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How to invest smartly and make big money

December 02, 2010 17:18 IST
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MoneyAre 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 rediff.comfinancial planning expert Sailesh Multani offered some valuable tips. Here is the transcript:

Sailesh says, Hi, good evening and welcome to this chat session

mvsiva asked, which are the good equity mutual fund schemes to invest?
Sailesh answers,  at 2010-12-02 16:00:23hi, my personal favourites include HDFC Top 200, Fidelity Equity and DSP BR Equity. I am personally invested in these funds.
sanjx asked, Hi Sailesh, I have 2 lac surplus amount, i need to buy vehicle, i have a dilema of wheather to keep this 2 lac in bank FD and take loan for vehicle for 2 lacs , or does it make sense to earn intrest from bank FD and pay emi for vehicle loan ?
Sailesh answers, hi, if you can use the surplus money to foot the cost of your vehicle why not do so? why unnecessarily take a loan at 10-12%? I would not recommend taking a loan and buying the vehicle
Mahesh asked, What is your outlook of Nifty/Sensex till the end of the current fiscal?
Sailesh answers, hi, I have a long term view on the market. I personally believe that markets can give return in the range of 12-15% p.a. over the next 5 years. This is provided our government is committed to a growth rate of 7-8%
Multani asked, Have two properties - One I have given on rent, and for second construction is going on. For first I am getting 80L (Bought at 30, 7 yrs ago). For second, I am getting 45 bought at 40 2 yrs ago. Both are for investment. Which one should I sell first, in case I want to?
Sailesh answers, hi, sell the first property first as you will not be liable to pay short term capital gains.
Sailesh answers, hi, sectoral funds do well only when the underlying sector is performing well. Once the sector goes out of flavour the perfromance of the fund falters. therefore I always recommend diversified equity funds which have the flexibility to invest in an sector that holds opportunity for the future. Never invest in a sector fund.
Asis asked, what's yuor take on current flood of FPOs
Sailesh answers, hi, I am not a great fan of FPOs or IPOs. If you have the money why dont you invest in the already listed frontline companies? IPOs and FPOs are investors favourites only because of their listing gains. Investors get carried away by the listing gains of 25-100% on a single day and fall for the IPOs without doing their homework.
siva asked, Should we go for Mutual Fund SIP + Term insurance or ULIP ? I have taken ULIPs earlier(Lifeinvest @Max Newyork life, Golden Value@Reliance, Youngstar @HDFC, but would like to rethink on the same.
Sailesh answers, hi, if your objective is to grow your money then go for equity funds and that too via the SIP route. For protection against any risk on your life, you need to take a term plan. Stay away from ULIPs. Never entertain your insurance agent if he proposes a ULIP.
khkjh asked, suggest me 2 large cap, 1 mid cap & 1 small cap fund for very long term investment through SIP
Sailesh answers, hi, i have given the names of the funds at the start of the chat. You can start an SIP in each of those funds.
Saravanan asked, Hi, which MF is the good one for long term investment with good returns. I can pay 2K - 4K per month in SIP.could you please suggest me few MF to invest in SIP
Sailesh answers, hi, i have given the names of the funds at the start of the chat. You can start an SIP in each of those funds.
Investor asked, Is it a good time to invest in properties now? Is a property rate fall expected soon, or will it keep on increasing in cities like Pune, where IT company presence is increasing?
Sailesh answers, hi, I am personally of the opinion that property prices are in the bubble zone. I know I have been saying that the bubble can burst anytime but unfortunately, it seems our bankers and politcians will not allow it to happen. If you are looking to buy a property from investment point of view then my view is AVOID.
Praveen asked, Hi sailesh, Coudl you please let me know investing in silver metal is preffered one!. If yes could you please let me know the procedures\Limit\Mode.
Sailesh answers, hi, to invest in silver you will have to buy the silver futures in the commodity exchange. There are no sliver exchange traded funds like Gold ETFs. Even gold is a good investment proposition at the current levels. Infact every investor ought to have 10-15% allocation to gold.
Asis asked, I had purchased a land in name of a partnership firm 1978 for Rs 1 Lac If I sell it today for Rs 50 Lacs what wld be the capital gain implication?
Sailesh answers, hi, answer to your question invovles a small calculation. Request you to mail me separately at
pupun asked, Hi Sailesh, I want to invest 20k fr tax saving scheme...and the tenure shld be 3 years...please suggest.. regds
Sailesh answers, hi, invest in equity linked savings schemes (ELSS). These have a lock in of 3 years. But be informed that these are equity funds and therefore subject to risk associated with equity markets. Returns from these funds are not assured thought a lot of the funds boast of impressive past performance.
Niranjan asked, How good is SBI smart ULIP compared to other plans?
Sailesh answers, hi, I dont recommend ULIPs be they SMART or DUMB. Please stay away from them. If you want insurance take a term plan.
bunoo asked, i hav 15 lacs of money. i want to utilise wisely, pl tell me where to invest. i am 37 years of age.
Sailesh answers, hi, you havent mentiones your investment horizon and risk appetite. Therefore it will be difficult to suggest an asset allocation. Broadly, if your investment horizon is 5 years and more then you could invest 70% of your corpus into divrsified equity funds. If your investment horizon is less than 5 years then invest 50% in debt and 50% in balanced funds.
pgandhi79 asked, Hi,whats your view on recent scams in Banking, Telecom , will investor fertenity will get affected from this because at the end of probing sure some results will come which is going to hamper some of the big names in banking, telco.
Sailesh answers, hi, what we have seen nad read in the past two weeks is what actually goes on behind the scenes. This no big news. I personally don't think that any such event is going to affect the long term trend of the stock market. Investors should not worry much about the same. Every fall in the equity market should be used as an opportunity to invest.
austin asked, I have invested in 5 mutual fund for almost 1 years of 2000Rs monthly - HDFC Growth, HSBC Equity, Kotak-30 Growth, Reliance Diversified Power Sector fund Growth & Reliance Growth fund are they better mutual fund or not please advice
Sailesh answers, hi, none of the schemes in your portfolio make it to the investment grade as far as my criteria is concerned. I would advise you to redeem your entire portfolio and invest in the funds mentioned at the start of my chat.
rathish asked, hi, i invested 2 lakhs in JM contra fund in 2008. The current value is 1 lakhs. Should i take out the money and invest is stock directly for early recovery? If yes which stocks you suggest
Sailesh answers, hi, if I was in your place I would have redeemded this fund long back. Redeem your fund first thing tomorrow morning. I would then reinvest the sale proceeds into HDFC Equity Fund.
chs asked, hello Sir, my name is shah, i would like to know that which one is better investment option. I have a personal portfolio of shares, or through a mutual fund house? Also i am looking for a long term period of more then 5 years.
Sailesh answers, hi, if you have the necessary time, information and skill set to pick up the right stock at the right time then you can continue to invest in stocks directly. Otherwise, I would strongly advise you to invest via the equity funds.
Mahesh Bhat asked, Hi I have investing in Mutual fund as follows BIRLA SUNLIFE 95 FUND REGULAR GROWTH PLAN (SIP) 1,000.00 DSP BLACKROCK EQUITY FUND - GROWTH (SIP) 1,000.00 DSP BR TOP 100 EQUITY FUND GROWTH (SIP) 1,500.00 DSP BLACKROCK BALANCE FUND - GROWTH (SIP) 1,500.00 BIRLA MID CAP PLAN - GROWTH OPTION (SIP) 1,500.00 : HDFC TOP 200 FUND GROWTH (SIP) 2,500.00 RELIANCE GROWTH FUND - GROWTH PLAN (SIP) 1,500.00 HDFC TOP 200 FUND GROWTH (SIP) 1,000.00 HDFC PRUDENCE FUND GROWTH (SIP) 1,500.00 Wht do you think about the portfolio
Sailesh answers, hi, overall a good portfolio. You seem to be a fan of Birla. Or is it that someone from Birla sold the funds to you. Continue with your investments. No changes suggested.
psm asked, how to earn money in share market for lon term perspective
Sailesh answers, hi, invest with a time horizon of 5 years. Invest in well managed diversified equity funds. Invest via the SIP route. I am sure you will have reasons to cheer after 5 years.
somu asked, Hi,at the age of 32 what is the best choice to invest either in insurance/pensionplans/MFs
Sailesh answers, hi, at the age of 32, ideally you should be predominantly invested into equity funds, say 70%. the rest 30% can be allocated to gold and debt.As far as insurance is concerned take a term plan. Dont buy any ULIP or Pension plans. These dont help.
gfghf asked, hi i have invested mainly in fidelity tax advantage,hdfc tax saver,birla sun life tax relief 96 and sbi magnum tax gain ? are all these are good funds
Sailesh answers, hi, except for SBI all are good.
kaid asked, hi sir, is it advisable to invest in mip now??
Sailesh answers, hi, yes, it is the most opportune time to invest in MIPs. MIPs are a mix of debt and equity. Both the debt and equity market are going through a bad patch. It certainly is a good time to invest in MIP.
sam asked, Is it worthwhile to invest in equities for the long term in the present volatile market ?
Sailesh answers, hi, if you are long term investor willing to stay invested for 5 years and more then you can certainly invest in equity markets. Markets will always be volatile. So dont wait for the ideal time because there is none.
dddf asked, i have a lumpsum amout of 2lacs.Should i clear my car loan or shoudl i invest in stock market.ROI for my car loan is 12%..pls uggest
Sailesh answers, hi, please go and repay your car loan. Atleast the car will be yours! Stock market is a tricky place. If the markets take a downturn, you will only have yourself to blame for.
Mitesh asked, How much one should invest in Gold & Silver
Sailesh answers, hi, according to me maximum allocation should not exceed 20%.
sanjdesh asked, I am looking for a traditional pension plan with good return or else lumpsum amount I can invest at one shot and should get monthly returns after say 40 yrs (currently I am 35). Please advise
Sailesh answers, hi, you need to get an investment plan in place. I would advise you to take the help of a competent and honest investment advisor who will help you with your planning.
gsg asked, What is outlook of real estate?
Sailesh answers, hi, I would not recommend real estate as an investment at the current levels. Pray that the property prices correct sharply.
Asis asked, What is the implication of Capital gain tax on Gold ETF vis-a-vis investment in Gold in primary form
Sailesh answers, hi, Gold ETF are treated as long term capital asset if they are held for more than 12 months from the date of purchase whereas physical gold is treated as a long term capital asset only if it is held for more than 36 months from the date of investment. Gold ETFs do not form a part of wealth as defined by wealth tax act and therefore not subject to wealth tax whereas physical gold is subject to wealth tax.
kompa asked, Hi,i am planning to enter the world of futures and options market, any advise?
Sailesh answers, hi, please dont enter.
suman_muk asked, I have taken a home loan for 10years. Should I take it for 20 years or precloure? which one is the better option? Thanks.
Sailesh answers, hi, if you can service the loan in 10 years, why opt for longer duration? As and whne you are in a position to prepay your loan by all means please do.
sano asked, I am 34 now with a monthly income of about 1L. At the time of retirement I would like to have a retirement fund of about 1.5 Cr. My current investments are in PPF (mine, wife and son). I also have additional contributions towards PF. What are the additional modes of investments for me to reach the expected figure?
Sailesh answers, hi, you have taken care of your debt portolio. You should start taking some risk and invest in equity funds. Channelisce a part of your savings into equity funds via the SIP route. This is not only desirable but a must in your portfolio. Otherwise you may risk missing your retirement goal.
sunidhi asked, I see you are favouring mutual funds. But even there many funds give negative return like the JM contra fund... So the investor is always at a risk. Fund managers though are laughing all the way to the bank. You name few so called good funds. But they also give rider that past performance is not guaranteed in future.. Everyone has riders to CYA... what can you guide on that ?
Sailesh answers, hi, returns from equity funds are market linked. Therefore there is no guarantee or asusrance of any type. As an investor your job is to invest in the best of the funds. I agree that there are underperforming funds. that is why it becomes all the more important to invest in the funds with a proven track record. I therefore always suggest that investors should hire the services of a competent and honest investment advisor.
pks asked, Hello , i had invested in Birla sunlife equity (sip), HDFC tax saver(sip), HDFC top 200 , DSP BR top 100 (sip) , reliance diversified power fund (sip) , reliance infra structure fund . Please advice if they are good funds ? in case I have to liquidate which fund should I leave and after that invest in which fund the same amount to get better returns ?
Sailesh answers, hi, pls redeem Reliance funds. Invest in the 3 funds suggested a the start of the chat
dnyanda 27 asked, which goldETFs should be taken
Sailesh answers, hi, I personally like Benchmark Gold ETf and Quantum Gold ETF.
cafm asked, Hi, I am 26 is investing in a pension plan that is linked to debt market over the next 5 years (like lic plans) a bad idea? this is mostly for tax saving...
Sailesh answers, hi, dont take a pension plan to save tax. Rather dont buy a penion plan at all. For tax saving you should take a term plan and invest in PPF and ELSS.
pabitra asked, Hello Shailesh, Is this a good time to invest in gold?
Sailesh answers, hi, the western world is still struggling with the aftershocks of credit crisis of 2008. Till it recovers from it completely, gold will continue to be in demand. therefore you allocated add 10-15% of your portfolio to gold without any doubt or hesitation.
soundsgood asked, What is the timeframe you think one should wait to buy a second house as an investment (assuming we have a bubble right now)
Sailesh answers, hi, wait till the bubble bursts. when will that happen is anyone's guess.
Pradeep asked, Hi..I have paid the first year premium for a ULIP from ICICI prudential. Is it possible to move out of it? I have not paid the 2'nd year premium that was due in July. What will be the amount refunded in that case?
Sailesh answers, hi, since you have paid the first year's premium I would recommend that you continue with the same for the next 6-7 years which is what it takes for a ULIP to break even. Dont stop your premiums now.
money asked, my mutual funds selections are HDFC TOP 200 == 1000 RELIANCE REGULAR SAVINGS == 1000 SUNDARAM SMILE -- 500 PRINCIPAL LARGE CAP -- 1000 IDFC PREMIER EQUITY -- 2000 UTI DIVIDENT YIELD -500
Sailesh answers, hi, all good funds except UTI Div Yield.
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:

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