April 14, 2013 11:44 pm
Can somebody help me on How safe is Muthoot capital Services debentures?Im talking about this http://www.muthootcap.com/debentures_bonds.htm
Dear Sachin, if 12% return is your target, please do not think of Debt as your choice. Please opt Eq. MFs for this kind of return.
Dear Sachin, no need to say sorry. What I meant was, you should tell that I want 8% or 9% or 10% return. Maximum return does not indicate any no. in that sense & that’s why it’s not possible to quantify any product for you. Hope you ‘ll understand this.
12% return per annuam is what im looking for..
Dear Sachin, risk return can not be more than Govt. backed securities. The moment you go for any non govt. security, the risk increases. Keep this thing in mind. If you are comfortable to risk your capital i.e. you may not get back even you invested amount, please go ahead & invest in debentures.
I’m unable to pick any meaning from your reply – Maximum percentage of Return.
Thanks for replying even if im giving unclear answers. Sorry for my faults. Anyhow i guess its better to end the discussion since i understood these non-govt debts are more risky
Dear Sachin, if an instrument gives good return, there should be a reason behind it in the form of associated risk. There is more to it, the income generated from debentures is taxable at your slab rate so these may not be the best vehicle for you if you are in 20-30% tax slab.
Do not compare the near risk free PPF with high risk Debentures as both are under debt class but are as different as chalk & cheese. Remember cheese here is PPF & Chalk is Debentures.
I do not know, what is your definition of good return. So can not comment.
Sorry for late response.
Good return means maximum percentage of return.
No harm in asking buddy. As you confess yourself that you are new to investment then better wait for sometime and learn more and more. When you feel confident of yourself then think of investing and if required take professional help. I was just like you one year back but after i found jagoinvestor i learnt a lot and now i am confident that i can take a wise decision on my own.
Few thins that i did were reading Manish’s books, articles and visiting the jagoinvestor forum everyday and looking at the queries. Also i read regularly the personal finance section of Times of India. Regularly watch CNBC Awaz program such as Your Money, Tax Guru and Zee Business D Street Ka Don and Bazar Shastra. Just do this for 6 months to 1 year and i think you will start understanding things yourself.
Bonds and debentures are for experienced investors. Unless you understand it thoroughly hold yourself.
Dear Sachin, why are you focussing too much on debentures? Any specific reason?
I guess debentures gives good return in short span of time. Am i correct or not? kindly reply.
Else kindly suggest few other things which gives good return(even if in long period of time . say 15 years). (have already started a PPF)
Dear Sachin, thanks for the update. Now do tell me, you opt for a gold loan from such gold companies & after getting a loan down the line, due to correction in gold prices (already corrected from the high of 33K to 28000 Rs. in INR terms), you do not see merit in continuing your loan. To recover the loan money, these financiers ‘ll be forced to sell the gold in market. Now as the basic interest of 24% was not earned due to default, can the company pay you (the debenture investor) the promised 12%?
Think & act based upon your own common sensical answer. 🙂
thanks for the eye opener. 🙂
Could you pls enlighten me on some of the debentures which i can safely( i mean relatively safely) invest? either private or govt?
1. Invest in what you can understand, not what Ashal or me or anybody else does.
2. If you do not understand, learn more and use a professional management team (hint: use Debt Funds)!
3. Yep, and still learn more.
Im a newbie in investment field. Thats y im asking questions again & again. Sorry about that. About learning myself, have read Manish’s books and his forums. But i know wht i learned is zero% of investment field.
The only way to learn is self-exploring and not asking and getting answers. Read up more books.
Check this out- http://www.subramoney.com/2013/04/a-new-equity-investor/
Thanks for the quick response.
Muthoot is a semi-banking firm which provides loans on the guarantee of gold. What they claim is they give out gold loans @ 24% interest rates and thats the reason why they are able to provide 12% return in debentures
Dear Dr. Sachin, do you know anything about Muthoot company? What ‘ll be the end use of your money that you give to this company in the debentures?
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