Ramnarayan Nag asked, Good day Mahesh.. I want to know about S.I.P. and what is the minimum amt that i can invest.
Mahesh answers, hi you can start an SIP with min of Rs 500 per month
Pankit Shah asked, Which is best in the current scenario? gold or fixed deposits or equity...I need the money after 5 years
Mahesh answers, hi, in my view it is better to have a diversified portfolio made of equity, debt and gold. Ideally allocation to gold should be capped at 15%. The rest can be invested between equity and debt in line with your risk appetite and investment horizon.
Naveen_S_Menon asked, Hello Mahesh.. I want to maintain my emergency backup fund. My salary is around 50 K and my expenses and monthly savings put together around 35K.I would plan for a marriage in an year or two. so in the given scenario where should i park my Emergency fund and what should the amount be.
Mahesh answers, hi, your emergency or contingency money should be kept in savings bank account. Alternatively, you can invest in liquid funds. these give slightly higher returns than a savings bank A/c. Liquid fund investments are safe.
Vikas Dar asked, Dear Sir ,I invested money in following fund. HDFC top 200, DSP BR top 100, Reliance growth, HDFC Balance fund, Tata infrastructure, ICICI Infrastructure, SBI magnum, reliance Tax saver, HDFC tax saver. Kindly suggest
Mahesh answers, hi, overall your portfolio looks good though I am not a fan of sector/thematic funds. Sector funds depend on the underlying sector for performance. I would rather invest in diversified equity funds. You can consider HDFC Prudence fund instead of HDFC Balanced fund
Arun M asked, there is excess money lying in my saving account 3-4 lakhs i keep it in case is buffer any derivative option loss or huge margin requirement due to fluctuation in the market. Any suggestions on this
Mahesh answers, hi, i would suggest that you invest the money in liquid plus funds. These funds offer a slightly higher return than savings bank account
Pinto asked, I have SIP of Rs 3000 each for HDFC Top100,Reliance Growth, DSP Blackrock Top100,Sundaram Midcap, IDFC premier and it is for long term of horizon 15 to 20 yrs. Please advise should i keep it or redeem it after 10 to 13 years .
Mahesh answers, hi, your selection of funds is good. Continue with your investments. 10-13 years is a good time to invest in equity funds. I am sure you will build wealth for yourself in years to come. Please keep booking your profits at regular intervals and invest in line with your risk appetite and asset allocation
Samrat asked, Hi , I am an NRI I have 20 million rupees and would like to invest it in a way that after my return to India in a couple of months I should be making at least an income of 2 lakhs per month.
Mahesh answers, hi, your post tax return will have to be at least 8.3 p.a.% to generate 2 lakhs every month. As of now bank offer FDs in the range of 6.50% -7.50% p.a. This is pre-tax. In my view you will have to settle for lower income until the deposit rates move up
Rajiv asked, Dear sir, I need to start the investment using SIP in HDFC top 200 fund is this the right time to jump or shall i wait for some downside in the market
Mahesh answers, hi ,there is never a right time to invest in equity markets. Equity markets will always be volatile. Hence, the preferred mode of investing should be SIPs so that you can invest a fixed amount every month and not bother about market timing. Also, SIPs should be done continuously for at least 5 years to see the benefit of Rupee Cost Averaging
BHARAT asked, dear Maheshji, i want to invest in mutual fund which gives us low return but better than bank fd but secured will u please advise best income funds what about hdfc mip long term or similar other good performing income funds income
Mahesh answers, hi, Debt funds are an alternative to bank FDs but the returns from debt funds are market linked. Debt funds give good returns only when the interest rates in the economy are on the decline. The returns are not assured unlike bank FDs. MIPs are essentially debt funds with some equity exposure which can be in the range of 10%-30%. If you are willing to take some risk and invest for 24 months, then you can consider MIPs. Again, MIPs do not offer any assured returns
Arindam asked, Hi, want to invest 20K in KVP....is it a wise option?
Mahesh answers, hi, KVP offers 8% for 8 years and 7 months. I would not be willing to lock in my money for 8 years. Ideally you should lock in your money for not more than 2 years. Interest rates are likely to go up in the immediate future, I would recommend that you wait for few weeks and look at a one/two year bank FD
Goyal asked, How is the combination of a term plan and private fix deposits which offer more than 12% over three year period?
Mahesh answers, hi, banks are offering FDs at the rate of 6.5% -7% p.a. Company FD fetches a slightly higher rate because of higher risk. 12% p.a. seems to be on a higher side, I would strongly recommend that you study the financials of the company thoroughly before lending any money to it. Term plans are the best option as far as insurance is concerned.
S Khan asked, Hi, i have redeemed 1 lac rupees from a mutual fund scheme, the investment is more than 2 years old, what tax rate would apply on redemption, I am in greater than 5 lac slab/rgds
Mahesh answers, hi, if you have redeemed a equity /balanced fund, then there is no tax on the long term capital gains. I you have redeemed a debt fund, then you will have to calculated the tax as follows: 10% without indexation or 20% with indexation, whichever is lower
Meghna asked, HDFC TAX SAVING OR ICICI TAX PLAN. WHICH THE BEST ELSS
Mahesh answers, Among the 2 you have asked, I would prefer HDFC Tax Saver
Simon Dsouza asked, I am paying insurance premium of Rs. 5 lakhs per annum. This is all started in the last five years. I now realize, these premiums have no much return. Is it worth to stop this and invest the same in mutual funds. I may loose lot of money too?
Mahesh answers, hi, you seem to have invested in a ULIP which charge very high administrative fees in the initial years. Hence, you don't seem to have made any significant gains in the last 5 years. I would advise you to stop paying further premiums and instead invest in well managed diversified equity funds.
P Pandeasked, i have to save rs.15000 more to fully avail the tax saving under section 80C. Can you please tell me in which ELSS Schemes should i invest?
Mahesh answers, hi, invest in Franklin India Tax shield, its a predominantly large cap fund and its performance has been consistent since its inception
Ravi K asked, have just sold a big flat and need to invest it. the property was 7 yrs old and was in the name of my mother. please advice me on high return investment
Mahesh answers, hi, if you are willing to pay the long term capital gains tax of 20% and willing to invest in high return investment then nothing like equity funds. Please note that equities have the potential to generate higher returns with higher risk. The returns are not assured, your investment horizon has to be at least 5 years. As an alternative, you can buy another property in an area which looks promising from future point of view. Also, you can save the long term capital gains tax of 20% which you otherwise will have to pay
Khaslo asked, Is it good to invest in RELIANCE GOLD ETF in the present market condition?
Mahesh answers, hi, it is widely expected that gold will continue to do well in 2010 as well. Invest in gold with a perspective of insurance, as a means to diversify your portfolio. An allocation of 10-15% is ideal. Decide on a fixed sum of money to invest in gold every month.
Mithun Sharma asked, Dear Sir, I invested money in following fund, please suggest. Reliance long term equity fund Reliance vision fund Tata infrastructure fund DSW Tax Saving fund Kotak 30 fund DSP BR Tiger fund Thanking you Mahesh
Mahesh answers, hi, your portfolio is not balanced. You have 2 infrastructure funds - DSP Tiger and Tata Infrastructure. I would advise you to add a large cap fund like Franklin India Blue-chip and HDFC Top 200 Fund to your portfolio
Suhas asked, I have three PPF accounts and investing 70k every year each of them. Is this right approach by looking new 2011 tax change?
Mahesh answers, hi, I am not sure about the final changes that will be made to the income tax act. You can continue investing in PPF till 2011. Once the Direct Tax Code is in place, you can take a call. If PPF is going to be taxed after 2011, then it may lose its attractiveness
Shankar asked, any good mutual fund with the power sector? With time horizon of 3 years?
Mahesh answers, hi, ideally you should invest in a diversified equity fund which can invest in sectors which look promising from future point of view. Sector fund's performance will be hinged to the performance of the power sector as a whole and hence carries high risk.
Sameer Mehta asked, Dear Sir, I'm about to have baby girl, where should i invest my money so the moment she turns 18 or eligible for marriage, i could regain my money. Please advise.
Mahesh answers, hi, since you will be needing the money after 18 years and assuming that you will spend on education and marriage, you need to start building a portfolio of equity mutual funds. 18 years is a long time for investing in equities. I would recommend that to start with invest in well managed diversified equity funds like Franklin India Blue-chip fund, HDFC Equity, HDFC Top 200 among others. Also, start investing a small portion of your savings (not more than 10%) in gold ETFs.
Mahesh asked, Dear Sir, Please suggest me any insurance policy which can give me good return with life security. I can invest Rs.10000/-pa. Regards, Mahesh
Mahesh answers, hi, In my view do not take insurance policy to grow your money. The main purpose of insurance is to protect yourself from the risk of any eventuality like death. If you are looking at returns then opt for mutual funds. Invest in a mix of debt and equity funds in line with your risk appetite
Cheatan Khopkar asked, IS THERE PPF AND ELSS COMES UNDER ON SECTION OF INCOME TAX?
Mahesh answers, hi, Yes PPF and ELSS qualify for deduction under section 80C
Swapnil Mukherjee asked, I would like to take a house in Mumbai in the year 2014 for which I need to save money for down payment, my salary is around 30K and my expenses + insurance + LIC= 14000, please tell me how can I make use of the remaining money to utilize maximum out of it till year 2014 as a down payment. Also I don't have any problem in keeping low liquidity in my hands as I don't have any liabilities.
Mahesh answers, hi, since you have 4 years to go before buying the house, I would suggest that you divide the amount between equity and debt. In my view you should invest 30% in equity and balance in debt. Since this is going to be your down payment, I would not recommend a higher allocation to high risk investment like equities even though you do not have any liabilities. for equities you should consider investment in diversified equity funds with track record of 3-5 years to show for. For debt bank FDs are the best
Akshay asked, I am an NRI. Which is a good option to invest in India for around Rs.25 lakh today - Mutual Fund or buying a flat and renting it out. What is your suggestion?
Mahesh answers, hi, the answer to your question depends upon the rate of return you can expect to earn from each of these investments. Equities over the long term i.e. 5 years and more can fetch you between 12-15% returns. The same for your flat will depend on what is your investment and ho much is your expected rentals going to be
Naveen_s_Menon asked, Hello When calculating your net worth is it correct to add your PF, Gratuity, Superannuation, pension etc to the same. Also i have a home loan so would it right to add the value of the house to the net worth before the loan amount is paid
Mahesh answers, hi, while calculating your net worth it is important to ad all your assets and investments like PF, Gratuity and Superannuation. If you have a home loan, it is a liability and should be reduced from the total assets to arrive at the net worth
Bikash asked, What is PPF? And how safe is this investment?
Mahesh answers, hi, PPF stands for Public Provident Fund. This a fixed deposit account and you can invest a sum of Rs 70,000 every year in to this account. Amount deposited qualifies for tax saving under section 80C. The interest offered by PPF currently is 8%p.a. compounded annually.PPF is a borrowing by state government and hence considered safe
Nathu Lalji asked, name best tax saving mutual fund
Mahesh answers, hi, you can invest in Franklin India Taxshield and Fidelity Tax Advantage among others
Shamoel Kagalwala asked, hello sir, I have taken a insurance on my wife's name. she is housewife. I have insurance on my name also. have I done any mistake in taking insurance in my wife's name?
Mahesh answers, hi, ideally the insurance has to be taken by the earning member of the family to protect the dependant members of the family in case of death of the earning member. Since the policy is already taken there is no harm. But if you are going to take any further policies please take them in your name, also pls b sure to go for term plans as these offer higher sum assured for lower premium.
Sandra Pereira asked, What changes may happen when the Govt of India implements Direct Tax code? How can we plan for that now? Actually i am planning to take house loan in 2012, how does DTC affect me?
Mahesh answers, hi, it is not very clear if the provisions of DTC will go through in the proposed form. If it does go through then there may be changes to the benefit offered for home loans. You will have to wait for another year before you get some clarity on the changes. If buying a house is priority for you then I would advise you to go ahead and buy.
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