Are you the one who doesn't understand much of finance? Do numerous MFs as well as other investment options baffle you? What are the best funds available? Which funds accrue maximum profits? In an hour-long chat on rediff.com on Thursday, Rahul Goel, CEO, Personalfn.com, and financial planning expert, answered many such queries.
Here is the transcript:
Rahul Goel says, Good afternoon! Let's get started!
jmsr asked, At present I am investing in ELSS funds. I started SIP for Kotak Tax Saver and HDFC Long Term MF's. I am planning to purchase stocks. Please suggest me if I should stick to Mutual funds or go ahead with stock trading.
Rahul Goel answers, at 2007-09-20 12:57:15hi. when you are investing in ELSS you probably are benefiting from Sec 80C. investments in stocks will not attract this benefit (there may be some exceptions though). other than that, in our view, investing in stocks is a very time consuming activity and requires a lot of skill. if you have both, then invest in stocks. if not, then best to opt for mutual funds. here too, though you need to be selective.
jmsr asked, Which among following is best for insurance - ULIP's or Term Plan? please do suggest
Rahul Goel answers, this is one question which is asked the most on this chat! well, i think in most instances a combination of term plan + mutual funds would score over a ulip. having said that, term insurance is a must for all individuals.
Virendra asked, What can one expect future of Mutual Funds for next 2 years.
Rahul Goel answers, virendra, hi. if you have invested in well managed equity funds, it is difficult to say what will happen... over 3-5 yrs though, the returns should be reasonable at about 15% pa. if you invest in poorly managed funds, i am not sure whether you will do well at all! there are many mutual funds out there... select that suits you best.
r.rakie asked, Is SIP better option than investing the same amount in ne House ( real Estate) in longer term. Say SIP of Monthly 25000
Rahul Goel answers, hi. in our view, having real estate is important. but we belive one must have only so much real estate so as to suffice needs for housing, business and inheritance. we are not big fans of real estate from an investment perspective for most people as transaction costs are high and one cannot diversify enough. yes, when real estate funds are available this will be taken care of. so, your decision to do an SIP or invest in real estate should depend on what you own already and what you ultimately need for the purposes given above.
Dileep asked, Hai Rahul. This is a good oppurtunity for the people like me who dont have enough time to do some research and find info about savings. Coming to Savings, I want to invest some money on Mutual Funds. Also, these days real estate or purchasing a land/plot is a really a good investment as you know. So, where does Mutual Funds stand in the line of Savings? Also which Mutual Funds are the best having an excellent past performance? I eant to invest in Mutual Funds if they are really promising. Please let me know about few good ones on both long term and short term basis. regards, Dileep
Rahul Goel answers, dileep, hi. i suggest you opt for mutual funds since you do not have enough time. but then again you need to identify the right schemes for you. some better managed schemes are hdfc equity and fr flexicap in the equity category; but then one needs to customise the portfolio to your profile and needs. i suggest you employ the services of an honest financial planner. in the transcript of my earlier chats you will find notes on how to select a financial planner. your point on real estate has been answered in my previous reply.
jmsr asked, Seeing current Bull run, is it recommended to buy MF's at high NAV's!
Rahul Goel answers, if you are investing for for a tenure that is say 5 yrs out, a 5% change in the sensex should not ideally change your investment plan. also, pl ignore the high / low navs. they have little meaning. focus on the long term investment opportunity and decide how much risk you are willing to take to benefit from the same.
maverick asked, Sir, I want to invest 60,000 yearly in ELSS. Please suggest the best fund.
Rahul Goel answers, i think two schemes which are good are fr india taxshield and hdfc long term adv. best is to invest in two schemes to start with.
Nishant asked, Hello Sir, I am a 24 year old, single professional with no dependents. I have a take home of 50k/mnth and variable yr end bonus of about 1.5 lakhs. I am currently investing in Reliance Growth, Magnum Contra, HDFC Taxsaver, Magnum Taxgain, Principal tax savings and Birla Equity Plan with 1-2k/mnth SIP in each (Total 10k/mnth). Do you think the funds are right? My investment time frame is 10 yrs atleast. I also invest in stocks regularly and prefer the big steady ones like RIL, BHARTI, INFY and TISCO. Any advice on how I should invest from here on would be great. I expect my future income to far outpace inflation and would increase my monthly investments into these schemes going forward.
Rahul Goel answers, nishant, hi. well, if you were a client of personalfn, you would not own any of the schemes you currently own save for one!! i think you need to take a serious relook at your portfolio. i am unable to guide you on stocks though. my advice - get yourself an honest finanical planner.
sk asked, Hi Rahul, I am investing in following funds through SIP, Pls advice which funds shall I continue to invest and which one to stop and sell the units? ABN Amro MIP (G), Reliance MIP (G), HDFC MIP - LTP (G), DSP-ML Balanced Fund (G), FT India Balanced Fund (G), SBI Magnum Balanced Fund (G), HDFC Prudence Fund (G), ICICI Pru Dynamic Plan (G), HDFC Long Term Advantage (G), ,HDFC Tax Saver (G), ICICI Pru Tax Plan (G), Principal Tax Savings, SBI Magnum Tax Gain (D), Sundaram Select Midcap (G), SBI Magnum Contra Fund (G), DSP-ML Technology.Com (G), DSP-MLSmall & Mid Cap Fund (G)
Rahul Goel answers, sk, hi. you have too many schemes in your portfolio to start with! are these part of one portfolio or of multile porfolios for which there are different needs?? you can surely avoid some of the schemes you are invested in. then, you need to get the allocation between these schemes right. and, i am really wondering why you are doing an SIP for a MIP scheme! its time you thought hard about getting professional and honest advice...
michael asked, Hello Rahul. Which is a better portpolio? Having 4 to 5 well diversified funds or a pure large cap, diversified, midcap, opportunity, etc type funds in the portfolio? Please advice.
Rahul Goel answers, michael, hi. you can have about 5/6 schemes in a portfolio, with varying styles of managing money; a tiny portion if at all can be reserved for midcap funds. and the rest of the schemes should be predominantly large cap schemes. avoid sectoral funds.
satish asked, At present I am investing in 3 SIPs - 1. Magnum Global (2000/-) p.m. which is 8 months old. Magnum Midcap (3000/-) pm. 2s month old and DSPML Tiger 1200 pm. (1 mth old) and in addition to this I've invested a 35K sum in Magnum Multiplier and 7K in Magnum Contra. In Addition to my 2 FDs of worth 2L. I am also holding 30 PP shares of ICICI. and all this I plan to continue for next 3 yrs. How do u see my portfolio.
Rahul Goel answers, satish, hi. here's something for you to ponder over. you do not have any equity scheme from what are in our view amongst the best managed amcs in india - hdfc and templeton. wonder why? you need to get your schemes right. i am unable to comment on the allocation of assets and i do not have enough information on you...
kamlesh asked, help me invest safely in mf`s and ulip or according to your view
Rahul Goel answers, kamlesh, hi. if you wish to consider personalfn as your financial planner, simply send an email with your contact details to email@example.com.
nagesh asked, Hi, normally people say that its better to invest in 5-6 funds. does this count also includes ELSS funds
Rahul Goel answers, nagesh, hi. yes, elss could form a part of this portfolio itself. but then this is a question of needs and profiles... for a person with low risk appetite, his portfolio in any case will not have much equity.. it will be mips etc. the elss funds would effectively then be a tax planning portfolio and separate from the other schemes. but if the person has appetite for risk and is investing for the long term, there can be some overlap here.
pawan asked, I am unmarried 29, I can save upto 20K per month. please tell me where I have to invest. I don't have much responsibility.
Rahul Goel answers, pawan, hi. great that you wish to start investing even before you realise the need for it. if you are looking for hassel free options, mutual funds are the way to go. a portion of your salary must already be going into epf, and so debt is covered here. but before you invest any money, ensure you have selected the best schemes. for this you will need professional help.
jay asked, Sir , i want invest rs.40000/- in equity for 6 month.
Rahul Goel answers, jay, hi. in our view, if you wish to invest in equity, you should have a minimum time frame of 3-yrs...
JAGADEESH asked, Can you Please tell me what's the difference between Endowment Policy and Term Policy in Insurance? After the maturity, which gives much benefit to the Policy Holder.
Rahul Goel answers, jagadeesh, hi. do not see the benefit you get on maturity. see the benefit your family will get in case you were not around. if you are able to understand this, you will know that term insurance is the way to go. if you survive the term of the policy, then no issues. you would have paid a very small for the mental satisfaction that your family was well covered at all times. why do you need to have a maturity value??!!
raghvi asked, Hello normally people advocate SIP in mutual funds over lumpsum amount and further they tell invest with a 5 year time frame. Please let me know if market is going to rise and Indian economy looks strong wudnt it be better to invest lumsum at any level and wait for 3-5 years rather then goign for a SIP??
Rahul Goel answers, raghvi, hi. yes, in a market which just moves in one direction, and that is up, a lump sum would work better. but then no one knows how the markets will move. and when there is volatility sips work best. also, sips are helpful for those who have small surpluses every month. in present times, its best to go via the sip route.
JAGADEESH asked, I am 58 years old now. I am retiring without pension at 60 years. From today, i can spare 10,000/- per month. How should I plan from now ?
Rahul Goel answers, since you have only two years to retirement, equities is ruled out. what you need to do now is to start derisking your overall portfolio so that on retirement day, your portfolio generates the cash flow which more or less off sets the lack of a salary. avoid taking unnecedary risk to grow money fast...
VS Goyal asked, You are welcome Rahul. Could you please advise the best mutual fund i can invest my funds.
Rahul Goel answers, hi. if you are looking at equity funds, then funds like hdfc equity and franklin flexi should for the core of your portfolio. plan to have about 5/6 schemes in a portfolio.
sunny asked, i have invested in HDFC Tax Saver and Fidelity Equity Growth through SIP option of Rs 1500 each. I plan to invest for the next 1 yr and then to stay invested for the next 3 yrs. What returns should i expect
Rahul Goel answers, over 3 - 5 yrs, a well managed fund should be able to deliver about 15% pa.
rajeev asked, I am holding SBI bluechip fund since inception should I continue to hold it or switch to some better option?
Rahul Goel answers, rajeev, hi. this is one question which is often asked. well, the performance in our view leaves a lot to be desired. just as an fyi, at the time of the nfo, we had told our clients at personalfn to avoid investing in this scheme.
Suhas asked, Rahul, what are the good Index funds with low expense ratios? Any ideas when ETFs will be made available in India?
Rahul Goel answers, suhas, hi. index funds generally do have lower expense ratios in india... but why do you wish to inevst in them??!! consider well managed actively managed funds instead... we believe they will beat the benchmark over time. ETFs are already available in india...
raghu asked, Should investments be done on a goal oriented basis ?
Rahul Goel answers, raghu, hi. yes, being goal oriented helps. it helps instill discipline at times.
firstname.lastname@example.org asked, i have invested in ICICI Pru Dynamic Fund and HDFC equity fund. Can you please tell me if these funds are good? I am looking at long term horizon of 5-10 years.
Rahul Goel answers, hi. well, to start with having only two funds may not help. have about 5/6 well managed diversified equity funds. we do not recommend icici dynamic fund to our clients for various reasons. need to add that we pay only sufficient attention to past returns. most of our focus is on evaluating schemes on other parameters.
Gaurav asked, Hey Rahul... i hope ur doing good. I am 23 yr old and i m drawing a annual packae of 5 lakhs. I want to plan my tax.Can you plz suggest me. i am interested in short term plans.Last yr i bought some mutual funds of SBI,Franklyn and HDFC.What would you suggest me ? Thanks, -Gaurav
Rahul Goel answers, gaurav, hi. since you wish to plan your tax, then i am assuming you are contemplating how to invest the rs 100,000 under section 80C. some of this limit i would assume will be taken up by your EPF contribution. for the rest maybe you can consider investing in risk assets like tax-plan funds. also, maybe you want to consider a 30-yr term plan... at your age insurance will be very very cheap.
ramu asked, iam drawing 4 laksh p.a wat saving can give me tax benefits
Rahul Goel answers, ramu, hi. there are a whole host of options - insurance, mutual funds, select post office schemes, ppf etc... where you invest should be a function of your other needs as well.
hafiza asked, Dear Sir, I am 32yrs old, with an annual salary of 8 lakhs, i pay 42k towards LIC jeevan anand, 16 PPF, 25k tax saving fixed deposit, 25k SBI tax saving ELSS. Do i need to change any of these? Please guide. Thanks.
Rahul Goel answers, you have a relatively conservative approach it would seem... but then age is not the best criteria for assessing risk appetite. don't you have epf? you may be exceeding your 80C limit, but that is not bad as long as you are saving money.
Kaushik asked, Hi Rahul, I am working in an MNC IT company. Till date have all secured investements like LIC, poistoffice, FDs etc. I want to try a small amount in Mutual funds only to get a high return in about two years. What do you suggest where shoudl I invest my money..
Rahul Goel answers, kaushik, hi. look at mutual funds as instruments that will help you build wealth over the long term. looking for high returns in two years is probably being speculative. and this is something we are not good at all at!
a asked, How to select a best mutual fund to invest
Rahul Goel answers, very good question... deserves a very long answer! i will take a short cut here... pl download personalfn's free guide on mutual funds here - www.personalfn.com%2Finvestment%2Fms' target='_blank'>www.personalfn.com/investment/ms
nats asked, hi rahul, Good day mate! Me and my wife are both software engineers. Our total CTC is 16 lacs P.A. We have 2 houses in our respective names. Therefore our section 80 c and the interest on house loans is taken care of. We also have insurance policies of about 1.5 lacs together.We still are left with around 45k every month. can u suggest us what to do now? Where wud u advice us to put the money? Iam not lookign for tax saving schemes.
Rahul Goel answers, nats, hi. well, put aside the money say towards your retirement kitty... since retirement is a long long way off you can consider investing in riskier assets like equity funds. opt for SIP mode; select your schemes well. get professional assistance... that would be best given that you both are working and probably have little time to devote to all this.
tushar asked, Hi Rahul, I am 37 year old and I want to retire on my age 50 years. I want to become crorepati at the age of 50. Please suggest me investment strategy for the same. My gross income is 6 Lac per annum
Rahul Goel answers, tushar, hi. all you need to do is put aside about rs 22,000 pm in instruments like equity funds which will yield you 15% pa... if your scheme selection is good, you should become a crorepati!
Anwar asked, Hi Mr.Rahul, If I invest 20000.00 monthly in the MF, After howmany years can I expect my investment value Rs.1 crore?
Rahul Goel answers, if you are investing in assets which will yield 15% pa, then about 14 yrs i reckon...
Saurav asked, Hi, I am 57 years old and would like to invest 50k (which have just matured from MIS). Could you please recommend a portfolio?
Rahul Goel answers, saurav, hi. your maturity proceeds are form a very low risk instrument. i am therefore tempted to say that you should invest in line with the profile of the earlier investment. of course, if your profile allows you to take some risk, then more investment avenues are available to you...
tuhin asked, Sir, one of my friend has told me to invest money in mutual funds, but i dont have any idea related to mutual funds. Can u please give the basic ideas and corresponding advantages?
Rahul Goel answers, tuhin, hi. best way is to employ the services of a financial planner and understand this. you can also download a free guide on personalfn a link to which i have given in a response to a query earlier in this chat.
iecotex asked, hello rahul Its me Pankaj Khetan from Gwalior. I want to invest Rs. 10 Lacs. for Financial Freedom. I want approx. 15-20000 Rs. Per month for my Basic Home Expenses. KIndly advice how can i do the same. advice
Rahul Goel answers, pankaj, hi, for the amount you wish to earn every month, you will need a corpus of about rs 20 - 30 lacs invested at about 8% (post tax). consider mips, post office mis, some fmps... build a portfolio so that your annual cash flow goal is realised, even though the flows may not be spread evenly throughout the year.
mktripathi asked, dear realy we can get more return from mutual fund than fd if so then why bank distrebuting loan instead of investing in mf
Rahul Goel answers, well, a lot of banks push both!!
SUBIN asked, which is the best form of investment for a new born girl child for her future depending upon studies and other needs?
Rahul Goel answers, subin, hi. best option in our view is a basket of diversified well managed equity funds.
amit asked, Hi Rahul I want to invest some money in MF could you please tell whether to invest in ICICI prudential Asia fund will be a better option or not? or suggest which Mutual fund should I invest?
Rahul Goel answers, we have recommended to our clients that they avoid investing in this fund. we have some notes on global funds on www.personalfn.com. pl do read them.
amitsharma81 asked, Hi Rahul , wat r views on NFO from Tata namely Tata Infrastructure Fund ? Thanks Amit
Rahul Goel answers, amit, hi. we will be recommending to our clients that they avoid investing in this fund.
Ashish asked, what will be the outlook for next one month .
Rahul Goel answers, ashish, hi. to be honest, i have no clue where the markets will be next month. all we know is how fundamentals look now, and how they could possibly look several years from now. based on that, we decide where there is an investment opportunity or not. since in the markets there is sentiment at play, fundamentals often get pushed out of the picture. and since sentiment is very fickle, we choose not to speculate on how it will change in the next minute, or next day or next month or even the next year.
Rahul Goel says, Thank you all for participating in the discussion. See you all next week!
Chat with Rahul every week! To read more transcripts, click here!