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28 Answers

Right Investment strategy

Asked by: 247 views Mutual Funds

Hi, manish i am an engineering professional and a regular visitor of jagoinvestor.com. I really appreciate your efforts.

Recently i have taken SIPs of CanaraRobeco equity diversified and balanced fund(each 2000/month) and franklin india bluechip fund(1000/month). I have also invested a lumpsum of 12000/- in reliance GOLD fund.
My strategy is to have diversification with low risk.I have a 5-10 years of time span in mind.

Are my investments in the right place?

thanks

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28 Answers



  1. ashal jauhari on Feb 06, 2012

    Dear Waris, as of now your investments look good. Please continue with your SIPs. After some 18-20 months review the performance of your funds & if the performance is meeting your own requirement, keep investing else you have the option to change course.

    Thanks

    Ashal

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    • waris on Feb 07, 2012

      Dear ashal,
      thanks for your reply.
      My adviser always recommends funds from canara robeco and franklin templeton.
      When i checked their performance it was good.But later i saw that UTI dividend yield fund has given 13.8% returns in 5 years as compared to 10.7% f canara roebco.

      Same goes for Balanced fund where reliance and HDFC prudence have given better returns than canara.

      Thats why i want to know whether my selection is right?
      I forgot to mention that i have also taken SIP of Canra robeco tax saver fund(2.5k/month).
      thanks for your replies.

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  2. ashal jauhari on Feb 07, 2012

    Dear Waris, please do not chase returns in isolation. As I do not have your much details, I can’t comment for the selection of funds from Canara & Franklin only from your advisor.

    If you are not comfortable with the performance of your funds, the option of changing the path is always available to you.

    By the way, Yes HDFC Prudence is one of the best in the business.

    Thanks

    Ashal

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    • waris on Feb 07, 2012

      Thanks for the prompt reply.
      What details are required from my side.Will try to give you as much as possible.
      You can ask me.

      thanks

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  3. Ramesh on Feb 08, 2012

    In my opinion, Franklin Templeton AMC is the best management team in the MF industry. I dont follow or have analysed Canara Robeco AMC.

    Ramesh

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  4. ashal jauhari on Feb 08, 2012

    Dear Waris, The info from you –

    Your age,
    Size of family
    Your mly &/or yly income
    your mly expenses
    loan liabilities
    current assets & investments
    your current mly savings
    & many more

    Thanks

    Ashal

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    • waris on Feb 08, 2012

      Here is the info-
      age-26
      Size of family-3 dependents(spouse+parents)
      Your mly &/or yly income- 45k/month
      your mly expenses-25k
      loan liabilities-None
      Assets-1L,
      investments12000Rs monthly RD with SBI started last year.
      current mly savings-20k
      No insurance yet.

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    • waris on Feb 14, 2012

      Dear Ashal,
      Do you need any other information?
      Kindly tell.

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  5. ashal jauhari on Feb 15, 2012

    Dear Waris, What about health insurance, do you have any either own or provided by your employer?

    For 45K mly income, please purchase a term cover of at least 75L Rs. to cover current & future financial liabilities. If you opt an online cover, the prem. ‘ll be around 7-9K Rs. only.

    Thanks

    Ashal

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    • waris on Feb 15, 2012

      Dear Ashal,
      My employer provides an insurance of 10L. I am planning to take postal insurance of 10L (i am a government employee) and also plan to take a term plan.Is it ok to go with online plans as i heard that for people who have less knowledge about the insurance its better to take offline plan!

      I plan to save 20k/month(including the premiums for insurance) .now can you please give some advice.

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      • waris on Feb 15, 2012

        Regarding health insurance ,my employer provides unlimited health insurance for me and my dependents (my father is a dependent but not my mother as she is not yet retired.)

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    • waris on Feb 15, 2012

      My employer is deducting 4k/month towards NPS.
      I also own a PPF account (for tax saving). I have to do 52k saving to reach 1L(1L-4*12=52k).last year i had done all the savings in PPF alone.

      To be more clear out of 45k i have 20-25k/month max for saving (including those for tax saving).
      currently i am running a RD of 12k with SBI , so left with 8-13k to invest.

      So started the SIP’s as mentioned in the first post(2+2+1).

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  6. ashal jauhari on Feb 16, 2012

    Dear Waris, For current please invest the remaining amount in PPF to complete 1L figure. At the same time, Please start a sIP of 4K Rs. in HDFC Tax saver fund.

    Thanks

    Ashal

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    • waris on Feb 19, 2012

      Dear ashal,
      thanks for your reply.
      For fin. year 2011-2012 i put most of the amount in PPF(40K) and 10K in ELSS(CR).

      Now i am aiming for 2012-2013.
      As i mentioned i can invest 20k/month.
      Now i have 3 goals
      1.Tax saving-Here 40k i being deducted for NPS.I am left with 60K.
      2. Long term investment-For buying a house(10 years).
      3. retirement planning
      4. Short term investment for my sister’s marriage(1-2 years)
      5. Medium term investment-For other goals such as buying car

      I will say my risk appetite is medium.

      Presently for the goal 4 i had started RD of 8000/month (1 year), which has completed 7 months now.

      For goal no-5 i had started an RD of 3800/month (2 years).It has completed 4 months now.

      I have just started the 3 mentioned SIPs(5k/month).
      Can you please recommend me some investment for other goals and review the present investment.

      Kindly also comment regarding insurance.

      thanks a lot.

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  7. ashal jauhari on Feb 19, 2012

    Dear Waris, if you are not comfortable with the idea of online insurance, you may go for offline term plans. Why you are opting postal insurance for your investments?

    Regarding NPS, 4K mly converts into 48K yly, so how come your remaining limits is 60K? Please check & confirm the same.

    Do you have any pin pointed figure for Sister’s marriage goal?

    As of now RDs are ok for both goals – Marriage & Car purchase.

    Thanks

    Ashal

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  8. waris on Mar 04, 2012

    Dear ashal,
    PLI is offering 65 Rs bonus/1000Rs(per year) insured which is far better than LIC or any other endowment plan in market.Their premium rates are also lesser.

    You are right i had 52k to invest for tax saving.

    Regarding my sister’s marriage i want to help my father by contributing atleast 2-3L.

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  9. ashal jauhari on Mar 04, 2012

    Dear Waris, can you please quote the prem. & the sum assured for that PLI policy.

    For sister’s marriage, as & when it happens use both RDs (sister as well as Car) to use that amount for the desired purpose. Once this requirement is over, you may start investing for Car purchase.

    You skip the question that NPS is 4K mly so your NPS yly value is 48K & not 40K…… So your actual need for investment in 80C for remaining part is just 52K. Please check the same & confirm

    Thanks

    Ashal

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    • waris on Mar 05, 2012

      You are right NPS value is 48K and remaining is 52k.

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  10. waris on Mar 05, 2012

    The premium will be as follows:
    My age-26
    Sum assured 10L
    Maturity age-45 premium=4200/month
    Maturity age-50 premium=3200/month
    Maturity age-50 premium=2600/month

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    • Best Answer


      ashal jauhari on Mar 05, 2012

      Dear Waris, for that 4200 Rs. prem. you may purchase around 40-50L term cover from online policies. So out of 12 mly prem. of 4200 Rs. or say 5000 Rs. yly you may get five times of your current cover of 10L offered in this PLI. Now if you opt to invest those remaining 11 prem. i.e. around 45K Rs. yly or 4100 Rs. mly in simple product like PPF, your final return ‘ll be far higher than this PLI, do not go for my words, calculate on your own.

      Thanks

      ashal

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  11. waris on Mar 05, 2012

    Here is what my calculation says:

    For 19 years of investment in PPF at 4100/- month i will get 23,80,292 at a rate of 8.6%.

    PLI- 65000/- per year for a 10L policy will come to 12,35000 as bonus + 4200 x 12 x 19 (957600/-)=21,92,600/-

    My only doubt in PPF is that the returns from PPF may become taxable in Direct tax code.

    Kindly correct if any mistakes.

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    • ashal jauhari on Mar 05, 2012

      Dear Waris, you mean to say DTC is going to put PPF in EET mode & that PLI in EEE mode? my dear friend, it’s not going to happen. That controversial part of PF & PPF EET status has already been dropped by the GOI of India in DTC version 2. Still DTC is merely a talk & no walk on the path. So decide on your own. & by the way one important thing – in between during these 15-20 years, if claim happens, how much your family ‘ll receive as death benefit in that PLI & how much in that term cover?

      Thanks

      Ashal

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      • waris on Mar 06, 2012

        Dear ashal,
        I really agree with you on this point. i can buy an insurance of 40L with same money and still get around 24L.

        Can you please suggest some good offline term insurance plans.

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  12. waris on Mar 06, 2012

    i am skeptical about online term plans. Is that OK.

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    • justgrowmymoney on Mar 06, 2012

      Once the plan has been issued no one would differentiate between an Online and an Offline plan.

      Offline plans are expensive because INsurance companies have to pay the commission to the distributors/agents for selling the term plan. Most such costs (including scanning the income/address proof documents) are avoided in an Online plan which makes it less expensive but provides the same coverage as its offline counterpart. THere is no need to be skeptical about the online plans

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    • ashal jauhari on Mar 06, 2012

      Dear Waris, It’s ok to purchase offline term plans if you are not comfortable with online plans. Please check from the following insurers –

      ICICI PRULIFE – I-CARE offline mode
      HDFC LIFE – Click to Protect offline mode
      SBI Life – Smart Shield
      Aviva
      Aegon Religare
      Bharti Axa

      Please opt from the above list based upon your own comfort level. I’m not asking to put weight on prem. charged.

      Yes at the end, there is Big Daddy to fall back up on – LIC – Amulya Jeevan for 25+L cover.

      Thanks

      ashal

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  13. waris on Mar 07, 2012

    What are the riders you will suggest.

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    • ashal jauhari on Mar 08, 2012

      Dear Waris, personally I w’d prefer to purchase plain policies for Accident cover as well as critical illness cover. Due to limited coverage provided by Riders & being one time affair I’m not interested for Riders except for Waiver of Prem. Rider provided with some of Term Plans.

      Thanks

      Ashal

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