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How to invest smartly before Budget

February 17, 2011 17:31 IST
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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, Hi, good evening and welcome to this chat session

red asked, shailesh, wats ur views on property market at present shud it b bought, since its heard frm long that it will slash but still its not goin down much?
Sailesh answers,  at 2011-02-17 15:57:14Hi, I do read reports that real estate deals have started to dry up, sales are dwindling. But there has been no major impact on the price. I would still not recommend investment in real estate or infrastructure sector.
vpmahale123 asked, how about share market option bfore budget.... which stock to enter to maximise gains
Sailesh answers, Hi, I know budget is round the corner. History suggests that stock markets have one big rally before the d-day. After the sharp correction witnessed over the past few weeks, markets have been on an upward move for the past five days. I don't if its the pre-budget rally or something else. Investors are often lured by the budget expectations and defer their investment decisions till budget. In my view this is not the prudent way of planning one's investments. In my view investors should always invest keeping in mind their investment objective, risk appetite and investment horizon. These factors remain constant and do not change because of budget. I would like to advise my investor friends to go ahead with their investment planning and not wait for the budget. If you are long term investor, go ahead and invest in equity markets. I would recommend investments in diversified equity funds rather investing directly into stocks.
KRITIN asked, for retired sr citizen which investment is better scss or bank fd at present situation
Sailesh answers, hi, 9% Senior Citizens Savings Scheme pays quarterly interest which is not the case with most bank FDs. In my view you should invest your money equally between bank FD and SCSS.
raj asked, I am at the age of 31 with an income of 80,000 per month . I have invested in PPF, the pension scheme 10,000 per annum and sbi magnum tax gain 20,000 per annum and i am single Kindly suggest some investment options
Sailesh answers, hi, since you are young, you need to start investing in equity funds to meet your long term goals like reitrement. your asset allocation should be tilted towards equity followed by gold and debt. I would not recommend any insurance plan as an alternative to investment. If you want to protect your life then Term plan is the best.
sudhindra asked, Sailesh can u tell HDFC savings assurance Plan is good for long term safe investment
Sailesh answers, hi, I have read about this plan and would not recommend to it to investors. this is a plan lauched by HDFC Banks and is a mix of insurance and RD. I would prefer to keep my insurance and investment separate
KAUSHIK asked, Sir,,i have investment in HDFC TOP 200,,UTI Mastershare,,SBI COntra Magnum,,DSP BR Equity ,HDFC PRUDENCE FUND,, camnara robeco income fund,,Please advise me should i hold my investment or opt out
Sailesh answers, hi, overall a good portfolio. Continue to hold your funds.
water asked, Hi, I am 33 years, my monthly income is 32000/-. I have existing loan of Rs. 13000/- (housing loan). Besides this I am also investing in HDFC top 200 via SIP 1000. Kindly suggest should I have more exposure to investmeent. and what could be a suitable for my profile
Sailesh answers, hi, if you can increase your SIP in equity funds, nothing like it. SIPS will go a long way in building wealth for you. Also prepay your loan as and whwen you get an opportunity.
Bala asked, This is Bala 29.My portfolio Reliance Growth 4000/-, HDFC Taxsaver 5000/-, GOLDETF 2000/-, Bank RD 4000/-. Is it good? Also from April I thought of starting fresh investment in HDFCTop200 of 2000. Please advise is it good or any better fund where i can invest for long term?
Sailesh answers, hi, overall a balanced approach. You need to add few more equity funds to your portfolio. Consider funds like Fidelity Equity and Franklin India Bluechip Fund to diversify your portfolio.
praveen asked, I have shifted my investment to some blue chips in equities and balanced funds from sectoral funds due to the racent uncertainties in our economy.Is it a good strategy/
Sailesh answers, hi, it is always a good strategy to invest in diviersified equity funds and balanced funds. Sectoral funds do well only when the underlying sector performs. If you really want to make money out of sector fund your timinn into the fund and exit from the fund has to be correct. This may not be possible. therfore my advise to invest in diverisifed equity funds.
vijay asked, Can one invest over and above rS 20000 IN INFRA STRUCTURE BONDS ?
Sailesh answers, hi, yes you can invest more than Rs 20000 in an infrastructure fund.
Girija asked, I am Girija Nandan. I want to invest Rs. 25000/- now to get tax benefit. What do u suggest.
Sailesh answers, hi, if you are willing to take risk then invest in ELSS fund. I would recommend Fidelity Tax Advantage Fund. IF you want to play it safe then nothing like PPF.
tulasi asked, Hi, IS it right time to enter Future and Options
Sailesh answers, hi, I do not advise retail investor or HNI investors to trade in futures and options. These are hedging tools to be used only for hedging one's portfolio risk. Retail investors should stay away from futures and options.
kd asked, Hi, My stock portfolio is BHEL, L&T, SAIL, Reliance industries.How is the profile? When do you suggest,is the right time to get SBI shares?
Sailesh answers, hi, overall good portfolio but you will have to wait really long to get good retursn from capital goods sector.
siv asked, Can I take money from the existing ULIP (Money Plus) and reinvest rather than putting fresh money in as it is not doing well?
Sailesh answers, hi, I dont see any reason for you to book a loss in ULIP. ULIPs typically start making money from the 7th or 8th year on accounf of the heavy administratvie costs in the initial 3 years. I would advise you to stay put and continue with your premiums.
Altaf asked, Do you expect a sharp decline in the equity market after the Bugdets r out n y?
Sailesh answers, hi, markets can swing in either direction on the budget day depending upon the budget proposals. But this is a one day phenomena. One should not wory about pre or post budget. If you are long term investor then pre and post budget swings shouldnt matter to you.
sheetal asked, hi Sailesh, my portfolio is like this: 18 lakhs in equity, 4 lakhs in MF, 10 lakhs in PPF, 20 lakhs in PF, 40 lakhs in reality, 4 lakhs in gold and I have own house worth 50 lakhs. I am 41 now and I want to retire at 50 with assets worth of 5 crore. My plan is to continue investing 9 lakhs per year across equity, MF, PPF & PF. Can I reach my goal of retiring with assets worth of 5 crore by 50. Pl. advice.
Sailesh answers, hi, this is a very detailed question! pls mail it to me separately at:
Sankhadip asked, I'm at age 29/Married, income 60K pm. Investing 6K on ELSS, 3K on LIC ,17K on Home Loan per month, also have 5Lakh on equity MF. How do you foresee my investment future?
Sailesh answers, hi, prima facie looks ok to me but I am not sure if your savings are adequate to help you meet the financial goals that you have set for yourself. I would advise you to get an investment plan made for you and invest according to the same.
qwe asked, I would like to start an SIP of Rs. 5000 each per month of reliance rsf ,hdfc 200 and idfc premium equity A . Do u think it is realistic to expect total corpus of Rs. 20 lakhs after 5 years with these three MF. If not then which ones to select.
Sailesh answers, hi, if your total SIP is Rs 15,000 per month for the next 5 years, assuming your investments grow @15% p.a., you are likely to make Rs 13 lakhs. In my view more than the fund, its the amount that you invest per month that matters the most. Your choice funds is good but you need to increase your investment amount per month to Rs 23,000 to reach the goal.
Prakash asked, I have SIP in Reliance Regular Savings(rs 1500), Fidelity Equity(1000) & DSP Black rock Equity(500). Please advise me should i continue or not. Could u tell me some other funds for SIP?
Sailesh answers, hi, all good funds. you can consider funds like HDFC Top 200 and Franklin India Bluechip in your portfolio.
Harish asked, My son is 32 yrs professionaly employed & interested to invest in a Lfe Insurance with good coverage of Accidental benefit. Your advise please..??
Sailesh answers, hi, the best type of insurance is Term plan. If offers higher sum assured for lower premium. you should advise your son to take a risk cover of atleast Rs 50 lakhs to start with.
mahesh.1712 asked, I am 51 years old with a monthlyincome of Rs.60,000. I have VPF investment of Rs.12000 p.m., PPF 70000 per year. I have a share portolio of Rs.9 lakhs and equity mf of Rs.5.5 lacs, besides some amt in FDs. Can you suggest further improvement in my portfolio
Sailesh answers, hi, i presume that you are looking forward to building your retirement corpus that ensures a comfortable post retirement life. Prima facie your portfolio needs to be linked to your objective. There is definitely scope for improvement but it all depands upon what is the corpus you are planning to build by the time you retire.
kalyan asked, Hello Sailesh.. I am 27 years old and earn around 36K net salary per month. I have not yet made any decent investment. i have been working from last 4 years. For the sake of tax benefit i had opened PPF account last year and have deposited 70K and 30K in 2 years. Apart from that i have taken 2 LIC money back policies with premium of 32K per year. Where should i put my money.
Sailesh answers, hi, you should start SIPs in diversified equity funds immediately. you should deem yourself lucky to have time on your side to plan for your long term goals like retirement. SIPs in equity funds is the way to build your wealth. Start NOW!
rayan asked, is the L&T infrastructure bond a good investment what is the returns i can expect
Sailesh answers, hi, yes, L&T Infrastructure Bond is a good investment proposition. It offers interest @8.5% p.a. Considering your tax savings, this is definitely a good invesment proposition.
tom asked, can you suggest any suitable child plan for my son.he is one year old
Sailesh answers, hi, since you are planning to build a sizeable corpus for your son to meet the expenditure on education and marriage, you should start with SIPs in 4-5 well manage diversified equity funds. you can consider funds like HDFC Top 200 and Fidelity Equity Fund to start with. Please dont buy any insurance plan for your child. Insurance needs to be taken by the working parent and not the dependent child.
Sailesh answers, hi, I can recommend two funds - HDFC Top 200 Fund and Fidelity Equity Fund. Start your SIP today!
ankush asked, Hello Shailesh, I am Ankush-31,I want to retire at the age of 52 with a corpus of 6 crore.Atpresent I am investing 20k to 25k permonth,from last 1 yr in various mutual fundl DSPBR Small&midcap,Sundaram Select mid,Birla mid,IDFC pre eq.PlanA,hdfc tOP-200,fIDELITY EQUITY,DSPBTOP100,hdfc PRUDENCE,cANARA bALANCE,Franklin bluechip,HDFC eQUITY,Quantum large cap.Please consider return at 10% for calculation.Will i reach my goal of 6 crore with this Other than this I have ULIP policy of where Iam investing 4000/PM icici lifetime. Also I am investing in PPF MAX LIMIT from last 4 years. Also invested in Gold.Not invested in real estate.You can suggest. Regards -Ankush.
Sailesh answers, hi, requesting you to mail me your query at:
fg asked, I'm 30 unmarried, income 21 K, Investing thru SIP in Hdfc top 200, Reliance Regular Saving, UTI oportunity, SBI Magnum Contra, DSP Black rock top 100, Rs. 1000/- each. also having 20 lacs term insurance for 30 yrs. RD of Rs. 65k. Please advice me for better financial planing.
Sailesh answers, hi, you are on the right path. Continue with your SIPs through the market cycles. Please set a goal for yourself and invest accordingly. Then you will be able to manage your portfolio more effectively.
Rajat asked, Hello Sir, I want t invest 2 lacs, but a fear about market is in my mind, I have already loose 50,000/- (appx.) in last 3 years in market. Kindly advise what should i do
Sailesh answers, hi, you have not mentioned if the loss was in stocks or equity funds. I would encourage you to invest in well managed diversified equity funds like HDFc Top 200 and Fidelity Equity funds to name few. Invest via the SIP route. Invest for the long term. Please review your portfolio once every 6 months with the help of an investment advisor. I am sure you will build wealth over the long term
helpme asked, If i have no experience in the stock market and want to start off... where do i go for trusted advice and how do i start off safely..
Sailesh answers, hi, since you are beginner, I would recommend diversified equity funds for you. Start small, start SIPs in well manage funds. Start with funds like HDFC Top 200 and Fidelity Equity Fund. Continue with SIP through the up and the down cycle of the market. Markets are very volatile but you should not get unduly perturbed.
dsd asked, Hi Sailesh, is to good to invest in reliance gold SIP.
Sailesh answers, hi, as far as investment in gold is concerned, I am of the view that every investor should allocated 10% of his portfolio to gold. When it comes to gold, it is better to invest in Gold ETf rather than buying physical gold. Coming to the NFO of Reliance Gold Saving Fund, I would not recommend it to investors. I would rather advise them to buy the Gold ETF directly.
ASH asked, Hi, What is the best option for a man aged 75 Yrs to utilise his 80 CC limit of 1 Lach?
Sailesh answers, hi, given your age you should be investing more in PPF and NSC and less in ELSS. Buying an inurance plan is out of question.
sdtaware asked, Please suggest best investement plan for short term investment
Sailesh answers, hi, if your invesment objectvie is protection of capital, then Bank FDs are the best. you can even consider short term income funds but please be informed that these funds do not offer assured returns. The returns are market linked and thefore fluctuate.
helpme asked, Hi Sailesh, I have to invest around 70K for tax savings... Please advise me how do i go about it... should i put it fully into PPF or probably divide into other avenues...
Sailesh answers, hi, you have not given your age. I would prefer to divide the amount equally between ELSS and PPF
Badri asked, Pl. suggest the best ELSS with max 3 years horizon for Rs.1 lakh 80CCC exemption
Sailesh answers, hi, Frankin India Taxshield and Fidelity Tax Advantage Fund.
loser asked, Hi, Pl suggest a good FMP for 12-15 months tenor
Sailesh answers, hi, there is one from Fidelity that opens on 24th february. This is only for a day.
MATHEWPHILIP asked, I want to purchase my second home for income tax benefits. It is the right time for that?.
Sailesh answers, hi, in my view it is not a good idea to buy a second home on loan only because you get tax benefit. If there is a genuined need to buy a house then there is no arguement. But dont take a liability on your head for the next 10-15 years simply to save tax. Imagine you will be working hard only to pay your EMIs and in the bargain making your bank richer with sky high interest rates.
VARSHA asked, hello 30 married with 5 yr son income 28k monthly. please suggest how to invest money I only investement in 2 LIC 30 k yearly, PPF 12k, PF 4k, some amt in shares please sugesst more and also short term investment
Sailesh answers, hi, start SIPs in diversified equity funds. I have answered a similar question in this chat. Please refer to that.
Sailesh says, We have run completely out of time. I thank you all for participating in this chat session. If you have any questions which were not answered during the chat, you can mail them to me at: I would request you to mention your age, investment objectives and willingness to take risk in the mail. This will help me in understanding your profile and determining the asset allocation for your investments.

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