December 1, 2013 10:54 pm
Is HDFC TOP 200 still a good fund to invest in with its Huge AUM size?
Or should one look for other better funds?
Agree with you. 8.5% “guaranteed” returns are for current scenario.
1. Reinvestment risk
2. Change in laws/policy for PPF
Are major risks for investing in ppf in coming years.
“8.5% guaranteed tax free (e.g. PPF) returns” might get reduced in future.
PPF interest rates were 12% in 2000.
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The link is not working ! Please recheck these. After reading these, I will give my opinion.
I will explain my point with below two graphs
Graph A: If you have invested in nikkei 225 (japanese stock market, in 90’s), your portfolio is almost 50% down from the top
Graph B: If you invested in US market (dow jones, in 1929) it took almost 25-30 year to get the level back, so you have almost 0 returns for 30 years.
Now tell me is it possible to beat inflation with this performance? And i am talking about the index, not about individual stocks.
SIP/MF will beat inflation is wrong perception, they might beat the inflation, but its not guaranteed. In both the cases, tell me how long will you remain invested? 10/20/30 years?
You know, the kind of capitulation happened in India for good stocks like DLF/SBI/BHEL etc.
Let me ask you this onCe again
a) Risky asset: return 10-15% over long term
b) Safe asset:8.5% guaranteed tax free (e.g. PPF) for long term
which one is better?
All points seem to be acceptable for me except the 3rd point.
I would like to comment on for your 3rd point to beat inflation. Retail investor can consider SIP method of investing in MF in equity for long term. Defining long term by years (more than four or five years) is not sufficient, it should consist of both bull and bear market to beat inflation during the long term period . Retail investor who remains invested in both phase of markets will definitely beat inflation by SIP route. Don’t we ?
I mean depending heavily on one asset over a long period of time….
What is your opinion for a typical salaried person, investing some portion in MF as well as in RD’s and FD’s for long term depends upon goals till retirement? I think, it is not a bad idea. By doing this, we will reap the benefit of different asset class. Depending heavily on asset class over a long period of time (10 to 15 years) seems bad decision ! Give me detailed view on this .
1. “Depending heavily on asset class over a long period of time (10 to 15 years) seems bad decision !”
This goes for equities as well. You know what has happened to other promising/developed economies…Take an example of Japan.
2. There is no point in investing in any asset if you are not able to reap the benefits when you want it. Investment in debt products will guarantee that the capital will be preserved (it is ok if they don’t beat inflation)
3. If investing in equity will guarantee to beat inflation (in bull phase of market), then it will accentuate the loss (in bear phase).
4.In India traditionaly (mostly) Gujrati /business people used to invest in stocks. Now days, it is easy to invest in market but the euphoria created is underestimating the risk involved in it.
I still believe the volatility in Indian stock market is not suitable for retail investors. It is best suited for selected few. Don’t think that you will alway get positive return in MF/equity…it is very very risky.
Of course I will ignore your advice. The problem is- those who are even less knowledgeble than me- may take your advice seriously- then they will be in thick soup- specially if they are young & have no practical knowledge of personal finance.
One will succed in Equity if he gives time. Not after age of 40/ becoming financially stable. Please get your fundas clear before commenting. Do U have any idea- how knowledgeble the likes of Ashal are?
Please stop and spare all of us ! Thanks,
you can ignore my advice 🙂 It’s as simple as that.
I am not against equity. Your perception is wrong.
You can not tell everybody to invest in equity for so called “long term” to beat inflation and get 12-15% CAGR.
Let me ask you one question, is it that straight forward and simpe to get 12-15% from market? I don’t think so.
I gave different advise to people based on their needs, so as to meet their goal.
Let me elaborate this-
1. For salaried person, the source of income is limited and hence it is good for him to preserve capital (PPF/EPF is best) for long term.
2. After this long term period – say 15 years. One become more stabilize financially and can take risk (after fullfilling other obligations or making arrangement of funds for it)
3. But for a rich person/ or somebody without any financial liabilities, after making contingency planning – equity remains a good option and one should explore it.
These are two different questions. Investment advise should be custom made, it differs for different persons.
1. I am saying “huge AUM size” is not a deterrant (if you want to invest in that fund).
2. In another query the salaried person want to earn extra by investing in equity, hence i told him not to invest in equity.
One more thing, you are not representing all the people on this forum. You need to be more mature on commenting in a public forum.
If U R totally against Equity, What does it matter to U whether fund size is big or small? U will be better off asking questions, rather than posing as an expert.
Please elaborate the meaning of no.
In one query, you are telling not to get into Equities.
In another query, you are telling not to get into HDFC TOP 200.
Get Real or GET OUT.
We can manage without people like you.
Dear Swapnil, I’m still investing my personal money into this fund.
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