Smart Lessons for Smart Investors

Hi, I read this while browsing net, I thought this may be useful to you. Read on......
The other day, two school kids were talking to each other – sharing jokes and having a great time. I happened to be around and overheard the following joke.

One day, a moron decided to swim across the English Channel. He started with a lot of enthusiasm. He had crossed around three fourth of the channel. Tired and exhausted, he thought this was enough and he cannot go any further. So he swam all the way back.

Well, this is a good joke from the perspective of the kids. They enjoy the situation that the moron put him into.

But that set me thinking. Doesn’t this sound familiar – especially for many investors in the stock markets? Why do the markets have to start rising immediately after we have sold or vice versa?

Rational thinking suggests that an investor chooses to invest in the “risky” stock market securities to reap higher rewards. Reality suggests that an investor chooses to invest in the “ever-rising” stock markets after the prices have been rising for some time in the recent past. This past trend is then extrapolated into infinite future to conclude that upward is the only direction in which stock prices can and will go. In such a scenario, one tends to assume that the stock markets can give super normal returns without carrying any risk at all. The investor perceives the risk to be absent from the market and continues to pour in more and more money.

Suddenly, for reasons not known to anyone, the market takes a “U” turn and prices start their southward journey. The initial response from people at large is that of denial. The situation looks like small aberration and one is convinced that the reversal will happen once again. It may or may not happen that way. And when the prices do not start moving up in a hurry, one’s patience gets tested. How long can one control the emotions in such a scenario is a function of the conviction that one has and of course the solvency. But often, more than the solvency, it is the conviction that is more important to survive in the market.

Where does the conviction come from? Conviction comes from supreme confidence in what one knows and understands. What is this knowledge?

“Stock prices are slaves of the profit growth of underlying companies over longer periods.”

This simple line sums up all the knowledge that one needs to have in order to develop the confidence. As Benjamin Graham puts it,

“In the short run, the market is a voting machine - reflecting a voter registration that requires only money, not intelligence or emotional stability - but in the long run, the market is a weighing machine.”

If one understands this and has confidence in the economic growth, staying invested could be highly rewarding. Then comes the question of the short term movements of the prices. Someone has very nicely said that the long term is made up of many short terms. Absolutely correct, but one forgot to mention that many of the short terms cancel one another out and the remaining short terms are a part of the long term trend.

It takes enormous courage to stay calm in the noise of the short term – what with ticker, media, friends, brokers, internet – giving out number of messages. It takes a lot of patience to stay balanced in such a scenario. But patience is a rare virtue.

Look at the everyday life and one can see how impatient we have generally become. One of the funniest examples of impatience is what railway passengers do while nearing their destination – even when that may be the last station on the train’s route. I was once travelling from Ahmedabad to Mumbai in Shatabdi Express and had to get down at Mumbai Central, which is the last station on the route. Shatabdi starts from Ahmedabd in the afternoon and reaches Mumbai late in the evening. Soon after we crossed Borivali, the penultimate station, some of the passengers started to take their luggage off the overhead racks and from below the seats to queue up towards the door. Some left the comfort of air-conditioned cabins to stand near the exit doors. And they stood there for close to 20 minutes.

I was wondering what was happening. Mumbai Central being the final station, the train was not going to go anywhere after that giving ample time to the passengers to get off the train with all the luggage they had. The train, as mentioned earlier, reaches Mumbai late in the evening and hence there is no hurry to rush for a time bound schedule unlike in the morning or during the day time. Inside the train compartment, the environment was very comfortable, thanks to the air-conditioning. Outside was typical Mumbai weather – hot and humid. And still, many gave up the comfort for no apparent benefit.

What was the hurry then? But, that is human nature. And if that is how people behave in such a simple case, stock markets are a much more complicated place. Expecting patience might be asking for too much. But then, that one trait ensures you get out of the market with reasonable profits.

To sum up, let us see what Warren Buffet had to say about patience in stock market investing, “The stock market is a device for transferring money from the impatient to the patient.”

MFs go one up on ULIPs

Dear All,
Recently, Mutual Funds like Reliance, Birla and DWS have started spicing up their SIPs with FREE Life Insurance Cover.
It is a known fact that ulips charge high premium on your investments ranging upto 20% of your invesments, whereas Most, if not all, mutual funds charge a maximum of only 2.5%., but still people blindly invest in Ulips and think twice about investing in Mutual Funds.
Both Mutual Funds as well as Ulips invest in Stock Markets and thus can't give different returns. The reason Mutual Funds beat ulips in returns is due to their low Charges.
Investors should definetely invest in Sips of Mutual Funds rather than Ulips. The most important reason because, returns from Ulips catch up with those of mutual funds only after approximately eight years! For mutual funds, the lower lock-in period of investment money and lesser loads, entry and exit, would enable them gain investor interest.
Even ValueResearch's respected CEO Dhirendra Kumar is of the opinion that the SIPs with Free Life Insurance is an excellent value-added benefit.
Go all for it.
Also visit accurateadvisors dot blogspot dot com

Srikanth Shankar Matrubai.

Investment Advise for a newcome to Mutual Funds

Hello Sir,

My name is Srikant and I am 29 years old. I am new to mutual funds
investment.
I can invest 5-10k every month in mutual funds. I am looking at next 10-15
years time frame for my investment to give me good returns.
I need your advise on 2 items.
1. What funds to invest, around 5-10 funds.
2. Which is the easiest way to invest in Mutual Funds. I mean paper
application based or online.
I have kotaksecurities trading/demat account but around 2.25% is
charged as entry load on most of Mutual funds.
Also it is difficult to approach different AMC and invest in their
Mutual funds online to save the entry load.
I heard that CAMS is one place where I can invest in multiple AMC's
without any entry load. I am not sure.
Suggest me some approach where in I can save on entry load and easier
way to invest in Mutual Funds.

Regards
Srikant sharma

Srikanth Shankar Matrubai replied : " Hi, Shrikanta Sharma,
At the outset, you have chosen the right investment avenue for your funds. And the best method ., SIP and the icing on the cake is, your time horizon, 10-15 years!.
First of all I will answer your 2nd question, I dont find much difference between online and offline investments. Most people are sentimental about their invesments and prefer to SEE their investment and therefore go for offline invesments and prefer Account Statement in paper form.
You can go to Cams and save Entry Load. But I would prefer to invest through a Mutual Fund ADvisor purely for the sake of Professional Advise he gives., and also save a lot of time (visiting cams, etc) and most importantly he would do all the follow up work rather me leaving my work and doing the same.
For all these efforts, 2.25% is a pittance. Especially when you compare the Commission you give to your Insurance Agent, above 25% in most cases and in some cases even 40% commission!!
Regarding the funds to invest, I would like you to invest in 10 different Funds with equal amount and regularly review your investments every 6 months or so. My choice of funds is based on your age and assuming that you have adequately insured yourself and do not need the money for at least 10 years.
1. Birla Sunlife Frontline Equity Fund.
2. DSPML World Gold Fund.
3. Fidelity Equity Fund.
4. HDFC Prudence Fund.
5. HDFC Top 200 Fund.
6. Lotus India Agile Fund.
7. Reliance Growth Fund.
8. Reliance Vision Fund.
9. Templeton India Equity Income Fund.
and the 10th fund is a surprise,
it is the new fund in the market MIRAE ASSET GLOBAL COMMODITY STOCK FUND.
The reason for the NFO is Mirae people are very good in managing returns in volatile markets as established by their funds performance in South Korea.
I could go on, but time does not permit me.
You can get more information on my blog www. accurateadvisors.blogspot.com
Best of luck."

Investment in Sundaram Capex Fund

One investor Mr. Srinivas was in doubt whether to continue to stay invested or not and wrote : "I invested Rs.1.20 lakhs with Sundaram's capex opp.growth fund. The investment made during Nov & Dec 07. Today the investment has eroded to Rs. 0.90 lakhs. I do not see any effort from the investment officer to change the philosophy in the portfolio so that the principle erosion could be stopped.

If the MFs simply buy some blue chip scrips and sit on them with out changing any thing in the portfolio to negate the market slip what is the advantage for an invester like me to invest with MFs instead I could have opted some blue chips with my MF investments.

Some body pls suggest how far the MFs are doing their job with extra stretch to perform better in the present higly volative markets"

Srikanth Shankar Matrubai replied : "Mr. Srinivas, you have chosen the right heading 'Change in Investment Philosophy'.
I think that is what you need, the change in Investment Philosophy. Just 6-8 months in a fund, and already you have decided that the fund is bad performer!. Can't you see, the market has also tanked substantially, then how can your fund, Sundaram Capex Fund, be insulated?.
Also, you should note, that the fund has not performed as badly as the Sensex.
Regarding the Fund Manager taking a decision of changing his investment philosophy, he can't; that's a fact. That's why I keep harping again and again, never go for either sector or theme funds, you are always better off by investing in Diversified Funds.
In Diversified Funds, the fund manager has a mandate across all market caps, all sectors, all theme. He has no restrictions and he will definitely keep changing his stocks and reduce underperforming stocks and add better performing stocks. The diversified funds tend to outperform theme and sector funds by a wide margin over a period of time.
Sundaram Capex Fund is a better managed fund. You are advised to continue. Or You may switch a major part of your fund corpus to Sundaram Leadership Fund.
Best of luck.
Srikanth Shankar matrubai.
P.s.: Never invest in lumpsum. Always go for Sip. You will never lose money. "

One Brajesh said : "i am thinking of investing 10000 per month in dsp ml world gold fund instead of buying gold in physical form.what you people suggest on this investment strategy"

Srikanth shankar Matrubai replied : "Dear Brajesh,
Your thoughts are on the right track. Go for DSPML World Gold Fund. You will thank me for ever. This fund has been my favourite since its launch. In fact, my clients portfolio consists of 25% in this fund alone, especially due to market volatility, I had recommeded to up thier exposure.
This fund will give you better returns compared to Direct Gold or even Gold ETFs. Dont worry about entry and exit loads, they are small abberations compared to the fund's high returns. See my previous messages and you will be definitely convinced about the fund.
Best of luck.
"

Helping in Selecting Mutual fund

A guest in moneycontrol messageboard wrote : "I want to invest @10000 per month in the mutual funds for next 15-20 years.
can somebody suggest me which funds to select.i want total of 6-7 funds which are having good track record,and which will give me very good returns.I can take medium to high risk."

Srikanth Shankar Matrubai replied : "Dear Guest, your time horizon of 15-20 years is very good. With this kind of time horizon, you can easily expect a return of above 20% if you invest in Good Quality Funds. I will give you some fund names., you choose the appopriate ones.
1. Birla Sunlife Equity Fund
2. DSPML Top 100 Equity fund
3. Fidelity Equity Fund
4. Templeton India Equity Income Fund
5. HDFC Prudence Fund
6. HDFC Top 200 Fund
7. Reliance Growth Fund
8. Sundaram Select Focus Fund

All the funds listed above have performed well both in bull and bear markets and should comfortably give you above average returns. If you had give your age and other details, the fund choice could have been more specific.
Best of luck.
Srikanth Shankar Matrubai"

Advise to a Novice in Stock Market

One person namely Rahul asked : :""Guys, anybody like to share his/her views regarding which is a better form to invest for 2-3 years, direct equities or MFs.""

Srikanth Shankar Matrubai replied : ""From your Personal Page, I assume you are a novice to the stock markets. Then there is absolutely no question that you are better off sticking to Mutual Funds. Leave the stock picking to the experts, till you gather knowledge.
The question now is how to gather knowledge. I have got a very simple solution. Either way you have a moneycontrol login, then it is very easy. Go to moneybhai., Register yourself, you will get 25 lakhs virtual money. Play with that money. Buy, sell, short sell do whatever you want. And you will learn very quickly and easily and without losing your shirt. Do it right now.
And , till then, my dear friend, invest your hard earned money in mutual funds preferably through Sip.
Best of luck.
Srikanth Shankar Matrubai."

Investment Advise to NRI

Please refer my Advise on June 1. this is a follow up to the same.
The NRI Mr.Rahul wrote : "

Dear Srikanth Sir

Thanks a million for your advice. I have taken appropriate action as per your advice and in the midst of doing portfolio rebalancing. Here is one further modification for proposed list of SIPs based on my latest analysis.

Attach are the excel sheet:

My Proposed SIPs based on Updated MF Performance Analysis.xls ==> Here I have done some analysis and sharing the results of such analysis for you to review and guide. This sheet contains the SIPs that I am planning to execute now.

Plz review and guide me.

Thanks a ton SIR, for your nice and sincere advice.

Rahul

The water in a vessel is sparkling; the water in the sea is dark. The small truth has words which are clear; the great truth has great silence.
- Rabindranath Tagore

Srikanth Shankar Matrubai replied : "It is good to see you starting a sip in Templeton India Equity Income Fund and it is already showing results. Continue the same and you will reap the benefits.
It is also heartening to see that you have implemented almost all changes, modifications suggested. Well done, keep up the good work.
Can I suggest one more change?. Please change your present sip in Reliance Regular Savaings Equity to Reliance Regular Savings - Balanced. Almost all your funds are pure equity funds, have some cushion in form of the above fund. Overall, you have done an excellent job.
Best of luck.

Investment Advise for a Newcomer to Mutual Funds

Query recd : "I am new to equity market, Please suggest me good MF to start as SIP.

Thanks"

SRIKANTH SHANKAR MATRUBAI'S REPLY : "Being new to the stock markets, you are better off in investing in Large cap oriented Funds like
Birla Sunlife Frontline Equity Fund
DSPML Top 100 Fund
HDFC Top 200 Fund
Kotak K30 Fund
Reliance Vision Fund

If you are too conservative and prefer safety over returns then you could go for quality Balanced Funds like
DSPML Balanced Fund
HDFC Prudence Fund
SBI Magnum Balanced Fund.
I request you to invest through SIPs and stay invested at least for 3 years if not more.
Best of luck.
Srikanth Shankar Matrubai"

Investment Advise for a 32 year old

Query recd :
"I'm 32 years old and had invested in the following funds since Jan 2007. plz review my portfolio and suggest the changes as I can continue the SIPs for the next 5 years.

Equity - Diversified (monthly SIP of Rs. 1000 each))

(1)Franklin India Prima Plus Fund (G) 1.69%

(2)HDFC Growth Fund (G) 1.29%

(3)HDFC Top 200 Fund (G) 1.30%

(4) ICICI Pru Dynamic Plan (G) 1.90%

(5) Reliance Equity Opportunities Fund - Retail Plan (G) 0.12%

(6) Reliance Growth Fund - Retail Plan (G) 0.48%

(7) Reliance Regular Savings Fund - Equity Option 0.15%

(8) SBI Magnum Contra Fund (G) 1.66%

(9) SBI Magnum Global Fund (G) 1.20%

(10) Reliance Diversified Power Sector Fund - Retail Plan (G) 6.53%


Close ended funds (single investments)

(1) SBI Infrastructure Fund - Series I (G) 3.24%

(2) Sundaram BNP Paribas Equity Multiplier Fund (G) 0.93%

(3) Tata Indo-Global Infrastructure Fund (G) 1.29%

(4) HDFC Mid-Cap Opportunities Fund (G)1.50%


Equity Tax Saving (single investments)

(1) Birla Sun Life Tax Relief 96 (D) 1.95%

(2) Principal Personal Tax Saver Fund 5.81%

(3) SBI Magnum Tax Gain Scheme (D) 2.31%

(4) SBI Magnum Tax Gain Scheme (G) 3.15%"


SRIKANTH SHANKAR MATRUBAI'S REPLY :
"Dear Sir,
Your portfolio may look big but you seem have to invested in good quality funds excepting for some. Of course, no one can be perfect. I would like to suggest some changes which if incorporated, will definitely help in enhancing overall returns of your portfolio.
First and foremost., kindly stop your sip in the following non-performing funds, namely:-
1. ICICI Pru Dynamic Plan
2. Reliance Equity Opportunities Fund
3. SBI Magnum Global Fund
4. Franklin Prima Plus.
I have got my own reasons for recommending stoppage in Franklin which you can find in my previous messages.
Of the 4000 saved, consider investing in the following funds;
1. Birla Sunlife Frontline Equity Fund. This investment will give you Large Cap exposure which you right now have only through HDFC Top 200 Fund.
2. DSPML Natural Resources and New Energy Fund. Invests in Natural Resources stocks across the world and will give both diversification as well sector diversification.
3. Templeton India Equity Income Fund. This fund invests in High Dividend Yielding Stocks across the globe and will give stability to the portfolio during all the times.
4. SBI Magnum Comma Fund. This fund will help you ride the Commodities Boom.
Best of luck.
Srikanth Shankar Matrubai.

Investment Advise

I recd a query
" HI,

I read your article and found interesting on the insurance cover for the Birla MFs. Please do let me know if as an investor I already have a scheme. Is it possible to get the insurance cover? if so what is the procedure to incorporate the insurance into already existing Birla scheme

regards

Prem"

Srikanth Shankar Matrubai replied : "Sorry Prem Kumar, the insurance scheme is not available for existing investors. It is available and applicable only for fresh SIPs initiated now. The option available to you is to stop the existing sip and start a fresh sip in the same fund and folio which will get the insurance cover.
Best of luck."

Investment Advise

A Guest asked :
"I am 28yrs old i invest monthly 1500
In this market scenario, which SIP funds
best (tax gain also)"

My Reply was :
"Dear Guest,
I prefer you should go for 3 funds of sip of 500 each. My personal choice would be
1. DWS Tax Saving Fund, even though the fund is relatively new, it has outperformed its peers by a huge margin and the icing on the cake is the Free Life Insurance Cover by 5 times of your investment amount.
2. DSPML Tax Saving Fund is also a rather new entrant. But like all funds from the DSPML Stable, this fund is a conservative in its investment approach and would be ideal mix in your portfolio.
3. Principal Personal Tax Saver would make the picture complete with its aggressive mid-cap strategy.
I would avoid SBI Magnum Tax Gain 93 because of huge bloated size and unsure whether it would manage to even give average of the Benchmark Returns.
Another fund you could look at is the Birla Sunlife Tax Relief 96 which has been a consistent performer. And presently, it is also offering Free Life Insurance upto 100 times your monthly investment. For more details see my previous messages.
Or visit accurateadvisors dot blogspot dot com
BEst of luck"

ICICI Bank to fine customers

If you hold ICICI Bank’s credit card and prefer to make the monthly payment in cash, just hold on.

The bank has imposed a fee of Rs 100 for credit cards payments made in cash with effect from June 1

The move is definitely not customer-friendly
The move by ICICI Bank to fine customers who pay by cash their Credit Card dues smacks of arrogance utterly ignoring the inconvenience caused to customers. Is the payment more important or the method of payment more important. The Bank should think twice before going ahead with the same.
There should be some incentive for paying dues through cheques, but not fine for cash payments

Birla SIP with Free Life Insurance

Hi
Birla Sunlife Mutual Fund has come up with an innovative Free Life Insurance Cover with their Mutual Fund Scheme. And frankly, I feel that it is a great offer, irresistible one.
The scheme goes something like this :::


CENTURY SIP ::: SIP WITH FREE LIFE INSURANCE!!!!!!
•Cost of Insurance to be entirely borne by the AMC
•Uniform Insurance Cover*
•Year 1 –10 Times the Monthly SIP Installment
•Year 2 –50 Times the Monthly SIP Installment
•Year 3 onwards –100 Times the Monthly SIP Installment
•Limits above are subject to maximum coverage of Rs. 20 lakhs per investor
•Life cover continues even if SIP stops
•Wide Range of Age Group Covered
•Minimum / Maximum Entry Age –18 Years / Below 46 Years
•Cover continues upto the age of 55 years
•Investor just needs to sign a “Declaration of Good Health”
.No Medical Tests are required!!!

I don’t think that you will not even need any other Life Insurance Cover after you have invested in this one.
Minimum Investment is 1000 per month.

And as you should be already knowing Birla has got some excellent top performing schemes in its portfolio.
Some of my recommendations among the Birla Mutual Fund’s schemes are

1. Birla sunlife Equity Fund (36.25% returns since inception)
2. Birla Sunlife Mid cap Fund (42.4% returns since inception)
3. Birla Sunlife Frontline Equity Fund (39.48% returns since inception)
4. Birla Sunlife Tax Relief ’96 Fund (37.66% returns since inception)

There are other Funds like Kotak, Reliance which too offers Free Life Insurance but the drawback with them is that the Insurance amount actually reduces every month, but here it actually increases!!



Bye, take care.
Happy Investing.
Srikanth Shankar Matrubai.

You can mail me at sharesher@indiatimes.com

Investment Advise

One Mr.RAHUL, an NRI wanted my advise and wrote ::::
"

Dear Mr. Srikanth Matrubai

I am an avid fan and follower of the MF investment advices posted by You, Ranjan, Pcspune and others on the money control message board. I kindly request you to review my portfolio and give your valuable advice for portfolio enhancements.

Thanks in advance for taking time to review my portfolio.

I am a NRI and investing via SIP an approx 45k per month in various MFs. Following are my current SIP status:

1. JM Financia (Div): 2 SIPs per month @ 1000/-
2. Fidelity Equity (Gr): 3 SIPs per month @ 1000/-
3. Birla Frontline Equity (Gr): 4 SIPs per month @ 1000/-
4. Sundaram Capex (Div): 3 SIPs per month @ 1000/-
5. Pru ICICI Infra (Div): 2 SIPs per month @ 2000/-
6. Reliance Banking (Div): 2 SIPs per month @ 1000/-
7. FT Prima Plus (Gr): 4 SIPs per month @ 1000/-
8. HDFC Growth (Gr): 4 SIPs per month @ 1000/-
9. Magnum Contra (Gr): 3 SIPs per month @ 1000/-
10. JM Basic (Div): 1 SIPs per month @ 2000/-
11. Tata Infra (Div): 1 SIPs per month @ 1000/-
12. Reliance Div Power (Div): 1 SIPs per month @ 1000/-
13. DSP ML Tiger (Div): 4 SIPs per month @ 2000/-

All above SIPs are done via Direct broker mode i.e. directly through fund houses or through their Investor Service Centres and hence I incur no entry load. Also except DSP ML, Sundaram and JM MF Fundhouse, in all other I opted for online transactions access via HPIN for ease of redeemptions in future and easier tracking of portfolio. I also spread out my SIP dates across all possible dates in a month to gain rupee cost averaging.

I am aged 35, have dependent parents in India and planning to get married this year. Since you are from Bangalore, just to let you know, I worked in Bangalore for 2 years from 2003-5. I still can't forget the fantastic taste of the food in udipi restaurents the likes of Shathisagar and other eateries.

Plz give your valuable suggestions about the rework/modifications needed in my above portfolio. I am risk taking long term investor looking for wealth creation by sustain investments over a period of time. I am generally patient with my investment and quite lazy to sell or comeout of ant investments, only expert advice trigger me into action. 10-15% downswing don't throw me in anxity - I can be patient with my MF investments. I am quite aware about the technicalities in MF investments.

Lastly I want to add SIPs in DWS Investment Opportunity (Div) and Reliance RSF equity (Gr) (as suggested by you and Pcspune) in my portfolio. Plz suggest which current SIPs I should replace from my above portfolio to include them, as I do not want to increase the number SIPs in my portfolio. Also plz suggest the monthly amount and frequency of SIPs for the DWS Investment Opportunity (Div) and Reliance RSF equity (Gr).

Apart from the above portfolios, I also do the following as investment diversification:
1. Investment in FD (I do in HDFC Bank via online using short term and long term route, whenever I have extra cash I put them into FD for 7 to 30 days (Short Term) and If I have cash for longer duration I put them in FD for 1 year 16 days at 8.75% (Long Term)).
2. Every year I invest 20000/- in PPF.

3. Term Plan from ICICI for 10L 20 Years.

4. Medical covers provided for my company. Thinking of taking medical covers for my aged parents. Can you plz suggest which medical insurance cover will be good for aged parents (dad at 70 and mom at 61) interms of service and premiums?

5. LIC Jeevan Anand policy for SA 2 Lakh - yearly premium approx 12000/-.

6. Tata AIG Nirvana Plus Pension Plan - yearly premium approx 11000/-.

6. Bajaj Allianz Personal Guard accident and disability plan - yearly premium approx 2200/-

I have some more investment in MF worth 8-9 lakh NOT via SIP route. Those are accrued over time or one time purchases - honestly those are not doing that good due to current market turmoil since Jan 15th 2008, though before 15th Jan 2008 those are appreciating haeavily - I have not sold them as I am a long term investor - but now realized the hard way that profit booking is equally important even in MF when going is too good, as such too good time never persists and any amount of long term or long wait can not guarantee the windfall prevalining before 15th Jan 2008. Though I am equally lucky that I have sold a part of my MF holding in Nov - Dec 2007 in good positive gains - may be the smartest thing I have done with my MF investments. I will write about them in my next mail as I do not want to bog you down with a long mail.

Lastly, again a sincere thanks in advance for your time and valuable advice.

Regards

Rahul
M: +65 9756 8356

The water in a vessel is sparkling; the water in the sea is dark. The small truth has words which are clear; the great truth has great silence.
- Rabindranath Tagore""

I had to whack to brain to answer this one, because he seemed to know everything still wanted my opinion. My honest answer went like this ::::

"""Dear Rahul,
At the outset, thanks for placing confidence in me and putting me on the same platform as Ranjan, which I don't feel I am worthy of that position.
After going through your longish mail, I am convinced that you have got sufficient knowledge about Mutual Funds and don't really require any Expert Advise. But since you have asked, I will try my level best to analyse your portfolio and see if any change is required, if at all.
Since you have mentioned that you have a penchant for risk and willing to ride short term volatility, it makes my job easier. I will not go through your PPF, Insurance investments because I admit I am not an expert in these matters. I am good in Mutual Funds and I will deal with these only.
1. JM Financia (Div): 2 SIPs per month @ 1000/-
2. Fidelity Equity (Gr): 3 SIPs per month @ 1000/-
3. Birla Frontline Equity (Gr): 4 SIPs per month @ 1000/-
4. Sundaram Capex (Div): 3 SIPs per month @ 1000/-
5. Pru ICICI Infra (Div): 2 SIPs per month @ 2000/-
6. Reliance Banking (Div): 2 SIPs per month @ 1000/-
7. FT Prima Plus (Gr): 4 SIPs per month @ 1000/-
8. HDFC Growth (Gr): 4 SIPs per month @ 1000/-
9. Magnum Contra (Gr): 3 SIPs per month @ 1000/-
10. JM Basic (Div): 1 SIPs per month @ 2000/-
11. Tata Infra (Div): 1 SIPs per month @ 1000/-
12. Reliance Div Power (Div): 1 SIPs per month @ 1000/-
13. DSP ML Tiger (Div): 4 SIPs per month @ 2000/-

Out of the above investments, it is quite clear your portfolio is quite diversified and slightly titled towards sector funds, which is obvious due to your risk taking capability. Your portfolio needs very little changes only due to the fact your portfolio is too much focussed on Infrastructure Funds. I tend to prefer Diversified Funds because the Fund Manager in the Diversified Fund will also definitely include sector stocks if he feels these will give good returns.
1. Even though Banking and Financial Sectors look as good long term story, having two funds in a portfolio is not recommended. You could consider stopping one of the two fund in JM Financial and Reliance Banking fund, preferably in Jm Financial Fund.
2. Fidelity Equity Fund is a "go anywhere fund" which is my long time favourite and recommend you to continue your sip and stay invested.
3. Birla Sunlife Frontline Equity Fund has been a good performer and is again recommended to continue investing in the same.
4. Sundaram Capex has been a excellent performer and yet again this fund can be continued.
5. Pru ICICI Infrastructure Fund has had a great last year. Though it may not give as good returns it gave in the past, you can continue to be invested in the same.
6. Reliance Banking Fund, has been volatile due to its high sector concentration and you should continue in the fund only if you are stopping the JM Financial Fund.
7. FT Prima Plus fund has a good track record. But in the recent past, almost all Franklin Templeton Funds have been struggling to even match the benchmark returns. Of course, you do not have any Opportunity Fund in your portfolio, but I feel you are better off by switching to Templeton Equity Income Fund, which invests in High Dividend Yield Stocks Worldwide. this will not only give your portfolio Geographical Diversification but also give some kind of a protection in a declining market.
8. HDFC Growth Fund has been a sort of Decent Performer who does not want to be in limelight. It tends to be in the top quartile in terms of performance but never seems to be a Blow-Out Performer nor a Dud Performer. Worth continuing., Be invested.
9. SBI Magnum Contra has a 5 Star Rating by most Research Houses. But, I personally, have my own doubts. You can see my messages about the fund in the moneycontrol mutual fund message board and you will know that I would rather have my clients invest in JM Contra fund, if they want to have a Contra fund or SBI Magnum Comma fund if they want to continue investing in SBI Fund House. Same goes for you.
10. JM Basic has had a phenomenal turnaround in its fortunes since Sandeep sabharwal joined the Fund House. Its ranking has risen from a lowly 165 to even 1 at one point of time. Even though it has slipped recently, it is more due to market correction rather than any change in the portfolio of the Fund. Continue to invest in the same.
11. Tata Infrastructure Fund has been a Star Performer since its launch. But it too is slipping recently. Since you have already have ICICI Infrastructure and DSPML Tiger Fund, I would recommend you to switch to Tata Growing Economies Infrastructure Fund which invests upto 35% in stocks outside India or if you have no attachment to the fund and would rather have High Returns, Stop the SIP in the fund, continue holding the old investments and redeem the same at the opportunate moment and start a fresh SIP in Reliance natural Resources Fund which still holds upto 65% of its corpus in Cash and gives a different flavour to your portfolio.
12. Reliance Diversified Power Sector Fund may have given above average returns in the past, but the future may not be as rosy. Power Sector will have Execution Problems, Raw Materials Problems to deal with in coming months. Already you are invested in ICICI Infrastructure, DSPML Tiger Fund., both these funds do hold many Power Stocks in their portfolio and you are only duplicating your folio rather than diversifing them. You can stop the sip in this Fund.
13. DSPML Tiger Fund has been a consisten performance and deserves to be in your portfolio.
Finally, your portfolio lacks a Good Opportunity Fund which can add zing to your returns. Among these, I would like you to look at DWS Opportunity Fund, Kotak Opportunities Fund, Lotus India Agile Fund, Mirae India Opportunities Fund.
You could also add some Balanced Funds in your portfolio just to give some protection during volatile times., so that you will not be needing to redeem your equity funds in an emergency.
Best of luck.