fund managers. i think it will be a smart decision if you were to sit down with your agent and ask him why he has recommended the funds that he has.
soma asked, Hi Rahul, I am investing in 3 Mutual Funds (Reliance Growth Fund, SBI Mangum Global Fund & Sundaram Paribas Select Midcap Fund) through SIP for the last 5 months. I invest Rs.1000 in each of these funds every month. I have opted for Dividend Re-invest option in all these. As MFs offer 3 options (Dividend Payout, Dividend Reinvest & Growth), I want to know which option is the best? I am 35 years old & I plan to stay invested atleast for 10 years. So which is the best option? Is it possible to switch between these options whenever I need? If yes, how is it handled and what are the charges?
Rahul Goel answers, soma, hi. if you are going to be invested for that long, and you do not have any cash flow needs, then best to be in the growth option. of course you can switch; but every time you do that it will tantamount to a sale and purchase; there may be tax implications.
venkky asked, sir good afternoon. i am 35 mariied, have 1 5yr old boy. Till now no investment. Now i have cash of about 25 lakhs to invest. I am low risk taker. so please advice on what all products i should invest.
Rahul Goel answers, venkky, if you have a low risk appetite then avoid stocks for sure. opt for instruments like post office deposits. you can also consider FMPs and maybe the mips which have a very small equity component.
manoj asked, Sir,i am 33 and i have ( Mutual Fund invest in Reliance equity fund 12k, Fidelity India Special Situation fund 10k, HSBC Unique Opp.Fund 20k& Franklin Templ.Capital Sefty fund 20k, DSP-ML World Gold Fund 20k)PPF 52k, FD 50k & Insurance 125K ,I wan to invest for 10 years horizon. I want the investment. Pl. Analyse my protfolio
Rahul Goel answers, manoj, hi. it seems that you have a liking for investing in nfos. well, if you are contemplating on building long term wealth, you need to change this approach. most nfos are just marketing gimmicks. at personalfn, we tell our clients not to invest in probably 99% of nfos.
sam asked, hello sir, are SIPs the way to go for a person who has a lot of idle money, but does not want to spend time following the markets? if so, which are the (5) best managed SIPs today? thanks
Rahul Goel answers, sam, hi. sips are not an investment avenue; they are a means of investing in one. so select your mutual fund schemes carefully and then invest via sips into them.
kato asked, Hi - I am 47 and earn around 3lacs per month. i have LIC premiums totalling 3lacs / year and SIP of 25,000 per month for the next 10 years. the SIP were started 14 months ago. do u think these SIPS are ok - or should i increase the SIP. i also have housing loan EMI of 41K per month
Rahul Goel answers, kato, hi. i am unable to answer tis as i am not aware of your overall cash flows and asset allocation. but yes, you should save as much as you can. however where you channelise your money is equally important. more money into a not-so-well-managed scheme will not get you far.
qwer asked, hi, can you let me know some good financial planner, who can plan for me in New Delhi
Rahul Goel answers, very modestly, you can meet a personalfn consutant. simply write into us at
indermohan asked, My take home salary is 17000/- - how much % of take home salary should be save
Rahul Goel answers, well, as much as you can!
talwar asked, Rahul, mine was the last question you answered last time. And you asked for more details. I earn 25k per month, put 9k every month in three ELSS funds (Kotak, Fidelity, Birla). I put 5k every month into shares. And the rest I spend or keep in bank. Am i doing OK?
Rahul Goel answers, talwar, hi. yes i remember (how's the speed today!)! any reason why you are putting in so much money into elss. also, you do not own any hdfc or franklin funds. i think fuds like hdfc equity and fr flexi should form the core of any high risk long term portfolio.
Sanjush asked, Sir, What are the option to invest in Mutual fund for an NRI. Is there a limit for investment that an NRI can make?
Rahul Goel answers, sanjush, hi. nris can pretty much invest in mutual funds like us residents. however, some amcs, like templeton and fidelity, will not accept monies from you if you are based in the US.
Amith_bangalore asked, i draw 30000 pm salary, and i want to have a corps of 1000000 at the end of 5 years. Please suggest me investment options.
Rahul Goel answers, if you wish to accumnulate rs 10 lakhs in five years, adjusted for inflation, then you will need to set aside about rs 15,000 per month for the next five years in instruments which yield you 15% (that's the assumption). if you wish to play around with the assumptions you can use our calc on
rajeshkumar_221 asked, I met a personalfn consultant, it was very helpful. I was also provided with some booklet. Thanks
Rahul Goel answers, always delightful to come across a personalfn client! thank you rajesh for the feedback.
rajeshkumar_221 asked, I met a personalfn consultant, it was very helpful. I was also provided with some booklet. Thanks
Rahul Goel answers, by the way, the booklet was the money simplified, which is probably india's most popuar online financnial planning guide. for all the others - you can get a free copy on
danish asked, I am looking for best Education policy for my new baby born(Twin Baby)
Rahul Goel answers, many congratulations danish. before you take a policy understand the expenses well. my view is that you will probably be better off with inevsting in pure investments like mutual funds than by investing through a ulip route.
veronica asked, A year ago, I made a bad decision of investing in 10 mutual funds. But now I want to reduce the number of funds and start Sip. My investment period will be at least 10 yrs if not more. So, could you please review my portfolio and advice what to hold, buy, sell or switch for the long term. My funds are: dspml equity, dspml tiger, franklin bluechip, hdfc equity, kotak 30, reliance growth, magnum contra, magnum global, sundaram midcap and tata pure equity. Thank you.
Rahul Goel answers, hi. you definitely have some well managed schemes. we do not tend to recommend the contra and global type of funds; we prefer the pure diversified equity funds.
Ashish asked, Assuming one has surplus amount of money, and am willing to invest for 3-5 years. Can you please advise on which all mutial funds should be chosen for this time frame and in what percentage ?
Rahul Goel answers, ashish, hi. like i mentioned earlier funds like hdfc equity and fr flexi should form the core of your portfolio. then you shoudl have a mix of value style funds and growth style funds... a very small portion can be invested in a mid cap fund. this however does require personal interaction. the portfolio has to be customised to your needs and profile.
Mahendran asked, Hello Sir, Good Afternoon, Could please advice me about SIP ? Also I need info about good mutual funds. I am low risk taker. I am earning 500000 per year. Please suggest me to plan for tax savings for this margin. Thanks in Advance..
Rahul Goel answers, hi, if you are a low risk taker than the stock markets are out for you. and when i say stock markets this includes the equity funds. your tax saving portfolio should predominantly consits of ppf and probably nsc. a very small amount can go into elss.
Kumar asked, Hi Sir, I have lump sum amount of 4 Lakhs, I also have home loan of 10.5 Lakhs. Is it better to prepay the HOME Loan or invest in others? Please advise.
Rahul Goel answers, kumar, hi. i think this is somethhing you will need to answer. if you are not comfortable keeping a liability on your books then you should pay it off, ignoring the arbitrage opportunity.
michael asked, Hello Rahul, Last time you advised me to invest in MIP funds as one option for generating monthly income. Now, can you please suggest me the best MIPs and how many to hold in the portfolio. Also what is the minimum rate of return expected and is there any investment limit. Thank you.
Rahul Goel answers, michael, hi. the dsp ml mips are very good; so are the hdfc mips. have a couple to start with. and remember, go in for the qtr dividend option. since these are market linked intruments the returns will definitely be volatile.
Manohar asked, I am planning to invest in the following MF's through SIP. What is your opinion ? 1. Magnum Taxgain, 2. Fidelity Taxsaver, 3. Kotak Taxsaver, 4. HDFC Equity , 5. UTI Infra, 6. Rel. Vision, 7. SBI Contra, 8. Birla Sun Life Equity
Rahul Goel answers, manohar, hi. i think you should reconsider your portfolio. it has too many schemes; then it also has some sector funds which we recommend you not invest in. notice that you do not have any franklin scheme. any reason why?? i think you need to rework most of this.
dentistrytoday asked, Mr. goel , Cud u provide us with ur contact details
Rahul Goel answers, hi. best way to reach us is to write to
indermohan asked, Sir, tell me how can I get more interest than (bank & PPF which is ranging from 8 - 9.5% yearly)and that also with save return
Rahul Goel answers, you can try FMPs which from time to time may offer better tax adjusted returns as companied to bank deposits and PPF. however, pl note that FMPs do carry risk, even though it may be less.
rkbha asked, I would like to invest 50,000 (fifty thousand) rupees for 10 to 15 years. Please suggest me secure and good return plans.
Rahul Goel answers, hi, since you are investing for such a long period, i recommend you take on some risk. and that means giving up the chance to earn secured returns. over such long time frames one should expect equity investments to be best performers. so, take some risk to earn better long term returns. asked, i have a running SIP in franklin India Prima. Should I switch over to Prima Plus or Flexi Cap.
Rahul Goel answers, you wish to switch from a mid cap to what can loosely be classified as a diversified equity fund. that's odd. when you first invested in prima fund, did you have a plan in mind or was it ad hoc?
santosh asked, Hi Rahul, need your inputs on whether to spread the investment into 3-4 mutual funds (across select sectors) or have a much widerspread across funds & sectors? What is derisking at a mutual fund level in your view?
Rahul Goel answers, santosh, best to have about 6 equity schemes from about 3/4 amcs, most of them diversified in nature, and with a mix of investment styles (value/growth).
Aarif asked, Dear Mr. Rahul Gud afternoon..I am working in Dubai and my monthly income is around 80k INR..from which if I exculde all the expenses like Rent, Food, etc still I had in my hand around 30k INR in my hand...I am married and have kid of 6 months now..I am having no investment as such I can speak of apart from the balance which accumulates in bank and I use ti for nothing worth to say...can you give me a general idea.. how to start something in order to not let my money go waste. My age is 29
Rahul Goel answers, aarif, it surely seems that you can invest for the long term... channelise a part of the monthly surplus into equity funds, via sips. if you wish to keep some liquidity, opt for liquid plus funds.
dentistrytoday asked, some new funds also invest abroad. what r their future prospects.
Rahul Goel answers, as of now, personalfn has recommended to its clients that they avoid investing in any of the global funds that have been launched so far. we are still waiting for something that we think will fit in well in the portfolios of our clients.
PS asked, Dear Sir, Good Afternoon. I have made following investments for Rs. 5000 each, HDFC Equity Fund 1995 (HEF), SBI Contra Fund 1999, Franklin India Flexi Cap Fund, DSP ML tiger Fund, Reliance Media & Entertainment Fund, Pru ICICI Services Ind Fund, Reliance Growth Fund, Reliance Media & Entertainment Fund. Rs.500 SIP each of SBI Magnum Tax Gain, HDFC Tax Saver Fund, Sundaram Tax Saver, Kotak Tax Saver Rs. 1000 SIP of Birla Sun Life Equity Fund Is my profile good? What changes can I make? I would like to invent additional Rs. 3000/- per month in SIP. Can you please suggest good SIP. I would also like to invest about Rs. 20000 in some good fund, please advice. Thank you, for your kind guidance and keep up the good work.
Rahul Goel answers, hi. prima facie there are too many sector funds in your portfolio. we recommend to our clients that they avoid investing in such funds. we prefer the diversified funds instead. you should consider the same.
Gul asked, Hi Rahul, You just suggested SIP for 25 years term. Even I had the same plan, but my advisor asked me not to go ahead with SIP for such a long time as the gains might get taxed and that will be huge also, and he asked me to sign me up for a ULIP from Aviva Life Insurance. Please suggest what do I do?
Rahul Goel answers, gul, hi. i am not sure whether the indian law permits this, but you should file an FIR against your agent for misleading you!!!
adi asked, Hello Sir, My question; Is investing in a Second home loan a better option than mutual Funds. Thanks Adi
Rahul Goel answers, adi, hi. our view, and this is true for most of our clients, is that one shoudl have only that much property as is necessary for residence, work and for purpose of giving as inheritance.
anoop asked, Hello rahul, I am 26 and a Bank Manager earning around 56 k per month..i have divided my portfolio in 60:40..60 in equity and 40 in mutual it a good strategy or should i change
Rahul Goel answers, anoop, hi. if this is the ratio, then you should be spending a lot of time in managing your equity investments. if you do not have time, then you should be more into funds.
arun asked, in long term , which is better ULIP or MF
Rahul Goel answers, arun, hi. in most instances a combination of term insurance + mutual funds will score better. over time frames in excess of 15 yrs, the gap will begin to narrow.
raghu asked, Hi Rahul I have 11 Lakhs of investment in ICICI Infrastructure, DSPML Tiger, DSPML oppurty, DSPML Technology, ICICI Services Industry. All in equity and I am looking for long term investment. Do you think the risk is too high?? Please answer .....Raghu
Rahul Goel answers, raghu, hi. definitely the risk is very high. sector funds carry very high risk; in our view they are best avoided. in any case if the sector is so attractive the fund manager of a diversified equity fund will own it in any case.
A1234 asked, your opinion on HSBC dynamic fund
Rahul Goel answers, hi. we have recommended to our clients that they avoid inevsting in the fund.
Raja asked, I met a personalfn consultant, it was very helpful. I was also provided with some financial planning. GREAT JOB. I want the experts opinion please -- I am 29 year old and married with a 3 month girl child. I have the potential of saving around 10,000 pm for long term goal of my child's education. I presenlty invest in HDFC tac gainer -- 2500 pm SIP. Can you please suggest some good SIP's for high returns and medium risk. Please answer this question.
Rahul Goel answers, raja, hi. again really delighted to meet a personalfn client. well, whatever i tell you over here will in any case be told to your by the personalfn consultant. and that you can certain of!
Rahul Goel says, Thank you all for participating in the discussion. see you all next week!

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