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Home > India > Business > Business Headline > Personal Finance

Safe investment? Hold 5% of assets in gold

April 11, 2008 08:47 IST
Last Updated: April 11, 2008 11:31 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?

To get answers to your queries, speak to mutual fund expert Rahul Goel.

Rahul Goel says, Good afternoon! Welcome to the discussion on financial planning! Let's start!
Raman asked, Hi Gd Afternoon, Is it really safe to invest in mutual funds at this point of time? Pl give 2 or 3 best mutual funds. Thank you.
Rahul Goel answers,  at 2008-04-10 12:46:53raman, hi. you are probably referring to equity funds here. well, since the underlying of an equity fund is equities, there is bound to be high risk associated with the investment. yes, you can try and minimise the risk by investing at valuations which are attractive, but even then you can never be sure. so, if you are looking at investing for a 3-yr tenure, and are ready to take on the risk of near term losses, then you should surely consider investing in funds like hdfc top 200. pl note that you should always invest in line with your planned asset allocation. a disciplined investor has a much better chance of achieving the desired results.
yd asked, Considering current senario is it good to invest lumpsum or to invest in SIPS?
Rahul Goel answers, hi. this again depends on various factors. lets say you as part of your asset allocation you were meant to invest rs 100 in equities; you have already invested rs 90. then the rs 10 can be put in now; but if you have a large chunk yet to be inevsted, then its best to spread it over six months. there can be an exception where an investor understands that the valuations are attractive now, and he really does not care about near term losses... in such instances even a lump sum investment will make sense. so in short, the answer will vary.

jitendra asked, Good afternoon sir. I have sundaram select mid cap for more than 2 years. shall i continue to hold it or swith over to some other scheme of sundram. if so please let me know one scheme. and also i have two SIP in amounting to Rs.3000 in HDFC [Get Quote] Growth (Rs.2000) and Rs.1000 (JM Emerging fund). whether these two funds are good funds for long term say 2/3 years
Rahul Goel answers, jitendra, hi. sundaram select midcap in our view is a very good scheme to own; but the allocation to the same should be very low. overall midcaps should not account for more than 5 - 10% of a portfolio. with regards to the other two schemes you have mentioned, well we do not recommend any. you may want to read our recent research note on JM funds on (free to access).

RG asked, Sir, The mrkt seems too bad at present. How long do U think it wud take to stabilise??
Rahul Goel answers, hi. the market seems bad at 15,000. it seemed very good at 21,000! well, that's what sentiment is all about!! i think you should look at valuations as against the index number. when will it stabilise? frankly, we have no view on short term movements in the stock markets; we do not understand such movements and hence are unable to comment on them.

sireesh asked, Hi Rahul, I am an investor with medium risk attitude. I had taken 2 LIC [Get Quote] policies with 25k annual premiums each for 25 years. I had also invested in couple of ELSS schemes like HDFC tax saver,Franklin India prima plus. Hearing everwhere like investing 50k in LIC returns low yields considering inflation in the long run.Everyone is suggesting to take SIP for mutual funds. At the same time mutual funds are also sometimes risky right even in the long run in few cases? what do u suggest. Is is advisable to contine investing in LIC premiums 50k for 25 years?
Rahul Goel answers, sireesh, hi. i can guide you on this only after i know which policies you have invested in. some policies of LIC actually deliver very attractive returns.

vc asked, hi i am 42 yrs and have saved 60 lacs in the ratio of 80 debt and 20 eq is this ok : pl reply
Rahul Goel answers, hi. no formula or thumb rule can alone help you zero in on an ideal asset allocation for you. there is a lot more that is required. if you can provide me with more detailed information about you, i will be in a better position to guide you.

manoj asked, Is it safe to invest in a mutual fund for a period of 3 to 4 years as long term investment, concerning the factors happened in stock market from two months? If it is safe and apt then what will be the percentage of growth of these funds in an average?
Rahul Goel answers, manoj, hi. we infact find the present valuation level in the stock market attractive. we do not know if the markets will fall further. if they do, then it will be an even more attractive buying opportunity. but since we cannot time the bottom, and we find valuations to be attractive now, we are recommending to our clients to invest in the stock markets, but in line with their asset allocation. we expect returns to be about 15% compounded per annum over the next 3 - 5 yrs.

Kishore asked, I would like to know which funds or funds you would suggest for a long term say 15yrs for good returns and what would be approx interest we can expect
Rahul Goel answers, kishore, hi. we think over the next several years, a 15% return is a realistic estimate. and in terms of funds... well, if you are looking at equity, then funds like hdfc top 200 should be in the portfolio.

Ahmad asked, Hello rahul: Considering the current volatility in market, is it safe to invest 1 lakh in mutual funds or shall I wait for some time. I have moderate to high risk appetite and wish to invest for long term (at least 2-3 years). Please suggest some funds and advise how should I split the 1 lakh among them? thanks
Rahul Goel answers, ahmad, hi. i have discussed this in an earlier response. pl refer to the same.

Abhik asked, Hi,i need to invest around 5000 INR per month in Mutual funds apart from ELSS. can you suggest a few good large cap oriented funds and also suggets a few mid-cap funds for consideration later.
Rahul Goel answers, abhik, hi. why large cap and mid cap funds? why not the simple equity diversified funds??!

rasik asked, mutual fund concept is new for me can u please explain the benefit and drawback of the same
Rahul Goel answers, rasik, hi. one way to learn about funds is to simply read the money simplified... its a free guide which is available on

Ravi asked, Hi, I have the funds HDFC Growth, Magnam Contra, Reliance Growth, DSP ML Tiger and Franklin Prima Plus in my portfolio. Please suggest any changes, if required to this portfolio
Rahul Goel answers, ravi, hi. you appear to be an investor with a high risk appetite and an investment tenure of atleast 3 yrs. in terms of the funds, well, our ideal portfolio for our profile like yours, would be very different... not a single fund you own would make it to our list. you need to dicuss your portfolio characteristics with your agent.. understand where you are invested and whether it suits you.

venkat asked, HI I am in investing in SBI [Get Quote] Blue Chip Growth fund since year ,It is mostly around 12.50 NAV ,Is it a Good fund to continue
Rahul Goel answers, venkat, hi. we do not recommend this fund to our clients.

gupta asked, Hi Rahul, I have invested 20,000 in Rel Diversified Power Fund and 20,000 in TATA infra fund. When sensex was at 15K. What is your idea of returns I can get in 3 yr period?
Rahul Goel answers, hi. you have your money in two funds, both of which are thematic. in our view, to be able to make money from such funds, you need to time your exit very well. but then, timing the markets is next to impossible. suggest you opt for diversified funds instead.

Jak asked, Hi, I am Planing to invest 5Lac in UTI Gold fund. Need your sugestion. otherwise suggest me some good funds to invest
Rahul Goel answers, hi. are you investing in line with a planned asset allocation?

abhay_123 asked, Hi Rahul, this is Abhay, I am interested in invest money in mutual funds, can u give some good mutual funds. I am looking to invest arround 10k every month
Rahul Goel answers, abhay, hi. for me to be able to recommend some funds, i need to understand more about you. why don't you send us your details and we will revert to you.

Dev asked, Hi Good afternoon, I want to invest in the mutual funds and in shares.please let me know where i can get maximum profit.
Rahul Goel answers, dev, hi. investing in shares or mutual funds is a decision which all of us have to make. we have recently put out a note on the same... pl visit personalfn and read the same.

yd asked, Hi Rahul, have invested in Reliance Growth fund and Kotak opportunity fund through SIP. was it a good dicision?
Rahul Goel answers, hi. we do not have any view on reliance funds. with regards to kotak opportunity, we do not recommend the same to our clients. we prefer dsp ml opportuntiy.

Harsha asked, how about investing in Reliance Natural Resources [Get Quote] MF
Rahul Goel answers, harsha, hi. we have no view on reliance funds. however, we do not recommend to any thematic/sectoral fund to any of our investors.

krishnan asked, Hi Goel, I have invstd. close to 1.2 lacs on Mutual funds out of which 6k is on SIP.the present value of these funds is 1.15Lacs. Its been there in invstmnt. mode since a year.Should i continue the SIP and park my money OR should i back off??
Rahul Goel answers, krishnan, hi. well, assuming you have the right schemes and allocation, this is not the time to back off!! its probably time to invest!

kunal asked, Hi, I am currently investing Rs 1000 SIP each in JM emerging, Reliance regular saving, & Rs 500 in Magnum comma. Should i continue in these as mkt is down? I am planning to invest some amount in DSPML World gold fund, hows it as compared other Gold ETF's. Also I hav invested Rs 5000 each in sunderam Taxsaver & Birla Taxrelief 96 in last yr. For this yr also should i invest in them. Thanks
Rahul Goel answers, kunal, hi. we do not have a view on reliance. the other two funds which you own are not in our recommended list. so, i guess, you need to take a re-look at your portfolio. with regards to gold... if you have to buy "gold" then best is to buy gold in ETF or physical form... the dsp fund invests in companies which are in gold mining etc. that brings with it additional risks.

Ram asked, Ram from Singapore, Is it right time to invest in India based mutual funds?
Rahul Goel answers, ram, hi. we believe that this is a good time to invest in well managed equity funds. i have given a more detailed response to an earlier such query. pl see.

Dev asked, Hi Rahul, is it better to invest in new mutual funds rather than old mututal funds.
Rahul Goel answers, dev, hi. in nearly all instances, nfos are simply marketing initiatives aimed at mobilising assets for the mutual fund. they have little or nothing to offer to the investor. funds with track records are a much better bet.

Bharath asked, Hi I have planned to invest 1 Lac for 1 year in DSP ML Gold Fund. My advisor says you will get 20% min return. How true it is and what abt the safety?
Rahul Goel answers, bharath, hi. i think you should report the advisor to SEBI for misleading you. if ever someone tells you that this is the minimum you will make in such short tenures, you need to tread very carefully.

yourhealth asked, Hello Rahul . I withdrew Rs. 7 lakh from my PPF and invested in various mutual funds when market was ranging from 18000 to 20400. Now what should I do ?
Rahul Goel answers, hi. any reason you moved money from debt to equity? what was the rationale for the same? what is your tenure of investment? which schemes are you invested in? need to know all this to be able to give you some meaningful response.

Vajha Srinivas asked, Hi Rahul, I had started investing Rs.7000 in SIP's from Jan-07. Uptill Jan-08 I earned a return of 20% average across 4 equity funds. Suddenly there is a 20% drop and as on date my portfolio has 20% negative return. Considering this I am confused as to whether I should continue investing in Mutual funds. If so can you suggest some good equity based funds for an investment period of 5+years
Rahul Goel answers, hi. the fact that the markets have fallen, should not surprise you. also, you shouldl not expect to make a return over a 12 month period from equity funds. you need to be invested for atleast 3 yrs. so, if the funds you own are well managed, then you should continue the SIPs. but pl ensure that you are investing in line with the desired asset allocation for you.

Abhishek asked, Hi i want to invent Rs 500000 in MF for a time period of 6-8 monthsand in december - january 2009, i will switch to tax saving ELSS.please suggest whether its right time or not
Rahul Goel answers, abhishek, hi. for a tenure of 6 - 8 months, FMPs and other short term detbt funds are best.

Lion asked, In the current scenario, how good are the Fixed Maturity Plans ?
Rahul Goel answers, hi. if you have money to be invested for a tenure of less than 12/13 months, then FMPs are a great alternative.

Kiran asked, Good Afternoon Manoj, I am 31 single, will be marrying this year. I am investing in endowment,whole life Insurance and PF covering the full bracket of 80C. I have insurance coverage for 20Lakhs. Apart from these 80C invetments I don't have any other investments and planning to invest. I can invest upto 12000 PM in Equities. Please suggest me in what mutual funds should I invest, and SIP amount for each fund. I can invest for 3 to 5 years and can leave the investments for long term. I am having surplus of 6 lakhs with Bank FDs and planning to buy Car and House in a years time.
Rahul Goel answers, kiran, hi. you seem to have planned well. the monies can go into a portfolio of schemes including hdfc top 200 and dsp ml opp. i suggest that the final portfolio and allocation be done in consultation with your financial planner.

Investo asked, Hi Rahul ... what do you think about gold price rise? Is it wise to invest in gold at this time? Would the gold prices rise further over the next couple of months?
Rahul Goel answers, hi. we recommend to all our clients at Personalfn that they have 5% of their assets in gold. having said that we believe the prospects for gold from a long term perspective are attractive. pl read more on gold here -

suvajit asked, hi, is it better to invest in sector specific fund like power, infrastucture for a period 0f 3-4 yrs.which sector u i going to get tax benefit out of that?
Rahul Goel answers, suvajit, hi. in our view, investors should avoid such funds. yes, some can take exposure to dedicated midcap funds, but that allocation should not exceed 5 - 10% of the portfolio.

akhil asked, I invested in SBI contra,Franklin Bluechip, DSP Meryilich Tiger one month back when Sensex was 18500 but now the scenerio change suddenly now sensex from last one week between 15k to 16lk i already lost 7 percent of my total money in last one month wat should i do withdraw my money from MF or hold and wait for the better time
Rahul Goel answers, akhil, hi. when you put in money, you should have been guided that in equities, volatility is given. and that one should expect to earn a return only over a 3 - 5 yr time frame. so, hang on there. but i must say that your selection of funds could have been a lot better.

Malini asked, Rahul Hi, I am 47 years of age and my husband is 50. We have saved around Rs.60 lakhs in various schemes. MF's works out to 6 L and equity 7 L. Rest are in govt. invt, ppf etc. We also have a 2 BHK in mumbai, flat of 1 bhk in Goa and a 3500 sq.ft plot in ahmedabad. I invest around 50K every month. Due you think I should now slow down and enjoy my money, instead of continuously investing? MY SIP's are 14K per month, PO NSC 30K p.m. and balance shares, FDs etc
Rahul Goel answers, malini, hi. the question you have asked is something that is very relevant. but i am afraid i cannot answer the same without understanding more about you... if your current investments could take care of your present and future needs, then by all means you should slow down.

shiva asked, HI Rahul, I am an NRI Engineer, 35y, marrie with one child, working in Kuwait, my net savings is 30 Lakhs after all liabilities ( monthly expense. I am looking for good MFs (deiversified) for investing abt 15 Lakhs for long term. Can you please suggest few?
Rahul Goel answers, shiva, hi. given that you are at a remote destination, before investing a single rupee, be sure that you have employed the services of an honest financial planner in india. he will be able to guide you better... over a chat i am unable to ask you all that i need to know.

suman asked, do you recommend including a Index based fund in a portfolio
Rahul Goel answers, suman, hi. well, we believe that active funds, which are managed well, will outperform the index funds over time. however, for those investors, who are simply looking at earning a return inline with the markets, index funds are great!

rohan asked, rohan says, hi..good 43 yr old....where can i invest 50000 pm in mutual fund for my children education
Rahul Goel answers, rohan, hi. what are the ages of your children??

kamal asked, hi rahul, I am planning to invest in Birla Sun Life Saral Jeevan policy.Is it profitable for me to invest in this period.
Rahul Goel answers, kamal, hi. you wish to "invest" in an "insurance policy". time to re-think!

Rahul Goel answers, if you are looking at a more aggressive fund, hdfc equity would fit the bill. else opt for hdfc top 200.

Rahul Goel says, Thank you all for participating in the discussion. Do write in to with your queries and/or requests to meet a personalfn consultant.

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