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Plan to invest in gold? Go for ETFs

November 18, 2009 15:00 IST
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Gold barsAre 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 a chat on on Wednesday, financial planning expert Sailesh Multani offered some valuable tips. Read the transcript:

Sailesh says, Goodafternoon everyone, lets start the chat session

Sailesh answers,  at 2009-11-18 12:59:53hi, the answer to your question depends on your investment horizon, risk apetite. If your investment horizon is 3 years and more then I would recommend that you invest, say 60%-70% in equity and the balance can be in debt/gold
piyush_kapoor asked, Hi, Kindly let me know if the interest generated from MIS(post office) is taxable or not? Also who is eligible for investing in this scheme. If we make a RD of the interest recieved from MIS then what?
Sailesh answers, hi, the interest on Post Office MIS is taxable. Any individual is eligible for investing in this scheme
jambu asked, Hi Sir, I am 26 and high risk capacity. Do you think I should go for a pension plan? Can you give your thoughts on how Aigon-Religare Pension fund compare with others?
Sailesh answers, hi, in my view you should build a retirement corpus that will generate regualr income for you post retirement. Pension plan is not the ideal investment instrument to take care of your post retirement needs. Since you are young you should aim at investing more (say 70%) in equity as you have time on your side which is an important factor for equity investment
Suma asked, Hi, whats the best way for me to invest rs 500 per month
Sailesh answers, hi,I do not have any information about your age, risk profile, current investment, etc. If you are young, willing to take risk and invest for more than 3-5 years then I would recommend that you start an SIP in a well managed diverisifed equity fund with a good track record of at least 5 years to show for. HDFC Top 200 Fund is among the various funds you can consider starting an SIP in.
qaq asked, Many people have burnt the fingers after taking advise of expert in investing MF perticulerly Equity MF - OPEN & CLOSE ENDED both on short term & long term scenerio both. Which is the best safest MF to invest for good guaranted return
Sailesh answers, hi, investors go through a bad experience with their investments because they do not invest in line with their investment objective, risk appetite and investment horizon. If you invest in equity then it is important that your risk apetite is high and you are willing to invest for atleast 3 years. Investing in equity for less than 3 years can prove to be disappointing. Also, it is important to research a fund before investing in them. Also check the credentials and competency of your investment advisor before entrusting your money to him
sarma asked, Hello Sir, I am Sarma here. I have 10 Lakh Rupees. My Age is 44 and working in bank as vice president. what is the better investement with low risk.
Sailesh answers, hi, by low risk i assume that you want to your equity exposure to be minimum. In my view you should consider investing in monthly income plans of mutual funds. These funds typically invest 20% of their funds in equity and balance in debt. While the debt portfolio provides the much needed stabiltiy and regualr income, equity portfolio will help in capital appreciation
Devu asked, How can I Invest in Gold
Sailesh answers, hi, the best way to invest in gold is through Gold ETFs. Gold ETFs invest directly in gold. Each unit is backed by gold. It is easy to buy and sell gold through gold ETF compared to physical gold
vijay007 asked, MY Age 25 takehome salary 25pm, i am planning to buy my own flat by 30 yrs and presently i have 3lacs in my hand.. pl suggest
Sailesh answers, hi, if you are going to use the amount of Rs 3 lakhs for buying the house then I would recommend that you allocated 70% to debt abd balance to equtiy. Also ensure that you start exiting equity atleast 2 years before the purchase of house. The suggested asset allocation is only indicative. It is best if you can consult your investment advisor for a specific investment plan in line with your risk appetite
Anish asked, Hello Sailesh, do you suggest buying gold now at this peak rate? Is there any chance of it coming down say in 1 or 2 months. Thanks.
Sailesh answers, hi, in my view every investor should have 10%-15% allocation to gold. Investors can invest at the current levels but I would recommend that they buy small quantities at a time. They can plan their purchase over 6 months period and invest 1/6th of the allocated amount every month or every dip.
navaneeth asked, Hi..i am a 23 yr old Engineer presently works in Hyderabad. I approx earn 20 grand/month.I desire to buy a flat with the support of my family. Considering my monthly expenditure & EMI's i need to shred from my salary, i would also like to invest in SIP's of small propotaions(i.e Rs 1000 Pm) Would you advise me to go ahead with this plan..!? For a long term investment, i would have generated some reasonalbe wealth!!Comments plz!!
Sailesh answers, hi, given your age you should have higher allocation to equities. Assuming purchase of house property is your priority, whatever savings you have after providing for EMIs should be channelised into equity funds via the SIPs. Given your young age, I am sure small investments in equity over next 20-25 years will definitely buid wealth for you that will take care ouf your post retirement expenses
dssd asked, I am 53. I want to retire by 58. What shall I do for next 5 years to give me steady income till I live.
Sailesh answers, hi, you need to ensure that you have sufficient investments and reitrement benefit corpus by the time you retire that will take care of your post retirement expenses. Please do not forget to factor in the inflation. I would recommend that you get a retirement plan made for yourself to ensure that your investment corpus will be sufficient to take care of your post reitrement needs. If there is likelihood of any deficit, you should start teaking corrective measures immedaitely. This will ensre that you lead a happy reitred life financially.
umesh asked, How is Sundaram Select mid cap,Sundaram SMILE, Birla SL Dividend Yield for SIP
Sailesh answers, hi, all these funds have been among the top performers at various point in time. From a portfolio perspective, you should have a large cap and a midcap fund in your portfolio. Also try and restrict yourexposure to midcap fund to not more than 15%.
rohit asked, hi sir, I am 29 yrs and my take home salary is 36000 pm. How do you think I should go for an invetsment. what plans do you suggest?
Sailesh answers, hi, i would recommend that you get a comprehensive investment plan made for yourself. The plan will guide you in achiveing all the investment goals that you have set for yourself. It will tell you the asset allocation you should follow year on year to ensure that you invest in line with your risk profile and time left to achive each goal.
expertji asked, Good Afternoon, Sir. I want to know about STP. How it work? Pls explain
Sailesh answers, hi, STP stands for Systematic Transfer Plan. This faciltiy is offered by mutual funds. STP is used by investors to invest in equity markets in a systematic manner. Investors typically invest the money first in liquid funds and then transfer a small portion into a specified fund (mostly equity funds) on a specified date of every month.
RAVI SHARMA asked, I & my wifeare having PPF in which we both put 70K per year , Can I open PPF for my child In which i want to 70k/year i dont need tax rebate on my child inevestment
Sailesh answers, hi, yes you can open a PPF account for your child and invest upto Rs. 70,000 every year.
Guru asked, Hi, I am 31 year old, married man with one kid. I would like to generate a corpus of about 1.5-2 crores towards retirement. Will it be a recommended approach to start SIP of say 5000 per month in equity MF like HDFC equity for time period 25 years to achieve my goal. Please advice
Sailesh answers, hi, you will have to first workout the retirement corpus required. If it is Rs 1.50-2.0 crores then you need to work out how much you need to invest every month/year and the rate of return you shuld earn that will add up to your target amount over 25 years. I would suggest that you take help of an investment planner to ensure that your maths is right
ME. asked, How is the Reliance Growth Fund - dividend and Reliance Power Sector Fund - dividend Mutual funds? I am planning to exit the Power fund. Am I right in exiting now?
Sailesh answers, hi, Reliance Growth fund is a midcap fund and Reliance Power fund is sector fund. I do not recommend sector funds to investors as the fund manager has to depend on the performance of the underlying sector to generate returns. IF the sector goes out of flavour, the fund manager may not be able to generate good returns. Hence, I would recommend that you exit power sector fund. Also, reduce your exposure to Reliance Growth Fund to 15% of your overall equity fund portfolio. Add more of large cap biased funds like Franklin India Bluechip Fund and HDFC Equity Fund to your portfolio
abhinav asked, Hi, I want to invest 10,000 monthy in sip for 3 years, please let me know some good funds ot buy. reponse awaited
Sailesh answers, hi, among the various funds, I would recommend you invest in HDFC Top 200 Fund and Franklin India Bluechip Fund
mmmmm asked, what are the best Tax Saving Investments ??
Sailesh answers, hi, I would recommend that you break up the limit of Section 80C between PPF, ELSS and insurance premium. This will ensure that you have a mix of equity and debt in your tax plan. As you grow in age, increase your allocation to PPF and reduce the same in ELSS
naresh asked, how ETFs can be purchased.
Sailesh answers, hi, ETFs are Exchange Trade Funds (ETFs). To buy these you need to call your regular share broker and buy it from the BSE or NSE (depending upon the exchange on which the ETF is listed)
Manju asked, Hi I always invest in best MF rating of 5 star of Value research. But After investing all MF have come down to 3 -4 star rating what should i do? Should i switch?
Sailesh answers, hi, the star rating can change with the performance of the fund. Change in the number of stars a fund has to its credit does not completely signify any under performance. You should monitor the performance of the fund and if there is fundamental change then only you should exit.
Sailesh says, We have run out of time completely. I thank you all for participating in the chat. If you have any further queries, please feel free to mail me at :

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