Question regarding Banking stocks

POSTED BY sha faisal ON November 29, 2013 6:27 pm COMMENTS (4)

Hello, I have a query.

I have invested in HDFC midcap Opportunities fund (G), SBI Emerging Business Fund (G) and also Reliance Banking Fund (G) in January 2013, a sum of rupees Rs.50000, expecting it would grow at atleast 15% pa with a plan of not redeeming it till end of 2015. But till date I have not seen any of these funds in Green. As on Nov 1 2013, the value was Rs.45000, which is less than what I have invested. I opted the funds on advice of my financial advisor.

Should I keep the amount as invested in the funds and do you foresee that by end of 2015, the amount to be up by 10-15% pa? as many say that bank stocks will flourish in times to come.

Another query. One of my friend’s financial planner has suggested him to invest in Birla Sunlife Banking & Financial Services Fund as banking stocks are at low levels despite the market at 20k level. Would it be safe to invest now into banking stocks, keeping dec 2015 as the target for the money to grow?

If you suggest to keep away from these stocks, what would be the best way to park some corpus amount atleast for 2 years from now on?

Thanks in advance.

Faisal

 

 

4 replies on this article “Question regarding Banking stocks”

  1. ashalanshu says:

    Dear Sha, please follow what dear Rahul is telling.

    thanks

    Ashal

  2. rahul123 says:

    Faisal,

    i think you got your lesson here. There is no guarantee of returns in stock market.

    I am differing tith Ashish and Ashal, be it a long term or short term. I believe, 10-12% (or 12-15%) returns in SIP/MF/Equity market is a myth….and is very difficult to get. What if your portfolio doesn’t show positive returns in 2-3 year, are you going to remain invested for next 3-4 year again? Just to achieve this 10-12% return over “long term”?

    It’s much better to put your money in PPF (8.7%) return without any risk.

    just see the historical high of SBI, it was more than 3000 and look at the current prices…in approximately 2 years it is down by around 40% and it may remain at that level for years….also as market matures its very difficult to get good returns consistently. I will advise you to get out of market….

    Financial analyst will advise you to remain invested, but i will say use your brain.

    Thanks,
    Rahul

  3. ashalanshu says:

    Dear Sha, before investing your hard earned money, please invest your time in reading past discussions here in this forum. Within a month, you ‘ll be able to decide on your own, what you should do with your money and how?

    Thanks

    Ashal

  4. Ashish Garg says:

    Dear Faisal,

    I think you are hurrying it up here. You have invested in January and want the money to grow up by 15% in one year. If you are thinking that every year money should grow by 10-15% just because you have taken risk, then that’s not correct. You need continue invest in for a longer time period say 5-7 years ad I am sure you shall good returns. You have invested in HDFC Mid-Cap and SBI Emerging Business Find, both are falling in the same category of mid & small cap fund which means there has to be duplication among the stocks they invest in. You need to look at one Large cap fund by moving out from one of these funds.

    As for banking stocks, investing in sector funds comes with a greater risk, suggest you just look at a large cap fund and look at a longer horizon, If you are looking at redeeming around 2015, investing in equity MF is not a great idea.

    For a 2 year time period, better you invest in some Debt fund.

    Ashish Garg

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