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Some golden pre-Budget investment tips

Last updated on: May 27, 2009 16:03 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 on Wednesday, financial planning expert Sailesh Multani offered some valuable tips. Here is the transcript:

Sailesh says, Hi, goodafternoon everyone, lets begin the chat session

LaluPrasadYadav asked, Good aftrnoon sir..hw r u?? Investing in PPF is good for long term investment???
Sailesh answers,  at 2009-05-27 12:37:25Hi, PPF offers 8% return every year on compounded basis. The interest is tax free and the deposit in the same qualified for tax deduction under section 80C of the income tax act. Yes..its a good option from the long term point of view
roomi asked, hello sir pls tell me i have about 5 lakhs to invest as fixed deposits interst rate of banks have gone down pls tell me which will be best place to invest in present cicumstances.
Sailesh answers, hi, the interest rates on fixed deposits have gone down. IF you are looking at safe and assured returns then you will have to live with this fact. However, if you are willing to take some risk then consider investing in monthly income plans (MIPs) of mutual funds. These are debt schemes that can invest upto 25% of their corpus in equities. Given the fact that the outlook for equity markets have improved, MIPs make a good choice over FDs for low risk investors
Sailesh answers, hi, if you are looking ar investing in equity funds then I would recommend that you invest in large cap oriented well managed diversified equity funds. Pls stay away from sector / theme specific funds. Franklin India Bluechip Fund, HDFC Equity Fund are among the ones you can choose from
sam asked, i have been investing via the SIP method in two ELSS funds of two different AMC. It been now nearly 3 years to this . I wanted to know with 3 years lockin does it mean 3 years from my last SIP paid or from date of purchase of fund ( first sip) ?
Sailesh answers, hi, yes the 3 year lock in calculated for each instalment of SIP separately
ased asked, i hold franklin flexicap .is it advisable to shift to franklin bluechip .
Sailesh answers, hi, Franklin India Flexicap is a mix of large and midcap stocks. Given the fact that the equity markets are looking up, I expect the midcaps to do well in the future. As and when it happens Franklin Flexicap will benefit from the same.
Sumit asked, Sir, I am planning to invest around Rs1 lac-2lacs...what shuold be my portfolio for mid to long term...Please suggest
Sailesh answers, hi, if you are willing to investt for 3 years and more then your portfolio should have more of equities. If your investment horizon is less than a year then avoid equtities in your portfolio even if the equity markets look promising for the coming year.
vk asked, Is it good to invest in eqity funds at this time?
Sailesh answers, hi, given the fact that we have a stable government in the centre which can expedite the reform process, invest more easily in infrastructure projects, I expect the earnings of the companies to improve. This will be eventually reflected in the stock price. If you are looking at more than 3 years to invest for, then equity are the righ choice. As always, have a diverisifed portfolio with investment in debt and gold too
hardik.pathak asked, Is DSP Merryl SIP will be good option for this year?
Sailesh answers, hi, yes.. you can consider schemes like DSP BR Top 100 equity or DSP BR Equity Fund
mahesh asked, sir, Am a longterm investor. Is it advisable to enter the market at current level or can i wait for a correction ?
Sailesh answers, hi, if you are a long term investor, assuming that long term means atleast 5 years, then you should consider investing in equities. I would not advise that you wait for any correction. Small corrections of 5-10% are normal and these should not influence your investment decisions.
LaluPrasadYadav asked, Sir one more question.. i want to do safe investment.. wht r ur ideas about NSC(National Savings Certificate)..
Sailesh answers, hi, NSC is good becasue it offers tax benfits. But if you are not investing for tax saving then probably you can consider a bank FD for 1-2 years which give returns similar to that of NSC
sandeepsingh75 asked, Could your tell me about investing Gold
Sailesh answers, hi, i recommend all investors should invest in gold from diversification point of view. Atleast 10-15% of your portfolio should be in gold. If you are considering buying gold today, I would recommend that you can go and buy it. I would recommned gold etf over physical gold
Abhishek asked, Hi Sailesh, I want to invest on SIP for tax exemtion at the end of the year. Could you please suggest in which fund I can invest ?
Sailesh answers, hi, you should invest in ELSS schemes. Consider Franklin India Taxshiled and Fideltiy Tax Advantage among others
Pankaj asked, Sir I have SIP in HDFC top 200. It says entry load of 2.75% and exit Load of 1%. is it applicable on each installment of SIP or only first and last installment?
Sailesh answers, hi, yes entry load is applicable on each instalment of SIP
hb asked, Hi, I want to invest 15 lacs (which my wife has earned out of her business)for long term may be to heed towards financial freedom, I am 36yrs old and we have no children can you please suggest for a secured financial planning for both of us I am a salaried person earning @42K pm
Sailesh answers, hi, answer to your question lies in doing a complete financial plan for you and your family. A financial plan will tell you excatly how much to invest for each objective
Milav asked, Hello Sir, I want to know that Mutual Funds or Equity shares investments are safe than Share market investments now a days for long term investment perpose...
Sailesh answers, hi, direct equity investment requires you to research the company which you wish to invest in. This is an ongoing process. By investing in mutual funds you pass on the responsbility to the professional fund manager. Hence, I would recommend investing in equity via mutual fund
jaspal asked, Dear Sir, I am a first time entrant to equities. Please guide me which shares/mutual funds to buy with a investment limit of 1 lac and a time horizon of 3-4 years.
Sailesh answers, hi, since you are begining to invest in equity markets, I would recommend that you invest through mutual funds. You should invest in large cap funds with a well diversified portfolio and long term track record to show for. Franklin India Bleuchip Fund and HDFC Equity fund are 2 funds you can consider to start with
ased asked, hi i waant to invest 5 to 6 lacs for a period one month . where do u recommend
Sailesh answers, hi, liquid funds are best for investment horizon of one month
kaps asked, I want to start investment in MF through SIP. I want to invest in these funds 1.Reliance Infrastructure Fund 2.HDCF top 200 3. Sundram Tax saver Please suggest
Sailesh answers, hi, I would recommend that you drop Reliance Infrastructure form your list. Consider large cap diversifed equity fund instead
mohammedumar asked, hi, i m confused that should i enter now or wait...for correction...
Sailesh answers, hi, if your investment horizon is 5 years then you should not wait for correction in equity markets. You should go ahead and invest. Stagger your inveestments into 3-4 phases. E.g. you can invest 1/4 of the amount every week or month. But do not wait for correction. You may miss the bus!
ased asked, What are your views on ETFS , I am keen of ETfs on Nifty ,Banking and Midcap and Small Cap in little proportion . ( it can be of Benchmark, Quantum or any other ) primarily to get market linked returns and save on costs as ETFs have lesser cost . Which ones do u suggest in ETFs for NIfty and Banking Index
Sailesh answers, hi, Indexed based ETFs are a good option to invest in. Index funds help you diversify your portfolio. They are low on expense because the fund is managed passively. I would recommend NIFTY based funds because they are more diversified compared to SENSEX based funds. asked, hi sir, for a new investor, what r the options in funds to make a good portfolio?
Sailesh answers, hi, an ideal portfolio should have a mix of equity shares/funds, bank FDs and gold. The right mix of these assets is a function of your investment objective, investment horizon and risk appetite. Further investment is not only about returns, you should also consider the risk you are willing to to earn the potential return from each such asset class. Patience and Discipline are the 2 virtues of a successful investor
rajiv69 asked, How about investment in properties?
Sailesh answers, hi, I would recommend that you wait for few months. I epxect the property prices to correct in the coming few months
raghavan asked, I had invested in Reliance & Birla Mutual Funds but have not got the required returns. In fact I had mede the investment when the Sensex had plunged from 21000 to 15000. Should I hold onto my investments? What about DSP Blackrock Investment? Should I
Sailesh answers, hi, if you are invested in funds that match your investment objective and risk appetite, I would advise that you remain invested in the same. Equity markets are likely to do well in the coming years and equity funds should deliver the returns expected out of them
vikas asked, My portfolio as on today shows reasonable profit in some stocks shall i book my profit in these stock because i think there may be correction in market or hold them
Sailesh answers, hi, good to hear that you have made profits! You can book profits but the same should not be reinvested in equities, rather the profit should be invested in safer asset class like debt or gold. Reinvesting the profits in equities again is not advisable. asked, Can u please sugest some funds for a balanced portfolio? Thanks.
Sailesh answers, hi, you can consider balanced funds like HDFC Prudence and DSP BlackRock Balanced Fund. Balanced funds invest minimum 65% of their corpus in equities and the rest in debt.
manojritu_9 asked, hello sir i am holding reliance growth fund worth 150000 rs purchased at different rates.the average purchase rate comes at 311 rs/unit.I was running in loss.Now its level Should i sell it now & repurchase when market goes down or sip.
Sailesh answers, hi, I would recommend that you hold on to the units. I would advise that you diversify your portflio. Invest via SIP in other well managed diversifed equity funds like HDFC Top 200 Fund
rao asked, i have invested in reliance diversified power fund is it good for investment
Sailesh answers, hi, Reliance diversified power sector fund as the name suggests is a sectoral fund. Sectoral funds offer high risk high return proposition. They are equipped to give high returns when the underlying sector hits a purple patch. Similarly, when the sector loses its sheen the funds performance also takes a dip. Sector funds are best for investors who have a view on the sector i.e they can time the entry into and exit from the fund.
Sailesh says, Thank you all for participating in the chat session. If you have any queries, please feel free to mail me at :