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What are balanced funds? Find out

March 07, 2008 12:03 IST

Do things like mutual funds baffle you? Are you aware of the investment options they provide?

What are the best mutual funds available in the market? Which funds accrue maximum profits?

What are the crieria for evaluating a fund? Which funds provide the best SIP options? Are SIPs the easy way of making quick bucks? When and how should one buy mutual funds?

Personal finance expert Rahul Goel replied to many such reader queries in the one-hour long chat on Thursday on rediff.com. Here is the transcript:

Rahul Goel says, Good afternoon! Welcome to the discussion on financial planning! Let's start!


Sandeep asked, i have take loan from indiabulls before 11 months but now i want to foreclose my loan but they are demanding twice amount now what can i do ?
Rahul Goel answers,  at 2008-03-06 12:58:38sandeep, hi. this seems a bit unusual. i suggest you read through the agreement you have signed with them to cross check this fact.
Param asked, Hi Rahul, Any specific reason for the total absence of Personalfn from Eastern India? This region is full of vultures (oops, I mean agents) with zero competence, horrible product knowledge and thorough lack of professionalism. Your presence can help change things for the better. Request you to look into it. Thanks!
Rahul Goel answers, param, hi. we continuously evaluate the opportunity of setting up operations in other cities. presently we do not have plans for setting up a presence in east india. request you to make the most of the information and fee based products available on personalfn.com
Param asked, Hi Rahul. I need some help/advice in resolving a service issue with FT (I used to think they are the best in service - I'm sure you do too - until recently). I have submitted my PAN copy twice - personally at the ISC, but they claim it is not in their "system". So they keep asking me to submit it again, without acknowledging their error. Not sure if this is their way of discouraging "direct" investors. Can you suggest any e-mail id beyond service@templeton.com for proper escalation? Thanks in advance.
Rahul Goel answers, hi again. the best way to deal with this is to write to their compliance officer, and maybe mark a copy to sebi. that should ensure that the transfer agent looks seriously into your grievance. you can get their contact details here - http://www.franklintempletonindia.com/
vajravel asked, Hi, Could you pls tell me how is morgan stanly ACE fund and DSP ML Natural resourcs fund??
Rahul Goel answers, hi. we have recommended to our clients in personalfn that they avoid inevsting in both the funds. we recommend that our investors put monies into diversified equity funds with great track records... of course there are many other criteria. when it comes to nfos, it's is almost always a "no" from us.
raj asked, In which Tax Saving Mutual Fund Should I Invest. And Is it better to go for SIP
Rahul Goel answers, raj, hi. if you wish to invest in a tax saving fund for this finanical year, then you really do not have the option of an sip. you will need to do lump sum. consider funds like hdfc tax and fr india tax. even dsp and fidelity tax form can be considered. have at the most two tax schemes in your portfolio.
moonmoon asked, Hi Rahul, I earn 2,80 p.a. We are a family of five members and all are dependent on me. Pls. advice the best way and the amt I should set aside for future.
Rahul Goel answers, well, you should save as much as you can. and then invest the monies in line with your needs and objectives. there may be a possibility that there may not be enough surplus to invest in line with what the plan demands, but in any case start with what you have. over time as you have more surplus, you can cover up the deficit.
Abhiram asked, hello sir, wat r d options available to evaluate a mf except its past performance
Rahul Goel answers, abhiram, hi. you should look at performance of a fund in periods when the markets fell; whether the scheme is being managed in line with its investment style; the quality and construction of the portfolio; the fund management team and its experience... and a lot more factors!
ty asked, How good is Birla Mutual Fund Growth Plan
Rahul Goel answers, presently, we do not recommend Birla schemes to our clients. but they are a part of our active research coverage... recently we wrote a research note on birla top 100... you can read it on personalfn.com
subir asked, In todays market - how do invest.Please advice
Rahul Goel answers, subir, hi. well your question is short, but the answer to it is going to be very long! i suggest you download our free guides - money simplified from personalfn.com. reading them you will get a very good sense of how to go about investing monies.
joel asked, I am new to any kind of investment. Do any mutual funds invest in both stocks and bonds?
Rahul Goel answers, joel, hi. such funds are called balanced funds. they could be find a place in a long term portfolio which is looking at growth, but is keen to be as volatile as the market.
Navin asked, Hi Rahul, Pls tell be about some good mutual funds for investment
Rahul Goel answers, navin, hi. there are a lot of good funds out there... you need to build a portfolio of funds which suits you best. for instance we think hdfc equity is a good fund for an aggressive long term portfolio. such a fund will not suit a portfolio which is geared for a conservative investor... so you will need to select schemes which suit you best. any financial planner will be able to guide you with this.
kuldeep asked, i want to plan for my pension, my age is 27. for which plan i should opt either ULIP or Mutual fund . Monthly my expenses are rs.15000.00. What amt i should save monthly to meet these expenses at age of 50.
Rahul Goel answers, kuldeep, hi. to be able to earn an inflation adjusted rs 15,000, 23 yrs down the line, you will need to invest about rs 10,000 per month now for the next 23 yrs at an average return of 15% pa. however, you will need to factor in that as time passes, your standard of living will imrpove and therefore you income needs on in the future will be a lot more...
kumari asked, Hi Rahul, Can you please suggest some good investment options for kid's future especially to take care of their educational expenses.Thanks much.
Rahul Goel answers, kumari, hi. best would be to build a portfolio of mutual funds that will deliver capital appreciation over the long term. from the perspective of security, take term insurance for yourself. this combination will do much better than a ulip in our view.
manas asked, I want to invest in mututal fund 20K for long term i.e. 10 years which fund is best
Rahul Goel answers, manas, hi. consider funds like hdfc equity and franklin india flexicap. you shuld also consider investing in value funds like quantum long term equity (disclosure - personalfn and quantum mutual fund share the same founder). value funds are great performers over a stock market cycyle... to understand them, all you need to do is look at their performance year to date, they have done far better than the stock market.
manas asked, Hi good afternoon, I am invested in sip of FT Bluechip (Dividend) & Icici Dynamic (Dividend) What is future of both fund
Rahul Goel answers, manas, hi. franklin bluechip is a large cap fund which has performed very well over the long term... however, maybe you will be better off in a diversified equity fund. but if you wish, you can stay on with bluechip. with regrsds to icici dynamic, we are not recommending the same to our clients.
bency asked, Hi Rahul, I am 35 yrs 2 kids, have insurance, no loans, no investments, no property. However i have the ability to invest 5 lacs immediately and about 5 lacs per year for the next 3 years. Kindly advice on the long term investment options
Rahul Goel answers, bency, hi. list out your objectives and prioritise them. and then with the help of the finanical planner draw up plans for each of them. post that you can invest monies towards the various plans. prima facie, do not buy more savings based insurance. if at all, you should buy term insruance. from an investment perspective look at mutual funds, gold, stocks, property etc.
AMITK asked, What is the forecast for the newly launched funds HDFC infra and ICICI Pru fusion-3?
Rahul Goel answers, amit, hi. we have recommended to our clients in personalfn that they avoid investing in these funds. we do not know how well they will do in the future; all that we know is that the risk return trade off may not work to the advantage of our clients.
Manish asked, Hi Rahul, Just want to know if entry load on Mutual Fund investment is still applicable or is it done away with?
Rahul Goel answers, manish, hi. if you invest money directly with the fund i.e. without the assistance of a distributor, then there will be no entry load charged. but if you do use a distributor then there will be an entry load.
madhavi asked, I want to invest 20,000 for long term i.e. 10 years how much i get after 10 years which is best fund
Rahul Goel answers, madhavi, hi. if you are able to set aside the money at 15% pa. then in 10 yrs the value of the investment could grow to rs 80,000
sunil.wadhera asked, i want to invest short term/ 20,000 to25000 which fund is suitable for me, in which higher retun is avialable
Rahul Goel answers, sunil, hi. if you are looking at investing monies for a couple of months then liquid funds are best for you. but if you wish to invest for say 3 - 6 months, then consider fixed maturity plans. both liquid funds and fixed maturity plans are offer attractive tax efficient returns.
dillip asked, hi rahul, tell me is this proper time to invest in mutual fun?
Rahul Goel answers, dillip, hi. its always a good time to invest in funds. you have to pick and choose the mode however. you could invest a lump sum or maybe do an SIP. in any case you need to select the scehems very carefully.
SAUH2008 asked, Hi, Rahul, i am working in Saudi Arabia and i want to invest around 15 lacs, please advise me where i have to invest.
Rahul Goel answers, well, you should consult a financial planner for the same... for me to be able to guide you, a lot more information is required. the other alternative is you could subscribe to fee based services which can guide you... incidenally personalfn does offer one such service. pl see - www.personalfn.com/fsplus
anand_1980 asked, Sir,I am 28 yrs old,married with 1 kid 4 months old. Current monthly salary is around Rs 42K and after my EMIs(16,000) and expenses, I am able to save 20K per month.I would like to save for my child's future and retirement to build a corpus.My EMIs would be over in another 15 months time.Can you give me a method to go about it?
Rahul Goel answers, anand, hi. good that you have identified your objectives already. now you will need to draw up the plans to achieve them. i suggest you begin by using the financial planning calcs on personalfn.com. this will give you an idea of the amount of monies you need to invest now to meet your future needs. then in discussion with a finanical planner you can always fine tune this plan. also, on personalfn there are retirement and child plannig guides. pl do read the same.
Abhiram asked, rahul, plz recommend whr 1 should invest if he is willing 2 invest 1lac rupees 2 get deduction us 80c... he doesnt hv any dependants as of nw, age 25
Rahul Goel answers, abhiram, hi. you can consider a mix of tax saving funds and maybe some PPF. since there are no dependents and assuming there is no near term need for money, you can take risk for future capital appreciation. from this perspective tax saving funds are best.
riyas asked, Hi rahul, i have invested Rs 10,000 in ICICI infrastrucure growth, ICICI real estate growth, Sundaram BNP paribas energy thematic fund, UTI Infrastrucutre series fund 1 growth for long time. I have more moeny to invest in MF. can you suggest me some good funds for long term like 5 to 6 years. Thanks
Rahul Goel answers, hi. all your monies are in sectoral / thematic funds. well, if you are aware of the nature of funds and the risk/return proposition they carry, then no issues. in our view however, sectoral / thematic funds should be avoided... or at max should not be more than 10% of your portfolio of funds. the surplus you have now should ideally go into well managed diversified equity funds. diversified funds invest in a range of sectors as against a sector or thematic fund which is constrained by its mandate to invest only in a particular sector/s. even before you move ahead with this, please ensure that your overall asset allocation permits more exposure to the stock markets...
Rahul Goel says, Thank you all for participating in the discussion. IN case you have any queries, please do write in to info@personalfn.com.

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