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Good portfolio=15% return per year
April 28, 2008 09:32 IST
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 Friday, mutual fund expert Rahul Goel replied to many such readers' queries. Here is the transcript:
Rahul Goel says, Good afternoon! Let's start the discussion on financial planning!
QAYYUM asked, ARE SIP'S SAFE FOR INVESTMENTS AND WHICH ARE BEST SIP TO INVEST
Rahul Goel answers, at 2008-04-25 12:44:16hi. if you are doing an sip into a 'risky' asset like equity, then there is risk attached to the 'sip'. yes, what the sip does is it tends to reduce the "risk of mistiming the investment" in the fund. in short, if you are investing in an equity fund, via sip, you are still taking on risk.
ashutosh asked, should i keep sbi infrastructure fund or sell it?
Rahul Goel answers, ashutosh, hi. in our view one should not invest in sectoral/thematic funds. its best to invest in well managed diversified equity funds. if your investment profile demands that you not be invested in these very high risk funds, then you should redeem your money...
sundar asked, hello rahul, 1. which diversified funds are good - Growth funds(long term capital appreciation), opportuniy funds(actively participating as per the market conditions)? 2.When the market will be stabilized? 3.How about Kotak Opportunities, DWS Investment opportunity and Satndard Chartered Premier Equitity funds? Can i go for SIP process for these funds?
Rahul Goel answers, sundar, hi. first, none of the funds you have spoken of make it to our recommended list category. now coming to your point about growth/opportunity funds... personalfn recommends to clients to build portfolios of funds which have funds which follow different styles... this brings in an element of diversification in the portfolio. you should have money in growth for instance; also in value style funds. in case of opportunity funds you need to be careful... but there are one/two good funds out there. the allocation between these different styles will depend on your risk profile and return expectation.
Dheeraj asked, Which are five best mutual funds to be selected for SIP
Rahul Goel answers, dheeraj, hi. you should consider funds like hdfc equity or hdfc top 200 which are basically growth oriented funds. if you are looking at value style funds, consider quantum long term equity fund (disclosure - both personalfn and quantum mutual fund are founded by Ajit Dayal).
sujoy asked, what can be the average returns from mutual funds on half yearly basis for an invested amount of Rs. 1 lac?
Rahul Goel answers, sujoy, hi. if you are investing in equity funds, then predicting short term returns is impossible as far as we are concerned. over 3 - 5 yrs though we think a well managed portfolio can deliver a 15% pa return.
Premnath asked, Hi, If you are in abroad for longer term, is it still better to manage investments in India or invest in abroad? If the intention is to come back to India after 4-5 years
Rahul Goel answers, premnath, hi. if you are relocate to india, then you shoudl have a large chunk of your assets in india... the reason being that you do not want to take an unnecessary currency risk. if you are in the US, then you already know how much impact can adverse currency movements have on your wealth...
PRAMOD asked, I HAVING 3 LAC RS IN FIXED DEPOSIT CAN I TRANSFER MY MONEY IN MUTUAL FUND FOR LONG TERM INVESMENT AND IT IS PROFITABILTY OR NOT
Rahul Goel answers, pramod, hi. you are asking to transfer safe, secure, fixed income money into equity money which is risky with uncertain returns. well, if you know that this has an asset allocation change implication, then go ahead. remember, well managed equity funds too should be expected to deliver over a 3 - 5 yr timeframe only.
prakash asked, What is your anticipated returns from a diversified equity MF like HDFC [Get Quote] growth for this FY. Are you think they will stick on negative returns?
Rahul Goel answers, prakash, hi. its very difficult to say how the returns will be over the next one year. but what we can say is that we find valuations selectively reasonable and are recommending to our investors that they should invest money... but they should remain in line with their asset allocation. also, please note that when you are investing in equities, you should always be prepared for near term negative returns.
sumit asked, Tell me about Tata infrastructure fund
Rahul Goel answers, sumit, hi. we do not recommend any infra fund, or any other sector fund to our clients at Personalfn.
ravie asked, Hi Rahul, is the stock market stable, to have it say to get ahead with investing money in mutual funds...
Rahul Goel answers, hi, we will know whether it was stable only in hindsight... if your asset allocation demands that you need to be invested, go ahead and invest some money; do an sip. be sure to select the funds best suited to you.
indrajit asked, I have home loan of Rs 16 Lakh with 15 years to payback. Is it good option to pay back as early as possible or to invest the same money in MF or share ?
Rahul Goel answers, indrajit, hi. the answer really depends on whether you are comfortable with keeping a liability on your books. if you are not, then no matter what the trade off, you should pay back the loan.
majumderjayanta asked, Hi Rahul Sir,I want invest 3 Lac ata time and to get a comperatively good return for a longer period of 10 years what will the best financial tool, Please advice.
Rahul Goel answers, hi, i would recommend you invest the money in a basket of well managed equity funds. i am assuming you already have some investments in debt (Ppf/epf) and property... if not then there possibly could be a change in allocation.
mehta asked, if market is down , what are the best ways to invest your money
Rahul Goel answers, hi. like warren buffet said... you should buy when others are selling, and sell, when others are buying. now you know what to do!
anand asked, hi rahul am anand frm bangalore..i have rs 5 laks in fixed deposit...which stock is safe to invest now
Rahul Goel answers, anand, hi. stocks by definition are not "safe" investments. suggest that before you invest a single rupee, you consult a financial planner. if you want personalfn to guide you, pl write to us at email@example.com with your contact details.
Nisha asked, I started SIP of magnum contra,kotak opporutuny, Sundaram select focus.this is good portfoilo or should i change or add more.i m looking for 5yr investment term
Rahul Goel answers, nisha, hi. we do not recommend any of these funds to our clients... you need to build the right portfolio of funds for you. time for an overhaul, if you will.
Prasad asked, Hi Rahul, My Mutual Fund portfolio is like this: DSP-ML Opportunities - RP (G): 5000,DSP-ML World Gold fund: 5000,Franklin High Growth Cos (G)- SIP RS5000 monthly since Feb-08, Franklin India Oppor. (G) -SIP RS5000 monthly since Dec 07, HDFC Growth Fund: RS5000,ICICI [Get Quote] PRU Infrastructure(G): RS10000,ICICI PRU Infrastructure(D): RS40000, J M basic Fund: RS10000, Reliance Diver.Power -RP (G)- Rs5000, SBI [Get Quote] Magnum Comma Fund(G) : RS5000, SBI Magnum Tax gain (G): RS 4000, Reliance natural Resources [Get Quote] (NFO): RS 25000, TATA Infrastructure(D): RS25000, UTI Infrastructure Advantage Fund (NFO): RS 10,000. Equity Wise my portfolio is as below: GMR Infra: 100 nos @ 170, Guj NRE Coke: 500 nos @ 114, Hindustan Contruction: 50 nos @151, Reliance Communication: 75 Nos@ 501.61, Reliance natural resources: 150 Nos @ 145.55, Indowind Energy: 250 @ 81.53 Any Suggestion on my portfolio...
Rahul Goel answers, prasad, hi. there are simply too many funds. and that too a lot of them are sectoral in nature. pl read my response to a question on the kind of fund portfolio one should have.
abhis asked, Hi, which is best option? dividend or growth for ELSS ??
Rahul Goel answers, if you do not need any interim cashflow, growth is the best option... compound your money.
prem asked, Hello Rahul, if you are in abroad and planning to stay there for a period of 4-5 years, would you recommend to manage investments in India or its better to invest funds in abroad?
Rahul Goel answers, hi. what you should know is where you are going to be spending the money you are saving now... if its in india, then have most of the money in india. if its in some other currency, then try and save in that currency. the reason for suggesting this is that it takes away the currency risk, which most investors do not understand.
Manish asked, Hi I am new to the Investment Market, Please guide through where to invest so that risk is mim and profit is also their.
Rahul Goel answers, manish, hi. since you are new, please start with reading the money simplified on personalfn - www.personalfn.com. its a free guide that we publish.
karthick asked, Hi Rahul, I have invested in Reliance natural resources fund...Is this a good fund?
Rahul Goel answers, hi. we do not have a view on reliance funds. having said that, we do not recommend sectoral/thematic funds to most of our clients. clients with risk appetite may take a very small exposure to a mid cap fund though.
rAGHU asked, Should I invest im MF for shorter period like 1 year
Rahul Goel answers, raghu, hi. sure you can invest... in short term debt funds though.
TANEJA asked, I HAVE NEVER INVESTED IN MUTUAL FUND,PL SUGGEST WHICH IS BEST TO INVEST
Rahul Goel answers, hi. i suggest you start with reading the money simplified... you can get free copies here - www.personalfn.com
Ketan asked, Hi. If I do not need a regular return right now but need one after ten years, should I skip MIPs outright and opt for diversified equity growth plans?
Rahul Goel answers, ketan, hi. yes, that is the right thing to do. but ensure your overall allocation does have some debt...
Bobby asked, Rahul please advice about BIRLA DREAM PLAN
Rahul Goel answers, bobby, hi. is this a ULIP?? if it is, then before committing funds, be sure you understand the cost structure.
rravi2009 asked, I'll be getting 10L next month. which are the best assets to buy given the present market conditions? I'm 37 years old and am risk averse. The investment horizon is 5 to 10 years.
Rahul Goel answers, ravi, hi. well, if you have appetite for near term risk, a chunk of that money should go into stocks/equity funds. but before you commit monies, be sure to evaluate your overall asset allocation.
Dee asked, Hi, I have been investing Rs. 30,000 in ICICI Prudential Growth Fund (Maximiser) for the past 3 yrs. As on today, the total value stands at Rs. 92,256/- showing a profit of only 2,256. Do you advise me to continue with this or should I switch over to any other fund? 1 have a 9-month old daughter and want to make a sound investment for her future. Kindly advise & recommend few good funds.
Rahul Goel answers, hi. this is probably a ULIP... the return you see is low because of the initial expenses of a ULIP, which you should have known at the time of investing. if you are investing for your daughter, invest in equity funds; and for the bread winner in your family, take term insurance.
Piu asked, Is gold considered as an investment or should be kept aside as insurance?
Rahul Goel answers, hi. it seems odd but you can actually think of gold as an insurance against the uncertainties which surround other investment markets!
Piu asked, Is gold considered as an investment or should be kept aside as insurance?
Rahul Goel answers, sorry.. here's more. you should visit www.personalfn.com/gold to read more about this... gold has done very well in recent months even as stock prices have collapsed.
Suran asked, Hi there ...is it advisable to switch mutual funds portfolio, what i have right is equity based ...still the returns are sort of average
Rahul Goel answers, suran, hi. if you switch, there could be entry/exit load implications. once you have evaluated the smae, you can surely consider doing the same. next time however, before you commit any money, do a thorough due diligence on the schemes.
Vaibhav asked, Rahul, How do you think the Gold Funds will be doing in near future
Rahul Goel answers, well vaibhav, i am unable to make a near term call. but from an asset allocation perspective, since gold serves multiple purposes, it is best to have about 5% of your assets in gold.
sureshkmoorthy asked, Hi Rahul I am new of MF's. I am 38 years old drawing a monthly salary of around 1.25 lakhs. I am able to save around Rs.65k every month which is parked in FD's. My Son is around 3.5 years. I am looking for a consistent investment which grows over a period of time. I an invest Rs 30,000 every month. I am looking for a corpus of around Rs. 50 lakhs when my son attains 18 Years. Can you suggest some good investment strategy Thank you. - Suresh K
Rahul Goel answers, suresh, hi. if you were to set aside rs 30,000 pm for the next 15 yrs, you would have rs 1.8 cr. assuming you are invested in assets returning 15% pa. this money in our view can take care of the cost of college education then. this is based on assumptions. not sure whether 50 lakhs would suffice 15 yrs from now... you should read more about this on personalfn...
rosy asked, How will you rate the following schemes and their performace . I have SIP in the following schemes HDFC Equity (growth), DSP ML Equity (Growth), DSP ML (OPP Growth), Sundaram Select Midcap ( growth)) and Fedilty Equity ( growth) Should I continue the SIP or stop the same. Thanks for your advice
Rahul Goel answers, rosy, hi. this definitely seems like a well balanced portfolio. continue with your investments!
Piu asked, I am your client and in my portfolio it says we havent invested your gold as it has been kept as insurance...Im surprised you and your team think differently!
Rahul Goel answers, piu, hi. if you can write to me at firstname.lastname@example.org in more detail it will help.
Asad asked, Hi, I'm investing in Fidelity and DSPML ELSS funds. Along with them I'm also investing in Franklin FlexiCap, Reliance Vision and HDFC Equity with a SIP of Rs1000/- each. My time horizon for these funds is 3yrs. Is my choice of funds correct?
Rahul Goel answers, asad, hi. aside of reliance on which we have no view, the other funds good; however, you need to improvise on the allocation between these funds.
Rahul Goel says, Thank you all for participating in this discussion. In case you have any queries, please do send them in to email@example.com. Have a great weekend!
Chat with Rahul every Thursday at 1 pm
(Due to circumstances beyond our control, date and time of chat may change)
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