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Markets volatile: Which MFs to buy now?

October 04, 2007 14:19 IST

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! Welcome to the financial planning discussion!


sudhir asked, what is the best going sip plan under regular monthly payment of Rs 7000 for 7 yr which may growth upto 30% and for the view of sip payment 3000 regular no time matter which one is good?
Rahul Goel answers,  at 2007-10-04 12:59:57sudhir, hi. an expectation of a 30% return is unrealistic. and as far as the best funds are concerned, i need to know more about you before i can recommend what is "best for you". one fund may be good for me, but may not sit you at all. so, pl be realistic in your expectations and also select funds which suit you best.
sudhir asked, but both should be come under tax saver scheme
Rahul Goel answers, ok, now, there is more clarity. our preferred schemes in this category are hdfc long term advantage and fr india tax shield.
Moneysh asked, Hi rahul!! thanx for your advice for avoiding sector or thematic funds. I want your opinion on HDFC Equity/ Top 100 also I m confused between fr. flx cap and fr prima plus. please suggest me which is better option?
Rahul Goel answers, hi. choosing one over the other will be a function of your needs and profile. if you are looking at taking on a relatively aggressive view, then hdfc equity is good; with regards to the other two, i tend to prefer fr india flexicap. i caution you against adding schemes to your portfolio at random. take a portfolio approach, and not just a scheme specific approach to building wealth.
Moneysh asked, Rahul.. wahts your opinion on star rated funds. should one keep in mind rating while investing?
Rahul Goel answers, hi, at Personalfn we are not big supporters of star ratings. we prefer to recommend schemes to our clients based on their needs and profiles. you can read more about our view on such ratings on www.personalfn.com... we recently did put up a note on the same.
PETER asked, I am an NRI and want to invest in Indian Mutual Funds. I am looking forward to approximately 15% average yield. Could you please advise me on how I can deploy Rs 10 lakhs.
Rahul Goel answers, peter, hi. its wonderful to know that atleast someone is realisitic in his expectations in terms of a return from the stock markets. most others want to earn 15% per month! in my view well managed diversified equity funds can deliver a 15% per annum return over 3 - 5 years. however given the euphoria in the market, you may want to invest gradually into the market as against putting in a lump sum amount.
tuhin asked, Hi Rahul. Shall one go for Dividend option in ELSS. What are its benefits if there are any??? Also is this the right time to continue lumpsum investments considering 3 years time period in MF. Best Reagrds,
Rahul Goel answers, tuhin, hi. you should opt for the dividend option only in case you need some cash flow every year. we would prefer that the money is left to compound i.e. the growth option. with regards to the timing, we would recommend you avoid investing in a lump sum... go in for a six month STP instead.
ss asked, I am 28yrs, new investor with initially Rs. 50,000. Should I try equities, MFs, or some other. I am a bit confused. I plan to be a long term investor and hold on. Please advise.
Rahul Goel answers, hi. i recommend that you do not "try" any instrument. you do not wish to lose your hard earned money just to learn how to invest. i suggest you employ the servcies of an honest financial planner. one thing you definitely need to consider soon is taking a term insurance policy.
ashok asked, Can you please suggest an aggresive portfolio of Mutual Funds which can give me in excess of 20-25%?
Rahul Goel answers, ashok, hi. i think over a three to five year period delivering such a return will be difficult for any well managed fund. its best you keep your expectations at a more realistic 15% pa.
ash asked, Dear Sir, I have 1500 units each of SBI magnum bluechip and franklin small cap (growth) funds.Why these funds are not performing well? Shall I hold or sell it? Kindly advise me.
Rahul Goel answers, ash, hi. with regards to sbi bluechip, the performance has not measured upto expectations. in case of the small cap fund, you should have been aware at the time of investing that funds investing in small cap stocks carry more risk in the near term. i think rather than deciding whether or not to redeem these schemes, you take a look at your entire portfolio of funds and be sure you own what is best suited to you. unless your entire portfolio is geared to meeting your needs, there will be little impact of some small alterations in the portfolio.
Vijay asked, Hi Rahul... Can you please let me know which are the 2 best large cap funds out there?
Rahul Goel answers, vijay, hi. fr india bluechip is definitely a very good fund... there are others too. there is one from dsp... we would prefer diversfiied funds (which invest in large caps too) over dedicated large cap funds.
Amith_blr asked, I earn 8 Lack pa now and i have a term cover of 12 lakh. Iam 27 years old now and single. How much insurance i need to have
Rahul Goel answers, amith, hi. i need to know more about you to be able to guide you on this... may i recommend that you use the Human Life Value calc on www.personalfn.com to guide you with this.
Menon asked, I have about 90 lakhs invested in blue chip shares like infosys, satyam,tcs, ranbaxy, reliance cos., L & T, etc. Do you recommend that I continue with these blue chips ? If not what is the best alternative?
Rahul Goel answers, hi. what should determine whether to hold on to these shares your not it your ability in tracking these stocks closely as also the availability of time for the same. if you do not have either, best to be in mutual funds, in our view. you could retain a small % of your assets in stocks though, but definitely not the bulk.
sanjeev asked, Hi Rahul i want to invest in SBI Magnum Tax gain ,is it performing well or i will try for PNB Personal Tax sever.
Rahul Goel answers, sanjeev, hi. neither of these schemes are recommended by us to our clients... for various reasons. we prefer hdfc long term adv and fr india taxshield.
Amol asked, Hi rahul I have SIPs each of 3000 in HDFC LT Advantage, DSPML Tax Saver and Fidelity Tax Saver and 2000 in SBI Magnum Tax Gain. Is this investment right???
Rahul Goel answers, amol, hi. the first three of the schemes belong to amcs that meet our criteria to qualify as an investment destination for our clients. so i think you are broadly right!
kanta_007 asked, Hi rahul i have one doubt generally most of the people recommend HDFC LTA in elss scheme these scheme is giving very less when compared to others like sbi,fidely shall i continue to invest in HDF LTA or i have to stop investing in HDFC LTA?
Rahul Goel answers, hi. i think you need to evaluate what is called the risk adjusted return over time. if you look at only the return, then those who have maximum exposure to momentum stocks will perform the best. this may not be best for you (if the fund manager is chasing mometum stocks as a strategy).
james asked, hi , i do save monthly 3000 in my bank ,can u tell me the best investment plan,where my money grows.
Rahul Goel answers, james, hi. by simply moving your money into a liquid fund, you will earn a spread. the issue you might face is that the minimum investmetn required for such schemes higher than what you have at present.
Ravi asked, Hi Rahul, I am looking to get a fixed monthly income of Rs. 40,000. Is this possible with an investment of Rs 60 lakhs? if yes, what should comprise of the portfolio?
Rahul Goel answers, ravi, hi. this is very much possible... you will need to inevst your monies in instruments which can deliver a return of abotu 9% post tax. this should not be difficult. any honest financial planner can guide you on this.
Raghul asked, Hi i can save 3k and can i make 1 crore in next 25 yrs if go for SIP ? Which plan in Mutual Fund can suit me ?
Rahul Goel answers, hi, it may be possible to accumulate rs 1 cr 25 yrs from now... but the value of the 1 cr then will be a lot less than what you expect it to be. if you want a "value" of rs 1 cr then you need to invest about 12,000 pm. you will need to invest money in assets like mutual funds which yield about 15% pa.
Veda asked, Hi How best we can plan our financial plan for childeren
Rahul Goel answers, veda, hi. planning for children is a very simple process which requires access to honest advice and discipline. since you seem to be a novice its best to get professional guidance. but if you wish to read up on your own, you can download the money simplified guide (free of cost) from personalfn on this topic.
sandeep asked, Hi Rahul, Hows's this new tata mutual fund
Rahul Goel answers, sandeep, hi. if you are referring to the global infra fund, we are telling our clients not to invest in the fund.
SHRUTI asked, I have been investing in Fidelity Equity Fund for last 2 year through SIP of 1000 PM. Please suggest whether it would be wise to invest more of fund in this MF. My investment horizon is 3 yrs.
Rahul Goel answers, shruti, hi. you should have about 5/6 schemes in your portfolio. and the weightages of the schemes need to be aligned to your needs. so even though this may be a good scheme, you do ot want to put all your money into it.
Kapil asked, Can you pls suggest me on investing on House/Property or Mutual Funds?
Rahul Goel answers, kapil, hi. how much property do you own currently? do you have sufficient property to take care of your personal needs, including inheritance. if you do, then avoid putting more money in property. there are a lot of disadvantages as we see it - maintenance, illiquidity, lack of diversification, govt regulation etc. ... when real estate funds become available, then you will have the best of both!
geeta asked, Hi Rahul,I have invested 20,000 in Birla mutual fund ,is this investment is right? I also have an SIP of 1,000 per month in Birla, my agent told me to deposit 10,000 first & than 1,000 per month till now I have not got any aknowlegment recipt from them, I have started it one month back Please suggest
Rahul Goel answers, geeta, hi. is this the only mutual fund you own? if yes, then you have not been guided right in my view. build a portfolio of 5/6 funds and put money into them regularly. also, select schemes which suit you best. if you were a personalfn client, it is unlikely your money would have gone into birla mutual fund to be honest.
dineshbhandary asked, what is the future of kotak global emerging fund., which get closed in sept 07
Rahul Goel answers, dinesh, hi. as of now, at Personalfn, we have not recommended any of the global funds to our clients. we hope that sooner or later there will be atleast one scheme which will meet our criteria for recommending to our clients.
dineshbhandary asked, what is the future of kotak global emerging fund., which get closed in sept 07
Rahul Goel answers, dinesh, hi. as of now, at Personalfn, we have not recommended any of the global funds to our clients. we hope that sooner or later there will be atleast one scheme which will meet our criteria for recommending to our clients.
nick asked, What r ur expectation about market in coming 3 - 4 months
Rahul Goel answers, nick, hi. at personalfn, we have no idea where the stock markets are headed in the near term. we cater to clients who are inevsting for the long term, for which we have a view. in any case we do not pay much heed to performance of the benchmark indices as they tend to be driven by a handful of stocks.
shailesh asked, Hello sir, Is is worth buying Tata Indo Global infrastucture fund? How much NAV can be expected after 3 years?
Rahul Goel answers, shailesh, hi. like i mentioned earlier, we are not recommending this fund to our clients.
kaushik_asha asked, Hi Rahul, I am an NRI, with the dollar vs rupee going down or very low, can u please suggest the best way to save money?
Rahul Goel answers, kaushik, hi. personalfn recently released the investment guide for nris (free download). i suggest you read the same. you can get a copy at www.personalfn.com.
Rajesh asked, hello rahul, i wish to invest a sum of around 50-70K yearly which should give me good returns and tax benefits as well. pls advice some options to me.
Rahul Goel answers, rajesh, hi. if you are looking at availing the benefit under section 80C then you need to invest in the tax saving funds. i have already discussed names of schemes earlier.
Amar asked, Hi Rahul, a very simple and strightforward query...I need to invest 50k without much risk, to save Tax...what would u recommend ?
Rahul Goel answers, amar, hi. your query is indeed very simple. but i am afraid the answer is not. the obvious answer is to put in ppf or tax saving funds or insurance etc. however, the right answer probably depends on your other needs. we try and educate our clients at personalfn that they can not only achieve their goal of tax saving when investing their monies, but also a lot more if they plan better. i think you should plan too to achieve a lot more!
Vijayanand asked, Hi, I would like to invest my amount based on long term. What do you suggest if the time frame is for 10 years and what sholud my portfolio be.
Rahul Goel answers, vijay, hi. assuming you have an appetite for risk, you should have a portfolio consisting predominantly of equity shares and funds. buy shars only if you have access to the right advice or the ability to select them and then track them. over a 10-yr equities will likely offer an attractive risk adjusted return. be careful which funds you select... you do not want to churn your portfolio.... it will cost you a lot!
Sunil asked, Hi Rahul, Is it right time to buy mutual funds?
Rahul Goel answers, sunil, hi. its always the right time to invest.. on the mode may vary! presently you may want to invest via STP. what matters most is where you put in your money.
Ramesh asked, Hi Rahul. I have about 1.5 Lakhs and want to invest in MF to support my daughter's (one year old) education. Suggest me some good plans in the market. Thanks.
Rahul Goel answers, ramesh, hi. it seems you have already decided to invest in ulips. well no harm done if you can select one which is low on cost and has the ability to deliver the return you expect. i would suggest that you consider mutual funds too... which probably should account for a chunk of your portfolio.
kamal asked, Hi, I am new to financial planning...what would you suggest for new commers?
Rahul Goel answers, kamal, hi. i would suggest that you read up a lot on the subject... there are a lot of websites out there. and then you select an honest financial planner to guide you. a combination of both will help you build a plan best suited to you.
xyz asked, I have a tax paid salary of 0ne lakh p.m. I want to invest 20000 p.m. in 4-5 different MF's thru SIP's. My age is 36 and I expect to keep working for another 20-25 years. I am also invested in Stock Mkt. Pl. suggest me some good MF schemes with or without Tax saving. My horizon could be anything between 5-25 years
Rahul Goel answers, hi, like i have suggested earlier, have about 5/6 schemes in your portfolio, in the right allocation. consider funds like hdfc equity and fr india flexicap. avoid investing in sector or thematic funds. to put this whole thing together you will need professional guidance.
sonu asked, sir i have 3lakhs.i have 2 boys of 7&5 yrs old and want to plan for their education and marriage.
Rahul Goel answers, sonu, hi. as suggested earlier pl read the guide to planning your child's future which is available on personalfn (money simplified section).
rocky asked, Hi Rahul, I have never invested in my 2 yrs of career.I have projected 40 thousand as investment for the financial year 2007-2008.Plsnning to invest 10k in Sbi mutual fund,10k in Sbi PPF,10k in NSC,10k in LIC.Could you tell me if I can make an initial investment of 10k in PPF/MUTUAL fund and go ahead additing to that in the same Fiscal year(2,3.. times a year with similar amounts).pls advice
Rahul Goel answers, rocky, hi. i am keen to know why you have allocated the money in the mannner that you have? if you are investing for the long term, why aren't you taking on more risk? do you have appetite for risk? do you have dependents? without this and more info i am unable to guide you.
kohli_arti@rediffmail.com asked, Hi Rahul, I bought UTI Contra fund two year back and today i couldn't get any jump in the price. Pls suggest me which mutual fund can give more returns in future. Also if we want to invest for our kids future what is the best option available.thanks.
Rahul Goel answers, arti, hi. at personalfn we tend not to recommend alternative investment stratigies like contra. we prefer the plain vanilla diversified equity funds. and they have done well. when you are investing for your children, best is to invest in a basket of mutual funds. and to ensure you protect their future, ensure that the bread winner in your family is adequately insured.
sujit asked, I am 23years. I have no idea about equity or mutual fund. I want to invest 15000 p.m. Please suggest so that i ll get good return
Rahul Goel answers, sujit, hi. if you have no idea, then you should be very careful before committing any monies to these instruments. best would be to employ the services of an honest finanical planner to guide you with your investments. this probably would be the wisest decision you take with regards to your investments!
priya asked, Hi rahul..I am planning to invest 50,000 rs in tax saving mutual funds. Should i buy Principal Personal Tax Saver OR HDFC tax Saver MF?
Rahul Goel answers, priya, hi. as mentioned earlier we prefer hdfc long term adv and franklin india taxshield.
Akhil asked, sir, You had earlier pointed out in ur discussion that its better to avoid thematic funds. But if one looks at the returns,there is no peer to these funds. your say
Rahul Goel answers, akhil, hi. thematic funds have done well. they tend to do well over short periods of time. but over a cycle the returns may not impress you. just look back at the performance of technology and pharma funds. and since these funds are still few, peer comparision may not be meaningful. in our view best is to avoid such funds in any case.
Partha asked, Hi, I am 32 want to have 50 lakhs amount in my hand when I will be at 50,Please suggest me with minimum return what will be the SIP amount to be invested for the said duration of 18 yesrs which is likely to be counted u/s 80C
Rahul Goel answers, partha, hi. at 15% per annum, and an assumed inflation level of 5%, you will need to set aside about 12,000 pm. but if the return were to be lower at 8%, you will need to set aside about 33,000 pm.
Raja asked, Rahul, is there any index investing fund out there - similar to Vanguard?
Rahul Goel answers, raja, hi. yes there are. but in our view actively managed funds will outperform the index funds over time. you should go in for actively managed funds in our view. of course the well managed funds...
shobhana asked, hi rahulji, shobhana here. recently invested in global mutual funds and reliance power funds,tata global and sundram Bnp paribas. is it okay?
Rahul Goel answers, shobhana, hi. the answer to your question is "no". you need to avoid investing in thematic and sectoral funds if you wish to build over the long term. even the global funds that have been launched so far are not what we like. we suggest you take a long hard look at your portfolio once again. also, its time your asked your relationship manager some tough questions.
Rahul Goel says, Thank you all for participating in this dicussion. See you all next week!

Chat with Rahul every week! To read more transcripts, click here!

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