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?
In an hour-long chat on rediff.com on Thursday, mutual fund expert Rahul Goel replied to many such readers' queries. Here is the transcript:
Rahul Goel says, Good afternoon! Welcome to the discussion on financial planning! Let's start!
Padma asked, Hi Rahul,Good day to you.What are the ways of accumulating wealth,BEST & EFFECTIVE WAYS TO MULTIPLY THE HARD-EARNED MONEY which an investor has albeit inflation?Is Mutual fund the only option even after considering market volatility?
Rahul Goel answers, at 2008-03-27 13:00:03padma, hi. if you are looking at growing your wealth as againt preserving it, then you need to have significant exposure to asset classes like equity. you could either opt for stocks or equity funds, depending on whether you have time and the skills to manage a stock portfolio. mutual funds are a great option. what you will need to do is build a portfolio which will have equity, real estate, gold and maybe even some debt.
rajiv asked, hi rahul, i m intial level investor. i want to invest my 500000 Rs. how and where invest it.
Rahul Goel answers, rajiv, hi. the best way forward would be to identify an honest financial planner to guide you. if you wish to do this on your own, then you should begin by reading up on how to go about financial planning. i recommend you download the free financial planning guide from personalfn - Money Simplified. importantly, do not be in a rush to invest the money. also, do not fall for the lure of ulips or new fund offers.
ranjan asked, hi, which is the best investment option in the current volatile market condition ?
Rahul Goel answers, ranjan, hi. in our view you should invest in line with asset allocation plan that you have drawn up for yourself. if you have not done so, do it now! the reason being such a plan induces discipline and also sets you on course for achieving your long term goals and aspirations. so for instance if you are a disciplined investor, when stock mrkets rise, you will not go over board, and when they fall, you will probably be buying more i.e. you will stick to your asset allocation plan. having said that if you have appetite for risk, and have scope for adding equity to your portfolio, then this is probably a good time to consider investing some money. recommend that you stick to well managed diversified equity funds.
gaurav asked, I am a studend in Japan, and have accumaleted some money doing part time jobs, which I will continue for some time. Please guide me in investing this money sensibly. what options do I have when it comes to investing money in India ? thanks
Rahul Goel answers, gaurav, hi. if you have an investment horizon of over 5-yrs, then the best thing to do maybe is to invest about 50% of your monies in a portfolio of mutual funds (well managed, diversified); add the other 50% over the next six months to the same portfolio. i am assuming you have appetite for near term risk.
ranjan asked, hi, last one year i been keep investing 2 laks in MF SIPs. But most of my fund are giving me very less return. My time horizon is 3 years. My plan is to keep investing in another 2 years. Suugest me if this plan is good enough to get a good return. I invested ib Reliance Vision, HDFC equity, SBI Contra,Franklin Prima Plus, SBI Magnum. Are thses good funds, suggest if it is good to invest in these funds for another 2 years?
Rahul Goel answers, ranjan, hi. when doing sips you buy when the markets are rising, and when they are falling. in the near term therefore, the returns from sips tend to be muted. over 3 - 5 yrs however the benefit of cost averaging kicks in... that's when you will realise the benefit of an sip. in terms of the funds you own... we do not have a view on reliance visionl; we do not recommend sbi contra to our clients; both hdfc equity and prima plus a re good schemes to own. i do not know the allocations for the various funds... that too is important for a complete understanding. in any case, you definitely can work on improving your portfolio.
sachin_hye asked, As share market is going down, is it a right time to invest in mututal funds.
Rahul Goel answers, sachin, hi. from a historical perspective it is clearly evident that the best time to buy stocks is when no one wants to buy them... and to sell them when everyone cannot get enough stocks to buy! in our view, this is a good time to invest. however, stick to your asset allocation plan.
Pravit asked, I have invested in the following portfolio equally through SIP - Reliance Vision, Franklin India Prima Plus, Birla Frontline Equity, Standard Chartered Premier Equity, Magnum Multiplier 93,Reliance Regular Savings, HDFC Prudence and Reliance Growth. I am Looking to stay invested for 5 years primarily for capital appreciation. Is this portfolio okay. Do you suggest any changes ?
Rahul Goel answers, pravit, hi. it would have been interesting to see the allocations as well. in any case, in terms of the schemes you own, there are a few which we would not recommend to our clients. the ones we would would include prima plus and hdfc prudence. if you are building an aggressive long term portfolio, then you need to own schemes like hdfc equity. you should do a complete review of your portfolio.
sundar asked, Sir , I am investing through SIP Rs 1000 each in Reliance Vision , Kotak Opportunities , SBI Magnum Contra, Sundaram Tax saver Funds and Rs 500 each in Magnum Tax gain and Sundaram Capex Opportunities . I want to invest 10-15 years . Whether I shall continue this or I will change any funds ? Please give your opinion .
Rahul Goel answers, sundar, hi. if we were to build a portfolio for you, it is likely that funds from templeton, hdfc, dsp, quantum will find a place in the portfolio. you do not own a single scheme from any of these amcs! you need to build a portfolio of say about 5/6 funds... all well managed diversified equity schemes, some aggressive and some value style. with such an approach you will still do very well, but you would have taken a lot less risk in the process.
ram asked, I want to make 10 lacs. at the end of 3 years. Which is the best mutual fund scheme and how much should i invest to fulfill the objective.
Rahul Goel answers, ram, hi. since you need the money in 3 yrs, you can invest some, but not all the money in equity funds. the reason being as the date on which you need the money approaches, you will need to de-risk your portflio i.e. move money from high risk equity to low risk debt. one option is that you consider investing in capital protection funds.
sushil asked, i am 27 and earning 6 lacs per annum. I have a liability of 15000 per month towards home loan, every year i am investing 1,00,000 in ELSS for past two years and around 40000 in open ended funds. I want to retire at 45. Please suggest how much money should i have at that time to retire and where to invest now and how much???
Rahul Goel answers, sushil, hi. if you want to retire 18 yrs from now, and want to maintain the same std of living then you will need an income of rs 100,000 pm then. to achieve this goal, you will need to set aside about rs 21,000 pm in instruments yielding about 15% pa for the next 18 yrs.this investment will give you a corpus of rs 2 cr (post adjusting for your mutual fund investments), which invested at 6% pa will give you rs 1 lac per month as income.
super asked, what is the best investment option - one time investment or through SIP. Which is the best plan for multiple of money
Rahul Goel answers, hi. in times like these, when there is fear in the stock markets, some money can definitely be inevsted one time. the rest can be invested through an sip. otherwise from a planning perspective, if you have a salary income then sips are best for you; if you have lump sum, even then in most instances its best to average out the cost of investment. an SIP or an STP reduce the risk of mistiming the market.
rahuls786 asked, Hi Rahul, i m 30years old and have 2 daugters (4yrs, second one is 3 month old). How to allocate saving so that i have a huge corpus by the time they are 18 & 20yrs old. Pls suggest.
Rahul Goel answers, rahul, hi. lets take the case of your elder daughter. assuming you wish to give her rs 1 crore in todays value terms to her when she turns 22. the inflation adjusted value of this rs 1 cr will be about rs 2.8 cr. and to achieve this you will need to inevst rs 30,000 pm in instruments yielding about 15% pa. now, such a return can be got by a portfolio which is predominantly equity funds / stocks. you will therefore need to allocate max money into equity funds; some can go into PPF as the tenure of investment will braodly match. some gold too can be added to the portfolio.
niha asked, I am new in the field of investments. I studied about SIPs in mutual funds and had identified HDFC tax saver, sundaram tax saver and SBI tax saver to start with 1000 in each. But the present scenario of markets down has scared me off. Should i still continue with my plan? Also had invested 10000 in ULIP from LIC. what is best way to get good return from that. Should i exit now or wait for the next 15 years
Rahul Goel answers, niha, hi. do not get unnerved from what you see in terms of the sentiment in the stock markets. if you are investing for the long term, there is nothing to worry about. however, where you invest money is critical. you need to be careful in the selection of funds... the tax saving funds will save you tax; but you should also consider investing in some of the well managed diversified euqity funds. with regards to the ulip, well, you have already paid a huge expense for buying it... you might as well keep it. but do not buy more unless you understand the cost implications clearly!
girish asked, Please clarify how is the performance of the following funds. DSP ML Equity ( Growth), HDFC Equity Fund ( Growth), Fedility Equity (Growth), DSP ML Opp Fund, Sundaram Select MIDCAP, Quantum Long term Equity.
Rahul Goel answers, girish, hi. well, the portfolio that you own is very well constructed. in terms of the recent performance, quantum will stand out as it has lost the least among all equity funds on a year-to-date basis... hdfc equity has taken a hit because it had high exposure to icici bank... but from an overall perspective the portfolio you own would have done very well. and over time, given the quality of fund management teams which are managing your money, you should do very well.
jagdish asked, i have ordered for tata infrastructure fund through sip for 24 months is it ok to have sip so long or should i restrict to 6 months
Rahul Goel answers, jagdish, hi. we do not recommend tats infra, or any other sector fund for that matter, to our clients.
Anurag asked, Hellow sir, Hw to invest in Gold ETF? That investment is tax free or not?
Rahul Goel answers, anurag, hi. we have always advised our clients to have about 5% of their assets in gold. owning gold in an etf format definitely has its advantages.
Ricky asked, HI RAHUL, I WANT TO KNOW WHICH MUTUAL FUND SCHEME'S ARE TOTALLY RISK FREE?
Rahul Goel answers, ricky, hi. when you are inevsting in mutual funds, there is nothing like risk free. you can minimise the risk by say inevsting in a liquid fund... but there is always some risk. if you want zero risk, you need to invest money with the government of india!
Biswas asked, Hi Rahul, I am holding DSPML technologies.com-growth fund,Franklin prima plus- growth ( Each SIP for 5000 monthly for past 10 months). How long I can invest on this or should I stop investing on these? pelase advice. and how about investing in SBI magnum tax gain.
Rahul Goel answers, biswas, hi. it may be a good idea to avoid investing in the dsp ml tech fund. if you wish to invst in a dsp fund itself, then dsp ml opportunities in our view is a far better fund. howevever, i woudl recommend that you build a portfolio of funds, with the help of a financial planner if need be. over a long term this will work to your benefit.
Punit asked, My Target is to have 25 Lacs at end of 20 years from now. Please suggest how should I go ?
Rahul Goel answers, punit, hi. if you wish accumulate an inflation adjusted rs 25 lacs 20 yrs from now, you need to set aside only rs 6,000 pm in assets yielding about 15% pa. again, this kind of a return can be delivered from a predominantly equity fund portfolio.
Rahul Goel says, Thank you all for participating in the financial planning discussion. If you have any queries, please do send them to info@personalfn.com
Chat with Rahul Goel on Thursday, 1 pm
(Due to circumstances beyond our control, date and time of chat may change)
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