Help deciding first investment and financial planning

POSTED BY Varun Roy ON July 1, 2012 8:47 pm COMMENTS (8)

Hello My name is Varun. For the past 6 months I have been following your blog, your book and other finance resources. I am 25 years old and want to start investing now.
I am not married, no kids, no responsibilities.
My income 40,000 Rs
I am thinking
DSPBR Top 100 Equity Inst-Large cap
Quantum Long Term Equity- Large and mid
IDFC Premier Equity- mid and small cap
HDFC balanced or prudence ? confused? Also should I even do it ?
I can’t decide a multicap. HDFC seems too aggressive and too much hyped. Risky downside capture. However low fmc
DSPBR equity seems like a good bet but then in the latest value research online’s top rated funds it doesn’t find a mention.
I need something for the bull runs. Can’t decide! help
I am thinking following as well
1. one tax saving instrument maybe canara robeco what say ?
2. demat account as well for quarterly gold etf. Which one reliance , hdfc or sbi ?
3. how to introduce debt in my portfolio ?
I used jago investor calculator to calculate sips requiremt for following goals ?
My goals are 5 years-3 lakhs-sip of rupees 4790 increasing sip yearly by 10% growing at 10% (vacation )
In 10 years- 5 lakhs- required investment Rs 3201 increasing sip yearly by 10%home renovation )
In 12 years – 10 lakhs-Rs 4995 increasing sip same as above
In 15 years- 15 lakhs –Rs 5321 increasing
In 20 years – 30 lakhs –Rs 6629 increasing
Total = Rs 24436 monthly
For the earliest goal of five years do you suggest debt based like short debt fund or balanced fund ?

8 replies on this article “Help deciding first investment and financial planning”

  1. Varun Roy says:

    hey thanks ashal for all the replies ! really appreciate !

  2. Varun Roy says:

    @ ashal : thanks man much appreciate ! i will start that way .. but just to be clear you do reccoment investing in various funds like large cap , mid cap, multi and small right ?
    or do you also suggest its best to keep it to 1 or 2 large caps ?

    so you dont recommend a debt fund eh ?

    also one last thing if i take up sip right now how easy is to modify it later in terms of amount as per needs. I have more available money right , after my marriage in most probability there shouldnt be a problem but worse case if i ahve to reduce monthly sips , is it easy to do that ?

    1. Dear Varun, From your own query, you are following forum for past 6 months or so. Had you seen a consistency in the replies from us – Me, Dear Ramesh, Dear BanyanFA, Dear Justgrowmymoney, Dear TheZion View & some others?

      Most of the time we recommend to keep the no. of funds very limited. As you are starting, I recommended only 1 fund – QLTEF. Being a multi cap, this ‘ll provide enough diversification to you across the market cap. Just have a KISS – Keep it simple silly.

      Regarding PPF chosen over a debt fund. Well read my reply again, Tax benefit + good assured rate to create a solid foundation. Can you create a huge building (read a huge corpus) with out a solid foundation?



  3. Varun Roy says:

    @ashal-Hey right now I ddon’t have any exoenses as I live with my parents !
    I will get married next year though I think with my and wife’s combined income I can easily afford 20 grand a month for investment uptill we don’t have a kid.
    My father had brought a 5 lakh health cover for me and that’s what I have right now.
    @Ramesh – but what about having different resources to tap like probably one small and mid caps. Ddon’t they have have a lot of potential for future . and I want to surely keep the core strong. But have like minority in 1 or wo funds which have the potential to grow tomorrow.
    And when I said bul runs I dint mean I was timing the market. If I had to I would say something like “when will it be a good time to invest after which market will peak”. IIt’s a known fact that markets will do both good and bad and when they do I just want to have something that can capture the benefits. I might be wrong but tthat’s what I have read so far.
    I don’t necessarily need a debt fund as I don’t have any such short term goals but I was thinking its best to have some money in less risky place which I can utilize if the need be.
    Also for the goal of 5 years I was thinking its good to have some portion in a balanced fund or a debt fund as 5 years is long enough to get some equity returns but it might be suitable to have the rest in debt or balanced. Whatsay ?
    appreciate both you taking out the time to reply !
    thanks much

    1. Dear Varun, As the health insurance issue is solved. Please go ahead on investment part of uyour query. Where to start?

      Please invest a lump sum amount say 15-20-50K in Quantum Liquid fund. Do STP from there on weekly basis of say 2K Rs. in to Quantum Long Term Eq. fund.

      Regarding debt part of your portfolio, I w’d recommend PPF which ‘ll do both – providing tax benefit as well as protection of debt.



  4. Ramesh says:

    I dont really know how you have selected these funds.

    My views:

    1. Go with 1 or max 2 funds. My choices from your list: DSP Equity (even alone is fine) and Quantum Long Term Equity. But mostly, depends upon how you are purchasing. Managing things in an easier manner is far better than a complicated method. 12k in each is good enough. Add Quantum tax saver (which is just a proxy of QLTE) for tax saving according to your tax liability.

    2. No Canara Robeco, in my opinion. Their fund manager has put in his papers. So, not a great team, not a senior fund manager. Too risky scenario.

    3. Do not go with the fund ratings of VRO or any other.

    4. Something for bull runs. So, you need pseudo-timing of markets. No one has been able to time the markets consistently, and you want to time a bull market. Way to go in learning.

    5. To introduce debt. Get a flexi debt MF (Templeton Income Opportunities and/or BSL Dynamic Bond). But first consider why you want debt in your portfolio? During bull runs, you will always sulk why you bought debt!!

    4,5 is kind of oxymoronic in your case.

    Continue learning and investing. Start NOW and modify later on.


  5. Varun Roy says:

    please ignore the “inst” with dspbr .. wrote it by mistake @

    1. Dear Varun, May I know your mly expenses, health cover. I’m not asking for life cover as I feel you do not require life cover at this stage.



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