Chat Transcript

  • Amit Trivedi

    Oct,12,2015, 16:00 hrs

    Equity investments simplified

    Amit Trivedi , Author & Founder, Karmayog Knowledge

  • guest: Hi, I want to invest Rs.10000 per month . What are the best options available for investment which gives good and safe returns.

  • Amit Trivedi:

    It is important to define (1) your time horizon based on the reason why you want to invest, (2) definition of good and safe returns. If you have long time horizon, say if you want to invest for your retirement, which could be a couple of decades away, diversified equity funds could be a good idea as they have the potential to provide above-inflation returns, which a fixed income portfolio cannot. On the other hand, if your horizon is short, say 5 years, you may consider fixed income mutual funds.

  • guest: I CAN INVEST 5000 RS PER MONTH WHICH IS THE BEST MF I CAN TAKE RISK IM 28 YEARS OF AGE AND IT IS FOR LONG TERM

  • Amit Trivedi:

    You may go for diversified equity funds. Considering your age and the time horizon, you may also consider having good exposure to mid-cap funds. It is important to understand that mid-caps are riskier than large-caps, but can outperform large-caps over very long time periods

  • guest: Hello, i am new to mutual fund & want to invest 50k in same.Please suggest me suitable mutual fund for better return

  • Amit Trivedi:

    You need to be clear about your investment needs even if you are new to mutual funds. First of all, are you talking about a lump sum, one-time investment or a regular one? Second, what is your time horizon? Third, which are the other investments made by you? Fourth, what do you mean by "better return"? Consider these questions, and then only one would be able to advice

  • guest: I am a beginner and want to invest in different mutual fund. Please suggest some good funds to invest money

  • Amit Trivedi:

    You need to be clear about your investment needs even if you are new to mutual funds. First of all, are you talking about a lump sum, one-time investment or a regular one? Second, what is your time horizon? Third, which are the other investments made by you? Fourth, what do you mean by "better return"? Consider these questions, and then only one would be able to advice

  • guest: mutual fund of Franklin India Smaller Companies Fund-GROWTH. is good to invest in sip or not

  • Amit Trivedi:

    I would not comment on any specific scheme. However, I would be keen to know on what basis did you zero in on this particular scheme? What criteria did you use to select a scheme for evaluation?

  • guest: I am 34 years old working in an IT firm. I want to invest Rs 12000 per month in mutual funds through SIP for the next 20 years. I will also increase this amount by Rs 2000 every year.My target is to build corpus of 2 crore for my retirement. I have chosen below funds for investing, please suggest if my target is achievable and my selection of funds are OK. Also I have not chosen any tax saving funds as I am saving tax by EPF and PPF. ICICI Prudential Value Discovery Fund 4000 Franklin India Smaller Companies Fund 3000 Franklin Build India Fund 2500 SBI Pharma Fund 2500

  • Amit Trivedi:

    First of all, let me congratulate you on your clarity. You have articulated your needs well. Though I would not comment on the specific schemes, my comments are: your scheme selection looks quite aggressive (nothing wrong in being aggressive, just that one should be aware of it), as you have selected one small and mid-cap fund, one sector fund and a thematic fund. Considering your time horizon, the risks may not be high though. If you do not have any other investments in equity funds, i would suggest considering some allocation to a large-cap fund for stability.

  • guest: I have been investing through SIP in these funds :- PPFAS Long Term Equity Fund, ICICI PRU Focused Blue Chip fund, Quantum Long Term Equity, Axis Long Term Eqity(Tax Saving Fund) & in Franklin High Growth Companies Fund & Religare Invesco Tax Saving Fund since last five months or so. Should I continue to invest in these funds ? What to retain, what to exit from and where should I enter afresh from long term perspective ? Please counsel and guide me. Thank you.

  • Amit Trivedi:

    What was your basis of selecting these schemes?. If anything has changed in that, please consider changing the schemes. Else continue. However, if you have selected the schemes based on past returns, consider other parameters of selection, e.g. whether the scheme has been doing well in rising as well as falling markets, is the portfolio too concentrated or diversified, are the schemes investing in similar securities, do you think the fund management team is good, etc. Do not consider changing the schemes in five months. If at all, the changes should not be made too often.

  • guest: I have discontinued SIP in Hdfc Equity, Sundaram Select Midcap, IDFC Premier ,Canara Robeco Tax saving Fund,Quantum Tax Saving since long, though I have not withdrawn money from these funds. Should I withdraw to plough them back in some better funds? What would be your advice ? If yes, can you suggest some better funds ?

  • Amit Trivedi:

    Why did you discontinue the SIPs in the first place? If the reasons are compelling to stop further investments, there is every reason to withdraw money from the schemes, too. However, you may also want to check the impact of taxes and exit loads, if any.

  • guest: I want to start SIP for 3 years. My monthly contribution towards SIP shall be 6000. I have identified Canara Robeco Emerging Equity- Growth fund, i need experts choice about this fund and please share 2 other options

  • Amit Trivedi:

    I would not comment on specific schemes. Apologies.

  • guest: I want to invest Rs 20 Lac in Mutual Fund. But I am scared to put all the money in one go, please suggest me some debt funds, from which I can earn Better Return and start STP from Debt to Equity Mutual Fund

  • Amit Trivedi:

    If you want to invest money into an equity fund and prefer to go through STP route, it is not important which debt fund you choose. Please finalise the equity funds you want to invest in and then invest in liquid / ultra-short term debt funds from the same fund house

  • prataparudra197: Dear Sir. I am planning to Invest a Lumpsum of Rs.25Lakhs in Birla Sun Life MNC Fund (Growth). After 1 year i want to draw the Profits on monthly basis. Is it the right time to Invest and expected rate of return by October 2016. Plz provide the Information..

  • Amit Trivedi:

    Please consider investing in equity funds only if your time horizon is long and one year is not long. If someone tries to predict what is going to happen in the next one year, please run away from such a person.

  • devangdoshi: I am a salaried employee falling in a upper tax slab (30%). I have a saving of Rs. 10 lac. I am looking to park them in a MF. I will be setting up an STP from there. Which of the following option is more tax efficient? - Parking the fund in Long term debt fund - Parking the fund in Liquid fund Also, should I go for dividend reinvestment option or growth option.

  • Amit Trivedi:

    The tax impact depends on how much money you want to transfer over what period. If you are planning to transfer only the earning component (roughly equal to the rise in NAV), then the tax liability would be very low, since large part of the tax would be deferred and after three years, the capital gains would be adjusted for indexation. The income tax is payable only on the capital gains component, which would be very low in the first three years. I would prefer a liquid / ultra-short term fund purely because the same would see very low NAV fluctuations. NAV fluctuation helps in SIP, but when you are withdrawing a fixed amount of money, higher fluctuations are harmful

  • guest: is there any good investment opportunity in company deposits.

  • Amit Trivedi:

    Company deposits have a few disadvantages compared to debt mutual funds: (1) risk of concentration in a single company, (2) poor liquidity - most FDs come with lock-in, (3) the interest income is subject to tax, hence compounding happens after-tax, (4) if you wish to diversify across FDs, a lot of paperwork may be involved, (5) the term of the FD may or may not match with your investment term. I would suggest you consider debt mutual funds

  • guest: presently expected Reurns in 3 years FMP & Dual advantage Funds

  • Amit Trivedi:

    This may vary from scheme to scheme. Can`t generalise

  • guest: Hello, I have purchased Reliance Regular Savings Fund (Debt) Growth option on 21-6-2013. If I sell it in Oct 2015, is there any Income Tax payable on the sale proceeds? Please replay, very urgent please

  • Amit Trivedi:

    Debt fund returns are subject to capital gains tax. If your holding period is less than three years, the gain would be classified as short-term whereas longer than three years would be classified as long-term. Short term capital gains are added to your income for the year and taxes at the marginal rate of tax applicable according to your total income for the year. In this case, since you invested in 2013, only two years have elapsed and hence the capital gains would be short-term if you redeem now

  • guest: I have purchased LIC Endowment plan in jan\`2011 of 50000/- one time premium for 10 yrs., but when i\`m calculating its only 8.3% growth according to bank\`s FD\`s. can I surrender the policy & invest money in utual funds for faster growth. I need higher returns in short period. pls suggest

  • Amit Trivedi:

    I am not sure I understood your question. Are you suggesting that the return you have got is only 8.3% p.a. compounded annually? Is it on the surrender value? One cannot make a general comment on any policy, without checking the policy details and terms and conditions. You have mentioned "you need higher returns in short period" - higher than what? Short period - how short? Please have proper expectations. Higher returns may be available over long periods. Expecting the same in short time would entail taking very high risks - not advisable for most common investors

  • guest: I retired from a PSU at the age of 60 yrs and withdrew my entire PF then (that was maintained by Trust). After four months of my retirement from PSU in 2013, I joined a private firm in regular role and retired from this company after attaining age of 62 in July 2015, as per policy of this private organization. I am continuing to work in this private organization as an individual consultant and may do so for another six months before I hang up my boots. During my tenure in this private organization , I had EPF and also made significant VPF till my retirement in July 2015. My EPF account was for only 20 months and contribution seized with my retirement in July 2015. Now with my retirement , I have asked for full settlement from EPFO. My question is - Will the settlement amount be taxable? If it is taxable , then what be the tax deduction ( I mean should EPFO deduct 10% TDS flat on entire amount which also includes my contribution as well as VPF which otherwise should never be taxable. ) Or settlement amount should not be taxed at all as I have claimed for settlement after being retired at age of 62 yrs as per the policy of the organization which beyond my control and I am already senior citizen . Would appreciate your opinion on this

  • Amit Trivedi:

    Since this query is regarding taxation, I would request you to consult a tax consultant or a chartered accountant.

  • guest: Hi, Can you please let me know how to apply for infrastructure bonds? Is it eligible under 80c tax benefit?

  • Amit Trivedi:

    Currently there are no infrastructure bonds available that you can invest in to avail tax benefits. However, some companies are issuing tax-free bonds. You can invest in these bonds from your income and the interest paid is tax-free. However, the amount invested is not eligible for deduction under section 80C

Sections