» Business » Buying mutual funds? Here's some advice

Buying mutual funds? Here's some advice

August 21, 2008 09:17 IST
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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 Irfan Rupani replied to many such readers' queries. Here is the transcript:

irfan says, hi lets begin the chat

moorthy asked, Hi,Is it the right time to invest in Mutual fund or still we can wait?
irfan answers,  at 2008-08-20 12:50:51sure, if you have the risk appetite and are willing to stay invested for 3-5 years, this is a good time to start investing in a staggered manner (via sips).
manoj panghal asked, Hi, which one is the best mutual fund to invest with for the future of the child. Best avialable children's plan.
irfan answers, hi, most of the child plans are balanced funds with an exit load on premature redemption. we recommend that you consider some of the well-managed balanced funds like hdfc prudence and dsp ml balanced among others for your child's future. if you can take risk and have a long enough investment horizon, you can even consider some well-managed diversified equity funds.
moorthy asked, I am planning to invest in Tax saving funds, but every day market is fluctuating,whether i can invest Bulk when the market is low or Just start a SIP?
irfan answers, hi, investing via the sip route is our preferred mode of investing.
Amit asked, Hi. How doe you rate HDFC top 200 MF for investment in these times ?
irfan answers, hi, hdfc top 200 is a well-managed fund in our view. it is worth investing in for investors with the requisite risk appetite and investment horizon.
joy asked, i had invested in tata infrstucture and fidelity are thses mf good
irfan answers, hi, tata infrastructure is a thematic fund, which are high risk in nature. if you have a view on the infrastructure sector and the ability to take on high risk, then you can consider staying invested. regarding fidelity we will need to know the name of the fund.
vidhi asked, i want to start SIPs in four funds for a total of Rs.10000 per month. Which funds should i invest in. My timeframe is for the next 5 years. I will not take the money out for the next 10 years unless there is an emergency.
irfan answers, hi, although you have mentioned your investment tenure we would have liked to know your investment objective and risk profile. broadly, some funds that you can consider are hdfc top 200, dsp ml opportunities, fidelity equity and dsp ml equity among others.
nitin_p1 asked, What equity MF to invest for a 1 year horizon, large cap
irfan answers, hi, 1-yr is not a good enough investment horizon for equities. we recommend a minimum 3-5 years investment tenure.
Shankar asked, I have invested in the followinf funds wherein I have suffered value erosion, 1. DSP ML TIGER growth 2. TATA infrstructure-growth 3. ICICI Infrastructure-growth 4. IDFC Premium equity -Growth 5. Frankil Templeton; Blue Chip & Flexicap Growth. Should I stay invested or quit and take a new route to catch up the loss.
irfan answers, hi, your portfolio is lopsided in favour of thematic funds (of the infrastructure variety). if you have the risk appetite for such funds and a view on the infrastructure sector then you can stay invested. else consider diversifying across well-managed diversified equity funds.
msn asked, Hi,what's the diff between , ELSS & SIP ? I am kind of looking to invest in MF , for tax saving , and want to invest on quaterly or monthly basis , plz suggest
irfan answers, hi, elss is a tax-saving fund. while an sip is a mode of investing in mutual funds.
Guru asked, Hi Irfan, I wish to build a MF portfolio. I would like to distribute my investment to diversified equity, balanced and sector funds. I want to invest through the SIP route. Please suggest some good funds for me. Thanks
irfan answers, hi, we will need more details like your investment objective, investment tenure and risk appetite before recommending a portfolio. write in to with these details to enable us to advise you better.
jim asked, hi I have some 5Lakhs to invest for a period of 1 year to 1.5 years. can u suggest some good MFs?
irfan answers, hi, given your investment tenure you can consider investing in fixed deposits or fixed maturity plans (fmps), whose investment tenure matches your investment horizon.
hariv05 asked, I have accumulated somw gains and qulaify for long term capital gains needing reinvestment. As housing loan interest rates are high, I want to know where else I can park this money getting exemption?
irfan answers, hi, you can consider investing in section 54 ec bonds issued by nhai and rec.
nitinptrp asked, hi. is it advisable to be in the rented house than owning one at this moment and hence whatever difference of (EMI-rent) is there to invest in MFs for next 3-5 yrs? pls advise on MF to invest then. thanks
irfan answers, hi, we have dealt with this topic in an article some time back, please click below to read article:
Investor asked, Hi, Can you please explain what criteria needs to be looked into before redemption from a Equity mutual fund.
irfan answers, hi, we have written an article on this topic, please click below to read it:
gmnprasad asked, Hi Irfan, Is there any LOCK-IN period for Mutual funds?
irfan answers, hi, apart from elss (tax-saving funds), mutual funds do not have a lock-in period. however, some mutual funds have an exit load on premature redemptions.
ruchi asked, which is the best mutualfund to invest for a starter? Im currently a student and want to invest parttime jobs money? Plz can u suggest me good fund to start with?
irfan answers, hi, to know more about how you should go about investing, please download for free the Financial Planning for Youth:
Rajesh asked, Hi Irfan. Should I go for growth option or divident option while investing in MF. I am seeing benifit and loss in both the options. Please guide for a starter. Thanks.
irfan answers, hi, your choice between growth and dividend option depends on your liquidity requirements. if you need regular income stream opt for the dividend option (note that dividends are not assured), else opt for the growth option.
champak asked, Hello Sir, Please answer atleast one of my questions. Suggest me good Mutual Funds to invest now Thank you
irfan answers, hi, there is no such thing as a 'good fund to invest in now'. i will need more details like your investment objective, tenure and risk profile to advise you further. you can write in to with details.
kumark asked, How do we relate MFs to LIC policies?
irfan answers, hi, the two are not comparable at all. mutual funds are an investment and lic policies provide insurance/life cover.
vc asked, Hi, I have invested 50K in RNRF. From long term perspective, is it good to remain invested here? Please answer. I have never received any response from rediff's celebrity chats.
irfan answers, hi, rnrf is a thematic fund. such funds perform in spurts and are suitable for investors with a high risk appetite; also investors should be able to time their entry into/exit from the fund. if you wish to remain invested for the long-term in a relatively passive manner, then diversified equity funds should be more suitable.
Rekha asked, How do you rate the present FMPs available in the market? Which is a better option? Quarterly or 13 months?
irfan answers, hi, some of the fmps are quite attractive on a post-tax return basis. while investing in fmps you must ensure that its investment tenure matches your own.
Don asked, What do u think abt investing in Gold exchange trade funds?
irfan answers, hi, we have written an article on this topic, please click below to read:
ajay08 asked, Hello, In a falling markrt is it better to stick ti large cap stock MFs or would it be better to fish for "already flattened" midcap/small cap funds? Particularly if our investment horizon is 12-24 months
irfan answers, hi, a 24 month investment horizon is inadequate for equity investments. we recommend at least 3-5 years. we believe investors should have a mix of large cap and mid cap funds in their portfolios based on their risk appetite.
Akhil asked, good afternoon sir, I would like to you the mutual funds which will be beneficial for me. I had already invested 1-1.5 lakhs in MF considering it to shield me against volatility of stocks . But still i am today standing on 15% negative returns.
irfan answers, hi, mutual funds like stocks are market-linked. mutual funds cannot completely shield against volatility in stocks. being diversified they can lower the impact in a market downturn.
girish asked, Hi, I have started SIP in the foll funds :- SBI Multiplier, SBI Global Fund, Reliance Growth, Reliance Vision, Tata Pure Equity, Tata Eq. Opp. Fund, Sundaram Select Mid-cap, Birla S.L. Equity Fund and Taurus Starshare. Should I continue with above funds. If not pl suggest some other funds.
irfan answers, hi, apart from sundaram select midcap, we are not comfortable with the other funds mentioned by you. you consider investing in funds like hdfc top 200, dsp ml equity, fidelity equity fund among others.
akshay1 asked, boss i m observing tht u r rplyng to long questions or those who hv askd more thn once, so i hv askd u abt tax saving funds and whether one time investment or sip is better
irfan answers, hi, there is no such pattern, questions are answered on merit. might have missed your question. broadly, sips are the preferred way of investing in equity funds (including tax saving funds) over the long-term.
irfan says, thank you, looks like time is up. write into with your queries.

Chat with Irfan every Wednesday at 1 pm
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