» Business » Golden tips to invest smart and be rich

Golden tips to invest smart and be rich

November 10, 2011 17:30 IST
Get Rediff News in your Inbox:

InvestmentsAre you always at a loss while planning your finances?

Are you aware of the investment options available in the market? How best can you plan your finances?

What are the crieria for evaluating an investment option?

Are mutual funds profitable investment options? When and how should one buy mutual funds?

In an hour-long chat on on Thursday, financial planning expert Sailesh Multani offered some valuable tips. Here is the transcript:

Sailesh says, Hello & Good evening - welcome to this chat session

Sailesh says,  For all those who are looking forward to recommendations on various types of mutual funds, here are my picks. In the equity fund category – HDFC Top 200 Fund, DSP BR Equity Fund and Fidelity Equity Fund. In the balanced fund category, I recommend HDFC Prudence Fund. In the ELSS category – HDFC Tax Saver and Fidelity Tax Advantage Fund

RAJEEV asked, which is the best investment option
Sailesh answers,  at 2011-11-10 15:59:39 Hi, the best investment option depends upon your investment horizon and risk tolerance level. If you are willing to take high degree of risk and invest for the long term then equities are ideal for your portfolio. If you are looking at safety of capital with assured income, then bank FDs are the best choice. Ideally you portfolio should be diversified to reduce the volatility in your portfolio. An ideal portfolio would consist of equity funds, stocks, bank FDs, bonds and Gold ETFs.
ramesh asked, what is the safest and maximum retun investment today
Sailesh answers, Hi, if you are looking at safety of capital then your ideal choice should be bank FD. One year rate of interest for bank FD is in the range of 9.50-10%
balachandra asked, I started Rel Growth and Div Power 5 years back, and stopped SIP deom April 2011. Can I redeem the same and invest where?
Sailesh answers, Hi, both the funds should be redeemed. You can invest the redemption proceeds into HDFC Top 200 Fund and DSP BR Equity Fund. Both the suggested funds are among the consistent performers.
balachandra asked, I started SIP 3 months back in HDFC top200,prudence,equity and Midcap and Fidility equity,ICICI foc blue chip is my portfolio is good
Sailesh answers, Hi, overall a good portfolio. You should continue with the SIPs for the long term. You may not see the benefit of investment through SIP immediately. Review your portfolio once in 6 months.
balachandra asked, Can I start GOLD ETF now, if so which one to start
Sailesh answers, Hi, you should start investing into gold. Allocation to gold should be capped at 15% of the total portfolio. Invest in Gold via the ETFs. I recommend Goldman Sachs Gold BeES
Sailesh answers, Hi, there was a news report few weeks ago that a proposal has been sent to ministry of finance to raise the PPF limit from Rs 70,000 to Rs 1 lakh.
srd asked, Helooo Sir, Tell me some Tax saving instruments for good return.
Sailesh answers, hi, for returns you should invest in PPF and ELSS. PPF is debt instrumment. ELSS is a diversified equity fund. You can invest in a combination of both
mmm asked, whats a better promise gold fds or equities
Sailesh answers, hi, between Gold, FDs and Equities, equities will give better returns. It is true that gold has been an outperformer in the last one year but that is not expected to be the case always. In the last one year a lot of money has move to Gold because investors are avoiding risky assets like equities. This is because of the sovereign debt crisis in the Europe. However, asset classes have their own characterisitics which do not change. Equities have the power to grow and multiply your money. FDs can generate regular income. Gold at best can be treated as an insurance in your portfolio
Manas asked, Sir, I have most of my investments done in UTI AMC do you suggest any other AMC where I can invest by withdrawing from UTI so that it can fetch more returns.Please advise me about the HDFC top 200 fund.Wheather to purchase or not Thanks
Sailesh answers, hi, is prudent to have a diversified portfolio consisting of funds from different fund houses. Exposure to one fund house can make your portfolio volatile. Also the performance of your portfolio is hinged on the performance of UTI AMC. Therefore it is better to add funds from other fund houses like DSP Blackroc, Franklin Templeton, Fidelity and HDFC
Sailesh answers, hi, have you taken a break from work or you have called it a day. If you have retired then you need to work out how much income you need per month to support your household, lifestyle, medical and other expenses. Based on that you will have to decide whether the corpus of Rs 40 lakhs can generate the desired income. IF not then you will have to take a look at your expenses to ensure that income generate through Rs 40 lakhs is sufficient
sony asked, where to invest to get maximum returns for long term 10-15 year(PPF/SIP/FD/RD)? I want to invest 15K per month.
Sailesh answers, hi, it is always better to have a diversified portfolio consisting of debt instrument like PPF, equity funds, Bank FD. Accodingly I would suggest all the 3 in your portfolio. The allocation of course will depend on your investment horizon and risk tolerance
Abhinay asked, Sir, I am into stocks. Can you please guide me as to whether I am investing the correct way by opting for stocks?
Sailesh answers, hi, according to me you should invest in stocks if you have the time, information and skill set to study the financials of all the companies that you have in your portfolio. If lack in any of the three basic requirements, then you should entrust the task of managing your money to professional fund managers. therefore the best option is to invest your money in diversified equiy funds through SIPs.
pbk asked, Have retired & received Rs.20 Lacs PF money. Where do I invest for monthly returns with complete safety ?
Sailesh answers, hi, you can invest your money in Bank FD. You can lock in your money for 3-5 years if you get a good rate of interest from your bank. you can have a look at the FD offered by HDFC Ltd. Post Office Monthly Income Scheme (POMIS) is also a good option. If you are a senior citizen, then you can even consider investing your money into 9% Senior Citizen Savings Scheme. maximum investment in this scheme is Rs 15 lakhs
eskay asked, Would like to invest for my daughter's education 7yrs down the line. with monthly saving of 10K, how much can I make if invested as per ur recomendations,.
Sailesh answers, hi, if you invest a sum of Rs 10k per month into equity funds and bank RD in the ratio of 50:50 and target an average annual return of 9% p.a. then you can expect your daughter's education corpus to be Rs 11.65 lakhs at the end of seven years.
sk12345 asked, how about investing in MIS and reinvest in RD
Sailesh answers, hi, this is a good investmnt option. you can link your MIS to RD.
arkay asked, i am 43 i need retirement plan how much pension plan is advised at what stage
Sailesh answers, hi, you need to get a retirement plan written for yourself with the help of a trusted and competent financial planner. The plan will tll you how much retiremeent corpus you should accumulate by the time you retire to maintain your current standard of living. the plan will also guide you as to how should you go about build the desired corpus. I would not recommend any pension plan sold be insurance companies for retirement planning.
alok7383 asked, which one is better option NPS or PPF?
Sailesh answers, hi, there is no track record of NPS. therefore I am not recommending it to any investor.PPF is no doubt among the best debt instrument available to today.
Dip asked, Hello Sir,...Very Good Morning.... Mainly I am doing investment in PPF and FD. Can you please suggest investment scheme in which I can get min. return of 14%
Sailesh answers, hi, your PPF and FD can certainly not deliver a return of14%. The only asset class that has the potential to generate this return is equity. you should consider investing into diverisified equity funds through the SIP mode.
MVSMadhavaRao asked, I want to plan for retirement. I am earning Rs.65K per month. Please tell me some investment plans that I should invest until age 58.
Sailesh answers, hi, if your planning for your retirement you should get a retirement plan written for yourself. Dont rely on pension plans to take care of a comfortable retirement.
piyush asked, i have invested 3 years back in Magnum tax gain scheme,Birla Tax relief 96,HDfc tax saver fund,Principal personal tax saver fund,Sundaram,Icici etc. should i redeem this and invest in some other scheme or should i continue in same.I dont need money right now and also almost all funds are in profit.
Sailesh answers, hi, first of all you should consider trimming your portfolio size. It has got far too many ELSS funds. I would advise you to redeem all the funds except HDFC Tax Saver. The redemption proceeds can be reinvested into non-ELSS funds like the ones I have recommended at the start of this chat. Or you may invest in Fidelity Tax Advantage Fund if you havent done your tax planning as yet.
ajoy asked, What type of insurance we should do
Sailesh answers, hi, the best form of insurance is Term Plan. It offers pure risk cover without any maturity benefits. The premium is lowest and therefore it is easy to take a higher sum assured. I wouldnt recommend any other insurance to any investor ULIPs in particular.
arun asked, your comments on investment in property
Sailesh answers, hi, I am not a real estate expert. Therfore I will not be able to give you presice advice. But based on whatever I see around me and read in newspapers, I can say with confidence that property prices are very high and they need to correct at least 30%. There is no justification for such high prices
RK asked, Can I give money to my parents and inlaws who are not woking and ask them to take invest in FDs. This way I want to do to save tax. Do I need to be careful about anything while doing this?
Sailesh answers, hi, even if you transfer the money to your parent or in-laws who in turn will invest in FDs, the interest earned on FDs will be clubbed with your income. This investmen stragey is not advisabl
Saurabh asked, i have 2 lakhs cash. where should i invest? i have absolutely no idea.. i want a return of 20% atleast
Sailesh answers, hi, if you are looking at returns of 20% p.a. then the only option open for you is equities. But are you willing to take the risk associated with investments in equities. Stocks can go down 20% on single day. Do you have the appetite for such risk. If yes, the equities are ideal for you. Also your investment horizon should be atleast 5 years. I would further advise you to reduce your return expecation from 20% to 12% p.a. This way you will have fewer ocassions to be disappointed.
Hiru asked, My objective is capital generation for retirement after 15 years. Do you suggest investing in Mid Cap funds too or Mid Cap should be avoided? I already have SIPs in HDFC Top 200, HDFC Equity, Reliance Regular Saving Fund.
Sailesh answers, hi, midcaps have the potential to grow faster compared to large caps. From that perspctive you should have midcap funds/stocks in your portfolio. Most equity funds have the mandate to invest in stocks across the market cap. Therefore there is no need to invest in a dedicated midcap fund. If at all you would like to invest in a midcap fund, the allocation should be capped at 15% of the total equity fund portfolio. Your current portfolio has exposure to midcap stocks.
Sailesh answers, hi, I like all your funds with the exception of Reliance Pharma Fund. this is a sectoral fund. Sector funds do well only when the underlying sector does well. In that case your fund will either overperform or underperform a diversified equity fund that has the mandate to invest across sectors.
deena asked, I want to save for my child's education(Kepping in mind MBBS). My kid is 2 now. WHich all mutual funds should I go for? Should I take some traditional child education plans or euaity linked ones?
Sailesh answers, hi, first of all I would not suggest any insurance plan for your child's education. You basically need to build an education fund that will take care of your child's future expenditure on education. to build this fund you should first know how much corpus you will need. Based on that you can decide whether to invest in equiy funds or Bank FD. Given your investment horizon of 15-18 years, you need to invest predominantly into diverisified equity funds. You may start SIPs in the funds recommended by me at the start of this chat.
Sailesh answers, hi, I would recommend a complete overhaul of your portfolio. reinvst the money into the funds recommended by me at the start of this chat.
Andy asked, Sailesh, What is the feasibility of selling gold, once bought?
Sailesh answers, hi, I treat gold more like an insurance in a portfolio. Therefore I usually dont recommend selling gold to make any trading gains out of it.
ryanwood asked, Dear Sir, could you advice on any good short term investment plans which fair returns
Sailesh answers, hi, if short term means less than 2 years then you can consider investing into short term income funds. these funds do well when the interest rates have peaked and are likely to come down. Our economy is passing through this phase currently. It will be an ideal opportunity for all those investors who are looking at returns from short term funds in excess of rate of interest offered by banks
rahulec040 asked, sir suggest the best mutual fund for lets say period of 2 3 years
Sailesh answers, hi, the best mutual fund for 2-3 years is MIP. Monthly Income Plans (MIPs) are essentially debt mutual funds. These funds typically invest 20%-25% of the corpus in equity related instruments like stocks. The balance 75%-80% is invested in relatively more safe instruments like corporate bonds, government securities, treasury bills and money market instruments. MIPs are structured to deliver higher return than a bank FD. However, it should be kept in mind that MIPs are market linked instruments. Therefore the returns are not assured. These investment products are suitable for investors who are willing to take some risk and have an investment horizon of 18-24 months. MIPs are more tax efficient compared to bank FDs. Interest from bank FDs are taxed as 'income from other sources' and clubbed with the total income. The appreciation in the value of MIPs is treated as capital gains. Long term capital gains from MIPs (units held for more than a year from the date of investment) are allowed the benefit of indexation and therefore subject to concessional rates which is 10% without indexation or 20% with indexation, whichever is less.
prakash asked, Sir, i am invested Birla frontline equity fund last 38 months. Now I am hold or sell Pls. suggest thank you
Sailesh answers, hi, this fund has been among the consistent performers. If you dont need the money then you can book your profits. you should book your profit also when your actual return is higher than the expected return.
Satish asked, I've purchased Principal Personal Tax Saver Fund (Rs. 25000) 4 years back. Now it is 11000. Should I sell or hold back?
Sailesh answers, hi, I recommend Fidelity Tax Advantage Fund over Principal Tax Saver. Accordingly you can red eem your current investment and reinvest in the suggested fund.
JK asked, I have recently started investing in Equity and my plan is to invest 15K pm. Which stocks would you recommend as I planning long term investment.
Sailesh answers, hi, if you are beginner as far as equity investing is concerned, you should avoid investing directly into stocks. You should rather concentrate on building your equity fund portfolio through a monthly SIP of Rs 15k
shivkumar asked, plz tell some good investment options for child education and marriage duration 20 years
Sailesh answers, hi, you can consider investing in the funds recommended at the start of this chat. Besides, you can even invest in Fidelity India Children fund - Education and Marriage Plan
Sailesh answers, hi, you can increase your share of contribution to PF. your HR / Accounts department would be in a better position to suggest the maximum contribution you can do towards PF.
rak asked, in current market scenerio sip in MF is good or SIP in gold is advisable
Sailesh answers, hi, in the current market scenario or otherwise SIP in Equity funds and Gold is desirable
Mihir asked, Hi im from mumbai wanted to knw few things in order to plan for future what percentage of income should a salaried person aged 35 shld save for his retirement
Sailesh answers, hi, there is no fixed rule. But it is a thumb rule that you should save at least 40% of your take home salary. This is indicative of your lifestyle
Sailesh says,  We have run completely out of time. I thank you all for participating in this chat. If you have any questions which were not answered during the chat, please mail them to me at

Get Rediff News in your Inbox:

Moneywiz Live!