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Invest smart and be rich this New Year!

Last updated on: December 29, 2011 17:12 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?

Financial planning expert Sailesh Multani offered some valuable tips. Here is the transcript:

Sailesh says, Hello & Good evening - welcome to this chat session

Sailesh says, For all those who are looking forward to recommendations on various types of mutual funds, here are my picks. In the equity fund category – HDFC Top 200 Fund, DSP BR Equity Fund and Fidelity Equity Fund. In the balanced fund category, I recommend HDFC Prudence Fund. In the ELSS category – HDFC Tax Saver and Fidelity Tax Advantage Fund

yuvi asked, Sir,... I want invest about Rs 25000/month in mutual funds and looking at about corpus of abt 2 crores in abt 15 years... Can you please tell me which MF I should invest to achieve this goal
Sailesh answers,  at 2011-12-29 15:59:17Hi, assuming your investments earn an average return of 9% p.a., you can accumulate the sum of Rs 2 crores in 15 years if your monthly investment is Rs 53000 (approx). With an investment of Rs 25,000 per month then you can expect to accumulate a sum of Rs 95 lakhs (approx)
SKumar asked, I am working in a Pvt Co & getting a monthly Salary of 35K. Pl suggest me a good invest ment plan
Sailesh answers, Hi, your investment plan should be based on your investment objective, risky appetite and investment horizon. E.g. if your investment objective is retirement which is 15 years away then your investment should ideally be 70% equity, 20% debt and 10% gold. Similarly you can make the investment plan for your other financial goals and aspirations.
ajay asked, is it right time to invest in gold market
Sailesh answers, Hi, in my view every investor, irrespective of age and risk-profile, should have 10% allocation to gold. Gold is a precious metal and will always remain in short supply. It is the most sought after asset class in times of financial distress like the one we witnessed in the year 2008. Moreover, it is a store of value. The value of gold in terms of goods and services it can buy has remained constant over the centuries. Therefore, investment in gold also serves as a hedge against inflation. Gold as an asset class is less volatile compared to other asset classes like equity, debt and real estate. It can be used to diversify one's portfolio to bring in more stability in returns. For investors who are planning to invest in gold, it makes sense to invest in gold today. However, don't buy all the gold you want to add to your portfolio in one shot. Rather spread your investment over a six months time frame. I would advise investors to invest in Gold Exchange Traded Funds (ETFs) as against physical gold. ETFs are easier to buy and sell. Please keep in mind that you will need to open a demat account compulsorily if you want to invest in Gold ETFs.
BAN asked, hi, is it advisable now to redeem loss making mf and invest into direct equity market
Sailesh answers, hi, you need to analyse your MF portfolio first before you redeem your funds. It is possible that you are invested in best of the funds but not seeing much appreciation in their value because the equity market has been in the negative territory for the last one year. Simpl moving you investment from MF to stocks will not be a prudent investment strategy
Sailesh answers, hi, you should continue with your SIPs. Please understand that equity markets can test your patience and therefore it is advisable to have a long term view on the market. The ideal invesrment horzion according to me is minimum 5 years. Please evalauate your portfolio once every 6 months to ensure that your funds are performing to your expectation. Getting depressed with the market scenario is no a quality of a succssful investor. Have patience. You will certainly see your money grow.
Vinay asked, Please tell me is it a right time to invest in stock market. If so which shares do you recommend and what are the areas I need to see before investing in stocks.
Sailesh answers, hi, if you are long term investor who is willing to invest for a minimum investment horizon of 5 years, then you should start investing today. I prefer diversified equity funds to direct stocks. SIP is the best way to invest in equity funds.
yuvi3 asked, Sir I have invested in SIP in following MF. HDF equity/HDFC top 200/DSP BR/Franklin Blue Chip/BSL Frontline equity/HDFC Prudence(balanced fund) and Sundaram Select Midcap. I feel the portfolio is too large. I invest abt 3k in each every month. Should I reduce the portfolio. and if yes which one.. Thanks
Sailesh answers, hi, overall a very good portfolio. You can do away with HDFC Balanced Fund.
ajay_k1977 asked, Hi, I need to invest rs50,000 in ELS fund. Please tell me if this is the right time to invest or I should wait for some more time.
Sailesh answers, hi, please go ahead and invest. You have 3 months to invest. you can stagger your investment into 3 phases. invest 1/3rd every time the market corrects.
tsr14 asked, HI Kumar, I wanted to Invest 10 lacks on my kids as a long time investment , please suggest me some policy
Sailesh answers, hi, for your children's future expenditure on education and marriage you need to start building a separate fund consisting of diversified equity funds, bank FDs and Gold ETFs. Allocation to Gold ETFs can be 5%. If the goal is 10 years away you can invest 70% in equity and rest in debt.
raina asked, how much should we invest in govt savings like fixed deposits,nsc,mis etc
Sailesh answers, hi, the answer to your question lies in your investment objective and investment horrizon. IF your objectvie is to get assured and regular income from your investments then debt instruments should be your ideal choice. IF your objective is to grow your money then you should consider investing your money into diversified equity funds. In that case your investment horizon should be atleast 5 years
rahul asked, i am 36 married having 1 kid. what investments instruments should i invest in? my long term goals are daughters higher education and retirement planning?
Sailesh answers, hi, you should get a financial plan written for yourself. the plan will lay down a roadmap which will guide you as to how should you go about planning for each of your goal. you should aim at building a separate portfolio for each of your goal. This portfolio should consist of diversified equity funds, debt funds, bank FDs and Gold ETFs
sk asked, hi NHAI bonds your call
Sailesh answers, hi, you can invest a small portion of your money into this fund. Ideally your reitrement fund should have bonds like these
Atul asked, What are the funds for long term say 5-10 yrs which might give an average return of say approx 12-15% p.a.
Sailesh answers, hi, you can refer the names of the funds that I have recommended at the start of this chat.
tinku asked, I have SIP of 1000Rs each in HDFC top 200, DSP top 100, Rel growth fund, ICICI discovery fund & Rel banking fund. please comment on portfolio
Sailesh answers, hi, exit Reliance Growth and Reliance Banking Sector Fund. you can add Fideliyy Equity Fund and Franklin India Bluechip Fund.
srd asked, Hi sir, I am investing Rs. 1000/- eaach in Fidelity equity fund Icicipru focussed bluechip fund hdfc top 200 fund hdfc equity fund hdfc midcap opportunity fund IDFC premier equity fund Icicipru tax fund & reliance gold fund. how is my portfolia, any change required?.
Sailesh answers, hi, overall a good portfolio but too much exposure to midcap stocks. Expect your portfolio returns to be very volatile. Going forward invest more in large cap funds like Franklin India Bluechip Fund
ranjita asked, Please tell us some debt fund will give good return time is no problem.
Sailesh answers, hi, you should focus on short term funds till the interest rates actually start coming down. Once that happend you can start investing into long term income funds. I recommend Fidelity Short Term Income Fund among others. In the long term income fund category I recommend HDFC Income Fund.
SAMIR asked, What is diversified equity fund ?
Sailesh answers, hi, diversified equity fund is an equity fund that can invest in stocks across the sectors.
nitbsnl asked, Which is the best long term investment for child life around 1000 monthly?
Sailesh answers, hi, for plannning you child's future expenses you should build a portfolio of equity and debt funds. Recurring deposits with banks and Gold ETFs should be considered too.
PaPaPa asked, Is prepayment of home loan is a good option?
Sailesh answers, hi, i am personally of the view that any individual should have minimum liabilities in his personal balance sheet. Accordingly, as and when you get a chance to prepay your home loan, you should use it. you will improve your cash flow situation and the saving in EMI can be channelised into SIPs in diversified equity funds.
Krishna asked, I am 25yrs old and working as software devt. engineer ia a MNC. I am single. What will be the best option for me to invest, so that my money grows?
Sailesh answers, hi, given your age you should invest predominantly into diversified equity fund through SIPs. A 10-15% allocation to Gold would be ideal.
abhishek asked, Dear sialesh, what should investment to gross salary ratio for a salaried professional working in a reputed private organization in India? Also, what should be the percentage distribution of investments wrt LIC, PPF, PF, Mutual funds, Shares, etc..
Sailesh answers, hi, the thumb rule to asceertain if your savings are adequate or not is to ensure that you save 40% of your gross income. Allocation to fixed income instruments like PPF/LIC, etc will be a function of your investment objective, risk appetite and investment horizon.
Rajnish asked, I have two child one daughter and one son.My salary Rs 20000/-month.Please advise me for future finance.I go with SIP or Ulip Plan.
Sailesh answers, hi, at the cost of sounding repetitive, If would advise you to build a portfolio of equity fund and Gold ETF for your children's future expenses on education and marriage. Please dont buy any insurance plan for your children.
nimesh asked, As the stock market is in down trend, but still it has only marginally effected reality market as compared to stock market crash in jan-2008. SO WHERE TO INVEST???? STOCK MARKET OR IN PROPERTY
Sailesh answers, hi, I am personally of the opinion that real estate prices dont justify fundamentals. The prices are have been kept high on account of builder cartel. I expect the prices to correct in the coming days. Investment in property should be avoided.
janak asked, i have invested rs.8 lacs in stock market now the vlue went down to 4 lacs should i keep the stock & wait for future apprication
Sailesh answers, hi, you should get your portfolio checked through a professional investment advisor. If your stocks are fundamentally sound then there is no need for you to sell them.
praveen asked, which is the best risk free pension scheme that we can invest at present??
Sailesh answers, hi, I dont recommend pension plans for one's retirement. The best way to plan for retirement is to build the desired retirement corpus comprising of diversified equity funds, bank FDs and Gold ETFs. the retirement corpus should be large enough to last your life time and generate regular income sufficient to meet all possible post-retirement expenses. It would be best to engage the services of a professional financial planner who can help you with your retirement plan.
praveen asked, which is the best risk free pension scheme that we can invest at present??
Sailesh answers, hi, I dont recommend pension plans for one's retirement. The best way to plan for retirement is to build the desired retirement corpus comprising of diversified equity funds, bank FDs and Gold ETFs. the retirement corpus should be large enough to last your life time and generate regular income sufficient to meet all possible post-retirement expenses. It would be best to engage the services of a professional financial planner who can help you with your retirement plan.
Ash asked, hi, i have invested about 120000 per year in different insurance policies... to get a cover of 50 lakhs. is it worth?
Sailesh answers, hi, as far as insurance is concerned, you should stick to term plans. Term plans offer pure risk cover without any maturity benfits. Term plans also offer higher sum assured for relatively lower premium.
rahul asked, i invest every month via SIP in hdfc top 200, hdfc equity, hdfc prudence, hdfc midcap opportunities and quantum long term equity? is my portfolio correct?
Sailesh answers, hi, overall a very good portfolio.
prav2612 asked, Hi Kumar, Can i invest in Real estate or shares.Which is better option for long term?
Sailesh answers, hi, between the two I would vote for equity. If you are long term investor with an investment horizon of 5 years and willing to take higher degree of risk, then equities should be your ideal choice. I prefer diversified equity funds to stocks.
nilesdh asked, Hello, I earn 8.5 lacs/ annum. what should be my investment, I have invested some amount in shares directly, but that experience was bad for me, So please suggest where I can invest safely
Sailesh answers, hi, if you are not able to manage a stock portfolio on your own, then it is advisable to move your money to diversified equity funds. Let the professional fund manager manage the portfolio on your behalf.
amolk asked, Sir...i had invested in reliance infar fund 3yrs back. now the value of my fund is almost half the amount invested. shall i withdraw or shall i hold the fund. pls suggest
Sailesh answers, hi, if you have invested in Reliance Infrastructure fund then you should exit this fund as it is a thematic fund which will do well only when the underlying sectors that constiture the theme do well. It would be prudent on your part to exit this fund and invest in diversified equity funds recommended by me at the start of this chat.
na asked, i am 30 and didnt started SIP...suggest how to do it..i am new to SIP thanks
Sailesh answers, hi, age has got nothing to do with your SIPs. You can start your SIPs today regardless of your age.
shanu asked, These days lot of FMP are in market. Tey never mention percentage of return. I am new to this. Could you guide here. Also how is income tax calculated for FMP interest?
Sailesh answers, hi, the SEBI guidelines restrict the fund houses from disclosing the expected yield at the time of issue. This is because in the past the distributors have markets the FMPs as assured income yielding instruments which is not actually the case. FMPs are taxed like debt funds. For investment period less than one year the short term capital gains is clubbed with your total income and taxed at the marginal rate. In the case of investment period in excess of 12 months, you get the benefit of indexation. the tax is calculated in two steps : 10% without indexation and 20% with indexation, whichever is lower is the tax. For short term FMPs select dividend option. For long term FMPs select growth option.
bapina asked, I am thinking to take term plan for 25 years( only insurance) and remaining want to put in VVPF is it good idea
Sailesh answers, hi, it is a good idea to take a term plan and invest in VPF. But it would be preudent on your part to further diversify your portfolio. you should consider adding diversified equity funds to your portfolio. this is good for your overall portfolio return.
narendran asked, At the age of 50+ what are the best investment options?
Sailesh answers, hi, at the age of 50 you are nearing your retirement. your investments should start moving from high risk investments like equity funds to low risk investments like debt funds, FMPs, bank FDs, etc.
dayasagar asked, Hi, pls advise me how to invest in ETF's. Whom I hv to approach and how much and at what instalments I hv to invest. Thanks in advance, Sir Dayasagar
Sailesh answers, hi to invest in any ETF like index fund or Gold ETF, you need to have a demat and a share trading account. Demat account is a must for buying and selling a ETF.
sudhir asked, Hi i have been investing Rs 5000 in HDFC long term advantage fund growth for the last 2-3 years is it a good fund and shall i continue doing it? I have also invested in SBI magnum tax gain for 2-3 years through and now stopped.
Sailesh answers, hi, remain invested in HDFc Long Term Advantage Fund. Exit SBI Magnum Taxgain.
bapina asked, I was just compareing all the insurance company product and found none of them are so attaractive
Sailesh answers, hi, if your objective is to insure your life then term plan is the best. While selecting the term plan compare the premiums and the claim settlement ratio. Also, check the pedigree of the parent insurance company.
Sudhi asked, Hi, Please review my portfolio, i am investing in 2000 each HDFC top 200, ICICI discovery and Fidility equity growth, Thanx
Sailesh answers, hi, overall a good investment portfolio.
Gauresh asked, Is HDFC Top 200 Fund covered under 80C
Sailesh answers, hi, HDFC top 200 does not qualify for tax deduction under section 80C.
Viswanathan asked, Which Infra Bonds a better option?
Sailesh answers, hi, most of the tax saving infrastucture bonds are comparable. There is hardly any difference in the features of these bonds aprt from the rating and the pedigree of the company issuing it.
suria asked, sir how about investing in NPS (New Pension Scheme) ?
Sailesh answers, hi, NPS is yet to establish its track record. Therefore, I dont recommend it as of now.
Sailesh says, We have run completely out of time. I thank you all for participating in this chat. If you have any questions which were not answered during the chat, please mail them to me at

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