FINANCIAL INVESTMENT ADVISOR SMITA CHANDIRAMANI OF TULIP INVESTMENTS REPLIES TO QUERIES

George asked, Hello Smita , I am an NRI, and I have Rs.10 lakh as cash, ready to invest. Pls advise me on the best course of action Smita Chandiramani answers, Hi George, if u hv a clear 7-10 yrs horizon to invest this money, then I would suggest tht u can invest majority of this money into large cap diversified at current levels of the mkts. Over this tenure u can expect to make an annualised return of around 16-18%.
pramb asked,  I am trying to build portfolio via SIP of 12000 in HDFC TOP 200(large Cap), DSP BR TOP 100(large Cap), Birla SL Forntline Equity(large Cap), Sundaram Select Focus(large Cap - Aggresive and risk), Reliance Growth(mid-cap) and ICICI PRu Infastructure(sector) and one GOLD ETF Fund. Please suggest whether these are right choicesSmita Chandiramani answers, The portf seems gud
BM asked, We are husn=band wife 37 years each earning 70k per month together. We have cash savings of approx 6-7 lakhs What instruments would your receommned for a approx return of 12-15% per year we have a daughter of age 4.5 yearsSmita Chandiramani answers, U will need to maintain higher allocation to equities. Assuming a return of 16% in equities over the long run and 6% tax free return in debt, u will need to maintain a 60(equity):40(debt) ratio to make a 12% return over the long run. In debt u can look at PPF and bank FDs. For equities u can look at diversified equity MFs.
sam asked, Dunno why guys make statements like 'U should immediately get urself an adequate TERM Insurance cover'... First question should have been is father retired... If so does he get a pension... If so how much... Then next set would be u r 29 years of age meaning you have worked for 7-9 years... So what are your savings... Then blah blah blah... My 2c Smita Chandiramani answers, Dear Sam, there is a reason for the word 'ADEQUATE' being mentioned in the sentence. As complete info is not provided, it is the responsibility of the individual to estimate the amt of insurance reqd. This amt can also be zero, i.e in case there are existing financial resources available with a person, then insurance cover may not be needed at all.

Sameer asked, Maam, My PPF Account is about to mature. Where can I park lumpsum money with risk free rate of interest without being taxed on returnsSmita Chandiramani answers, U can keep extending the tenure of amt lying in PPF in blocks of 5 yrs. U can keep the money there as long as u want. Returns there r not taxed.

asf asked, i would like to invest INR 5000 per month through MIP. Can afford medium - high risk. Suggest me a good mutual fund and scheme.Smita Chandiramani answers, It is SIP. U should invest into 2 funds from among options like HDFC Growth, DSPBR Equity, Reliance Vision, Sundaram Select Focus, etc.

ajay asked, We have bought a apartment. It is registered with my father's name and I am paying some percentage of money for this apartment. I am paying proper income tax to Govt of India on my earning. Is there any complication due to Income Tax point of view in this process as I am paying some money on behalf of my father ? Does he need to declare this thing somewhere or it is absolutely fine for son to pay the money on behalf of his father. Smita Chandiramani answers, Hi Ajay, there should not be any problem in ur case. The money given to him can be shown as gift. There will be no problems on the tax side.

v asked, have 5 lacs in pf and ppf/ 20 lacs in mf and 10 lacs in equity. like to retire in 10 years looking at 2 cr. kindly advise if i invest another 20 k per month for next 10 years is ok. life span is 80 yrs. family of three .Smita Chandiramani answers, Assuming u invest around 20K p.m. for the next 10 yrs over and above the existing 30L equities, u should be able to accumulate 1.8 Cr. So if u include ur debt part, u maybe able to achieve ur 2 Cr trgt.

ram asked, would you suggest investment in reliance diversified power sector? is it too risky? can we dedicated a small amount to it?Smita Chandiramani answers, Hi Ram, the core part of ur investment portf should consist of large cap diversified Funds. In case u understand a particular setor well and wish to hv higher presence in it, u can allocate a small portion (say 5% of portf) to that particular sector using a sector fund.

saurabh asked, i want to know about govt. new pension scheem. can u help? Smita Chandiramani answers, http://www.pfrda.org.in/writereaddata/linkimages/Offer%20Document957798914.pdf This link will lead u to the offer document which contains all details regarding the NPS. It provides gud clarity on the entire scheme.

ased asked, hi sridhar whats ur view on index funds .which one do you recommend .I am investing in diversified mf .should i stop and invest only in inex funds or etf ? which is better index funds or etf ? Smita Chandiramani answers, It is definitely a gud strategy to build the core part of ur portf using Index Funds. If ur horizon is long term, the both ETFs and Regular Index funds should be gud (as from Aug'09 entry loads r abolished). In case ur existing funds r large cap funds then there is no need to replace them.

venkat asked, are children's eductation plans any good or is it better to for diversified mf ? Smita Chandiramani answers, Dear Venkat, the cost structure in Children's Edu Plans r generally higher. Due to this the long term returns take a hit. It is much wiser to build funds thro diversified MFs. In case of MFs invest the money on ur name and add ur child as the second holder where ur spouse is the gaurdian.

Koti asked, I am 32 with my wife(not working) and two kids (4, 1), Investing 14000 in MF (Reliance Growth, HDFC Equity, Fidelity Equity, Franklin Templeton Bluechip, SBI Magnum Umbrella -Contra), 30000 in PPF, 66000 in LIC (Jeevan Anand). My monthly income is 60000 Rs. My monthly house hold expenses are 25000 Rs. How is my financial planning? Please give me necessary suggestions. Smita Chandiramani answers, Hi Koti, get urself adequate TERM Insurance cover immediately. Once u hv this u should relook ur LIC policy. It maybe a better idea to divert part of this money into ur PPF a/c. Ur MF portf is gud. Ur savings ratio is gud.

00 asked, Dear Maam, do we get a tax benefit if we purchase a residential plot, instead of a residential house ?Smita Chandiramani answers, No, just for a plot not tax benefits. But if u construct a house on this plot within a specified time u can then get tax benefits on the housing loan taken for the purpose.

Jyothi asked, Hi Smita, I had invested in the MF Franklin India Prima fund Rs. 1,10,000 (Monthly SIP for 3 yrs. Ended in July 2008) I want to change the allocation in FTI Prima to FTI Prima Plus, through an STP. But I’m not sure when to start because the returns from Prima is currently negative. Do I wait till I atleast break even before starting the STP? More importantly, is my decision to change the allocation to Prima Plus a valid one? Or, do I hold on to Prima for some more time? Smita Chandiramani answers, Hi Jyothi, is this the only fund in ur portf? If yes, then invest into a large cap fund thro a SIP in future. It maybe a better idea to hold onto Prima fund and switch it entirely when mkts r at relative highs. This may take a few years. In case u hv other large cap funds in ur portf u should continue with the SIP.

Abhishek asked, Pls suggest me some good short term debt funds for investing for 1 year.how much gain can I expect from them?Smita Chandiramani answers, Hi Abhishek, for a 1 yrs horizon, the best option is to invest into a bank FD. There is a chance that in future there maybe some hardening of interest due to which debt funds may not give the best returns.

terd asked, Maam , for my 2 yr old son, i have invested in max new york life insurance and also opened a kids a/c in bank. What more investements can u advice like LIC , etc??Smita Chandiramani answers, Hi, it is not the best option to invest for ur child thro Insurance based investment options. A bank a/c is a gud idea where u teach the kid the virtue of savings. To build a decent fund for their future the best option is to invest via diversified large cap equity oritented Mutual Funds.
pramb asked, how good is Reliance Growth, Sundaram Select Focus Smita Chandiramani answers, Both r well managed funds and hv done well in the past. Reliance Growth is more focused towards midcap stocks. Sundaram Select Focus is focused towards Large Cap stocks.

nicky asked, Hi VS: i am 29yr old & only earning member of my family, father retired, mother house wife & my wife is also house wife, have 1 baby of 2yrs.......i manage to save rs. 15000/- per month after all expenses ......have opened ppf account + LIC of about 50000/- per year, please suggest a good risk free investment idea's....thanks Smita Chandiramani answers, Hi, U should immediately get urself an adequate TERM Insurance cover. U can get quotes from ICICI Pru Pure Protect, Reliance TERM Plan, Kotak TERM Plan, SBI Shield, etc. U need to build a balanced asset allocation plan which would enable u to grow u money at a rate faster than inflation. This would enable u to fulfill ur future responsibilities and needs. For this u must invest some part of ur long term savings into Equities thro Mutual Fund route. Of the 15K start with a 5K mthly SIP into Equity MFs with a 10-15 yrs horizon.
vicku asked, Which bank gives the best interest rate for FD for 2 years term?Smita Chandiramani answers, The interest rate would vary based on the amt u wish to invest. The difference in rates will be marginal. PSU banks should be offering close to 8% for a 2 yrs period.

AMAR asked, Heloo Maam, pls tell me I want to invest 1Lac ruppees (either in Mutual Fund or in Share Market), pls suggest me for Max return where I have to invest. I can wait for long time also.ThanksSmita Chandiramani answers, Hi Amar,making consistent higher return should be the focus and not the best return. It is best to stick to large cap stocks or Mutual Funds which invest in them. In case u wish to invest thro MFs u can look at HDFC Grwoth, DSPBR Equity, Reliance Vision, etc...

Dinesh asked, Hi, At age of 30, i am investing 20,000/- per yr. in PPF & NSE each,43000 per yr in LIC policies(Jeevan mitra tripl.cov) , 11000 SIP in diversied MF. Is it a good portfolio. What are good MF for 15yr horizone, ThanksSmita Chandiramani answers, It is better to invest thro PPF and discontinue NSC. Create an emergency fund which also covers around 6 mths of living expenses, and keep it in a safe place like a bank FD. Getting ur self adequate TERM Insurance cover is recommended. Once this cover is in place u can review ur LIC policy. Invest money with a long term horizon (10 yrs or more) into diversified MFs like Reliance equity advantage, HDFC Top 200, DSPBR Top 100, Sundaram Select Focus, etc to build funds for ur needs like children’s future and retirement.