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POSTED BY ON December 13, 2012 3:53 pm COMMENTS (5)
SIP EQUITY OR SIP MFs
a)One of my friends who is working in a broking firm is compelling to start SIP – EQUITY for Long term in Blue Chip Cos. But he is not suggesting any co names in specific. If the idea is okay, which co can I consider. I have only Rs 3000/- per month on this purpose and I know it is a small amt for blue chip.
b)I am having following SIP-MFs since July 2011. On checking with the stmt yesterday, I could say, an increase of around 12 – 13 % on invested amt except that of Icici discovery which shows 19% increase. In order to get maximum returns, can you tell me whether I should take any changes on the available funds. Given in brackes against each MF is the increase on investment as on 11.12.12
a)DSP BlackRock Top 100 Equity Gr (increase 13.26%)
b)ICICI Focused Bluechip Equity Retail Gr (13.86%)
c)ICICI Discovery Growth (19.45%)
d)HDFC TOP 200 GROWTH (14.45%)
f)HDFC EQUITY FUND GROWTH (12.96%)
g)HDFC PRUDENCE FUND GROWTH (12%)
a)Whether starting SIP Equity @ Rs 3000/- for long term or increase the MF amt will give more benefit? I will wait for your valuable views/suggestions
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Thanks Ashal. I was expecting such comments. You are right that I delayed surrendering those policies. At any cost, those policies will be surrendered in few days. Meantime I have increased MF as suggested above by Rs 3000/-. It will increase further with the saved premium from the policies soon. During April 2013 I can withdraw around 1 lac from PPF with a view to invest in Mfs to get better returns as suggested in the fin magazine? If so, could you please advice how can I maintain the allocation as 50-45-5% ratio? As I already explained, it was not done in the beginning itself due to my ignorance and i can correct it at least now with your advice. Expecting valuable suggestions from you all.
Dear Lakshman, since June 2011, it’s more than 18 months & you have not surrendered your plocies yet. Do you really feel any of us can help you to acheive your goals?
My dear friend, please act first on those policies. The key to your financial well being lies in how early you surrender your policies.
You still have some time on your side & that can play in your favor. Try to increase the saved prem. towards these MFs as discussed above.
thanks
Ashal
Thanks Banayan/zionview for your valuable suggestions. Then the number of SIPs in my portfolio will increase from 6 to 7. Hope it is okay. I would like to share one more issue with you. I was advised by one of the financial magazines during June 2011 that I should allocate the investment as 50% in debt fund, 45% in diversified equity MF and remaining 5 % in RD. But I failed to follow that proportion then due to my ignorance/carelessness. They also added that in order to achieve my goal I should work till the age of 62 as I am 46 now. My present investments are given below. Should I need to re-allocate it according to the above advice or do you have a better suggestion? As discussed earlier, SIP amt can be increased by Rs 3000/- from next month onwards in addition to the following.
DSP BlackRock Top 100 Equity Gr : Rs 1000/- SIP
ICICI Focused Bluechip Equity Retail Gr : Rs 3000/- SIP
ICICI Discovery Growth : Rs 1000/- SIP
HDFC TOP 200 GROWTH : Rs 1000/- SIP
HDFC EQUITY FUND GROWTH : Rs 1000/- SIP
HDFC PRUDENCE FUND GROWTH : Rs 1000/- SIP
PPF : Rs 2500 /- PM. Present amt : Rs 2.75 lac. Fin.planner has asked to withdraw half from PPF and put into MF as per the proportion.
RD : Rs 1000/- PM since 2011
FD : 65000/- with coop bank
Ulips
a) LIC Wealth Plus @ Rs 20000/- per year since 3/2010. I will stop paying premium after remitting prem for one more quarter (ie Rs 5000/-) to avoid further loss.
b) LIC Market Plus @ Rs 5000/- per year since 2010. Will stop, after payment of one more premium ie Rs 5000/-
c) Apart from these, few other endowment policies also there which I was asked to surrender all but not done yet. Awaiting your valuable suggestions.
Lakshman,
Equity SIPs are good, provided you have atleast one more zero in your savings (30K instead of 3K. The rationale behind it is to have a decent diversification to reduce the risk. For 3K, you would find it challenging to get a good mix of portfolio.
On the contrary, given the amount limitations, MF SIPs would be better suited. Break your 3K into 3 funds of 1K each :
1. Large Cap – ICICI Pru BlueChip Focused Equity;
2. MidCap – HDFC MidCap Opportunities;
3. Balanced – HDFC Balanced Fund
Lakshman
No SIP in EQUITY is not good even if you know about the company very well and researched them well enough SIP in direct stock will not make much sense. And definitely
You have been in market for only a year and its been a relatively good year.equity is not for small term investment.So don’t make decision based on a years return.
If you understand the purpose the funds you have selected then stick with them and continue SIP in them.