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Volatile markets? Go for long-term SIPs

October 07, 2008 09:02 IST

Are 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, financial planning expert Irfan Rupani replied to many such readers' queries. Here is the transcript:

irfan says, hi everyone, lets begin the chat

AJAY asked, hi myself ajay I invested SIP for HDFC for 5 years Is It possible to stop my SIP because there is financial loss in american co I don't remember that co can i continue my SIP?
irfan answers,  at 2008-10-01 12:37:41hi, while you can discontinue your SIP, the fact is a downturn in stock markets is positive development for sip investors as it lowers the average cost of purchase. if you are convinced about the fund, i would recommend that you stay invested.
ranjeeta asked, I am investing SBI Magnum/Fidelity Tax advantage for saving taxes,should I continue or to else where,but now I am losser to the extent of 40%
irfan answers, hi, with markets falling it is not surprising that tax-saving funds are also witnessing a decline because ultimately they are equity-linked. incidentally, fidelity tax advantage is a fund you can consider retaining in your portfolio.
Jaya asked, Dear Sir, Simply say whether MF SIP is good for long term investment in this present cenario?
irfan answers, hi, yes it is. to know more, read our article on this subject:
rijwan111 asked, which one is more save and good retrun wise SIP or one time invesment in MF
irfan answers, hi, sip is always an ideal way to invest. but investors can also consider investing lumpsum to benefit from market dips. of course, it must be noted that in a secularly rising market sips can work out to be expensive vis-a-vis lumpsum investments.
Sujan asked, SIP/MF/SHARES or Fixed Deposits what would you consider the best bet in the prevailing conditions?
irfan answers, hi, sip is a mode of investing and not an investment avenue by itself. as regards the others (mutual fund, shares and fixed deposits) they all have a role to play in your portfolio in the present market conditions.
irfan answers, hi, at personalfn we are not in favour of the sip plus insurance offering. to know more please read the article:
sushrut asked, how does the sip work when the markets are down? how does one make money in sip?
irfan answers, hi, there seem to be a lot of queries on sips in a falling market. in our view, falling markets are a positive development for sip investors. a fall in markets reduces the average purchase cost of the investment. this happens since the investment amount remains the same but the nav of the mutual fund falls on account of the market.
Chiranjib asked, I want to invest Rs 1500 per month in a SIP this year. Which SIP should I go for which gives me Tax benefits ?
irfan answers, hi, please write to me at for a detailed investment plan
sunny asked, Hi I have a portfolio of 2, 3 SIPs which I started in Jan., 2008, right now i am facing a loss of about 4000. What do you suggest. All SIP from Jan till now are in red....
irfan answers, hi, i have dealt with several queries on sips in a falling market earlier, please refer to chat details.
irfan answers, hi, i recommend that you do not fall for top performing funds in isolation. instead identify funds with well-established track records that are right for you.
irfan answers, hi, i recommend that you do not fall for top performing funds in isolation. instead identify funds with well-established track records that are right for you.
ilango asked, Dear Sir, I Wish i could an answer this time. I'm investing 30k per month on Kotak Oppurtunities Fund, Reliance diver power sector fund, UTI Infrastrcuture Fund through SIP route for last 6 months. 10,000 per month for each fund listed above. Can you please advise me whether the funds i've selected can fetch me returns in 2-3 yrs time ?
irfan answers, hi, two of your funds are of the sectoral/thematic variety. you should consider adding more diversified equity funds and maintain an investment time frame of at least 3-5 years.
Jo asked, If my SIP is completed and it is in negetive, what I will do? Create a new SIP on the same scheme or wait for a better time or any thing else?
irfan answers, hi, if the fund is well-managed you can opt for sip in the same fund. also by investing via sips, you do away with the need to wait for a better time.
vaibhav asked, Hi irfan - I am planning to invest in mutual funds. Is thisthe right time to do so??
irfan answers, hi, now is a good time as any to begin investing for the long-term (3-5 years). consider building a mutual fund portfolio of funds with varying investment styles.
metro asked, do you believe that SIPs average out the cost of aquisition over a period of time and it is better than periodic lumpsm investments?
irfan answers, hi, over the long-term particularly if you see a few market declines, the cost of acquisition of the sip should be lower than periodic lumpsum investments.
RahulGoel asked, Hi Irfan, How do you select a good fund for SIP ?
irfan answers, hi, look for a fund with a well-establish track record and managed by fund management team with a solid track record.
arul asked, Hi Irfan,is SIP +insure just a gimmick or is it a pure insurance plaY?
irfan answers, hi, have answered this question earlier, please refer to chat details.
Vinita asked, Hello, Can I keep investing in ICICI Infrastructure Growth Fund for long term?
irfan answers, hi, if you have the risk appetite for a thematic fund and have a view on the infrastructure sector, you can consider investing in the fund.
harish asked, For the information of all, bundling insurance with SIP has stopped yesterday (Sep 30th).
irfan answers, hi, newspaper reports suggest that there has been a revision on the stay on bundling sip with insurance.
Praveen asked, I would like to knoe about FIDELITY EQUITY FUND AND FIDELITY TAX SAVER FUND
irfan answers, hi fidelity equity fund is a fund that invests across markets and sectors and adopts the blended investment style (growth and value). fidelity tax advantage has a similar investment style and the only difference is that the investments in it have a 3-year lock in and are eligible for section 80C tax benefit.
karan asked, i have invested quite a lot in mutual funds with dividend reinvestment option. I started investing 2 years back and have not sold anything during the bull run. Now my portfolio is in loss but i still want to invest further by way of SIP. What do you suggest investing in as I would need some funds in the next few months to close a debt when the market comes up.
irfan answers, hi, trying to time the market is a dangerous proposition. if you need money in the near future, avoid equities and instead opt for fixed deposits and other debt-oriented investment avenues.
anil asked, which is benefit among SIPs and ulips ?
irfan answers, hi, the two are not comparable at all, sips are a mode of investing in mutual funds, while ulips are a investment plus insurance avenue.
abc asked, What do you think about current market senario? How much you expect the market in next 3 months.
irfan answers, hi, i am not capacitated to give a short-term view on the markets. but over the long-term (at least 3-5 years) a portfolio of well-managed equity funds should deliver a compounded return of 15%.
Ram79 asked, Do you know any mutual fund which do not charge 'Entry Load' in case of SIP?
irfan answers, hi, if you invest directly with the fund house, you do not incur entry load on sips.
Jatin asked, Hi i am Jatin 27 Yrs i have invested 13000 Rs in reliance diversifeid Power Fund i am in a loss of 2000 Rs. i am am planning to add another sip of 1500 in it. do you advise it.
irfan answers, hi, the fund is a thematic fund and is a high risk high return investment proposition. if you have a view on the sector and the risk appetite for a thematic fund, you can consider investing in it.
abhishek asked, Are index ETFs better than mutual funds in long term?
irfan answers, hi, index etfs are ideal for investors who do not want to take a call on individual stocks/sectors. for investors who want to manage their investments actively, actively managed funds are an option.
irfan says, hi, thank you all for participating in the chat, looks like we have run out of time, please write to me at with your queries.