MF Investment Help

Please Advice

Posted by : radhika_nandlal

pcspune,

Thanks a lot for the clarification, then i will keep off ETFs altogheter... with commodity training its best to buy commodities which dont get stale lol and with nifty its best to trade large caps everyday instead of invsting in them.

Please Advice

Posted by : Bhavani27

Dear Ashal:

Here is what I had posted about a week ago on this subjet on the \\`Market Outlook - Short term\\` Board in a thread The Structured Products Case in response to a cryptic post by MMB Messenger.

Posted by: Bhavani27 on (21-Aug-08 18:26 )


These are customised products that include derivatives, stocks, bonds and debentures, and some such investment strategies bindled together. Although these products were initially made available to cater to the needs of high net worth investors, they are now being offered to retail investors as well. To that end, the concept of structured products is relatively new for retail investors.

Terms like derivatives, paired trades and equity-linked debentures among others, have enticed a lot of investors into investing in these products. A strong marketing pitch by fund houses combined with fancy terms/investment strategies leads them to believe that structured products are superior to regular mutual funds. However, there are certain elements that investors need to consider before investing in structured products.

Investments in instruments like structured products should be made only after there is a clear understanding of its investment proposition, risks involved and the returns projected. If the investor can unravel the structure and can take on the risk for that additional return, then he can consider investing in them. The investor who finds the process of evaluating them difficult, must render the services of a competent financial planner and take a well-informed decision accordingly.

SARVAM KRISHNAARPANAM
Bhavani

Investment for Daughter Education ?

Posted by : sarabjeetsethi

Dear Raj

Appreciate and thank you for your reply , your suggestion is very valuable and I 'll be considering same while Investing. Am very grateful to you that yoy have taken your precious time to reply to mine query, if you dont mind please explain in detail about the Growth adjusted plan which makes more sense as every year we got incriment in salary and will not hurt the pocket that much

Thank You very much once again and God Bless all of us !!

Best Regds
saby

Investment for Daughter Education ?

Posted by : vvrk

Dear Saby,
Please review the information that I have provided and let me know your feedback.

For College
===========
Cost Today = Rs.2 Lakhs
Time to College = 10 years
Inflation adjusted cost after 10 years = Rs.4,31,785

For MBA
=======
Cost Today = Rs.7 Lakhs
Time to MBA = 13 years
Inflation adjusted cost after 13 years = Rs.19,03,737

Assumptions
===========
Assumed inflation = 8%
Assumed returns = 15%


Vanilla Plan
============
The following is what you need to invest on a monthly basis every month.

For college = Rs.1,642/-
For MBA = Rs.4,278/-

The total amount that need to be invested per mount is approximates Rs.6,000/-


Growth Adjusted Plan
====================
If you think it might not be feasable to invest Rs.6,000 per month, then the following is your second option.

For College = Rs.9,48/-
For MBA = Rs.2,113/-

The total outgo the first year is approximately Rs.3000/-. But in this plan you need to keep increasing your investments every year by 15%. So the first year SIP amount is Rs.3000, second year Rs.3,450, third year 4,000 etc.

In the vanilla plan the investments are the same very year. In the growth adjusted plan, the sip investments increase by 15% every year.

Please do let me know which plan you would like to choose. Based on the plan you choose, I can come up with an investment plan.

Thank You,
Raj

Investment for Daughter Education ?

Posted by : kentmss

Dear Sarabjeet,
Congratulations, for being foresighted and already planning for your daughter's education. You are also lucky being advised by such experts like raj, ashalanshu, ranjan, etc.
Please avoid ULIPs. They are very expensive and not transperant. Go for good Diversified Equity Funds. Preferably through SIPs. For your need of 16 lakhs in 10 years, at a assumed return of 18% per annum, you need to invest monthly 5200.
Your present portfolio is good and you can stay invested. However, it lacks Solid Large Cap Funds and you can consider investing in the same through SIPs, which will help achiever your goal faster.
While combining insurance and investment is definitely not advisable, you can certainly consider investing in DWS TAx Saving Fund, which has given a good account of itself in its short history. Investment in this fund will get you 5 times Free Life Insurance of your Investment Amount.

You can also consider investing through Century Sip Plan in Birla Mutual Fund schemes. This offers your upto 100 times Free Life Insuance of your monthly Investment.

With the above in mind, I recommend you to invest in the following funds
Birla Sunlife equity Fund
DWs Tax sAving Fund
DSPML Natural Resources and New Energy Fund
Fidelity Equity Fund
Sundaram Select Focus Fund

From your present portfolio, you should
HDFC Equity - Switch to HDFC Top 200 Fund
ICICI Infra - Switch to ICICI Dynamic Fund

Before committing to any sip, first insure yourself adequately with TERM Insurance, which is cheap and effective way of insuring yourself.

Best of luck,
Srikanth Shanakar Matrubai

Investment for Daughter Education ?

Posted by : pcspune

Dear sarabjeetsethi.

You may consider SIP Insure in Reliance Growth Fund.

Centuri SIP in Birla Frontline Equity is also GOOD Option.

SIP in KOTAK -30/Kotak Opportunity Fund under KOTAK Starkid( With Free Insurance )

For Tax Saving Investment in DWS Tax saving Fund (with Free Life Insurance upto Rs. 5 Lacs is also Good Option.

P.C.Sharma

Invest via SIPs, don\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\`t time mkts: Franklin Templeton

Posted by : niruvijay

Dear sir I m 40 yr old and I have need some money after 5-7yr at the time of my beti marriage and I able to invest 1000-2000 pm. which scheme and mf is better for me. I m regularly investing stock market but not yet invest in mf. also tell me about ur saving of entry load way.

Stay away from new funds: Value Researchonline

Posted by : RANJAN

It is a closed ended scheme. The exit load is heavy if you come out within 3 years. If you do not require the money now - stay invested and pray that the fund will do well. Never go for NFOs and especially closed ended schemes. Go for good value research rated funds. (5* or 4*) Invest ONLY VIA SIP.

Transaction slip conditions

Posted by : Guest

Is it necessary for the investors to fill only the transaction slip of the AMCs for making any changes such as address, bank details, etc. A simple plain signed letter would not be sufficient? Please advise.

Stay away from new funds: Value Researchonline

Posted by : Guest

HI how is the future of KOTAK INDO WORLD INFRASTRACTURE FUND. I have invested some money in this fund. I am a long term player.Can you please advice me should i hold.

Invest via SIPs, don\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\`t time mkts: Franklin Templeton

Posted by : niruvijay

Dear sir I m 40 yr old and I have need some money after 5-7yr at the time of my beti marriage and I able to invest 1000-2000 pm. which scheme and mf is better for me. I m regularly investing stock market but not yet invest in mf. also tell me about ur saving of entry load way.

Please Advice

Posted by : ashalanshu

Tax angle
Since most of these structures fall under the category of debt products, they are taxed as such. Most of these structures are long term. Under the present Income Tax rules, for a residential Indian, the gains are taxed at 10 per cent without indexation benefit, and 20 per cent with indexation benefit. Add to it the surcharge which is extra.
It would be prudent to explicitly check up with the product manufacturer in advance whether the indexation benefit would be available on the structure or not (as it is not available in case of some structures).
The risks
Although the sales pitch of these structures may imply that they offer a high return with no risks, that is not true. The major risk of purchasing such a complex product would be to not understand it completely, to not weigh its pros and cons, and cannot evaluate whether it fits into your portfolio. Since these are close-ended products, they carry a very high exit cost. Some products may not offer the exit option at all. So, purchase it only if you intend to stay with it for the entire tenure.
In the present scenario where the structures are highly complex, only the knowledgeable investors, who can decipher them and understand their implication on their portfolios should invest in these products. They may form a small part of your overall portfolio, but not a very significant part. Before moving to such an asset class, you may also explore other avenues that are more transparent and less complex.