Saturday, May 30, 2009

MY BLOG IS RANKED AS WORLD'S NO.3

I recently received a Mail from www.etfdb.com, a US based etf site which has ranked my Blog http://http://goodfundsadvisor.blogspot.com among the Top 50 50 Buy and Hold Investing Blogs and mine has been ranked at NO.3.
This is what the email said :

“From: Jimmy Atkinson
To: sharesher@indiatimes.com
Sent: Thu, 14 May 2009 21:59:42 +0530 (IST)
Subject: Good Funds Advisor Named a Top 50 Buy and Hold Investing Blog





Hi



Just in case you
have not yet noticed, Good Funds Advisor was named a top 50 buy and hold investing
blog at ETF Database earlier this week. I thought you and your readers might
want to check out the rest of the list. Let me know if you have any feedback, or
feel free to leave a comment directly on the blog post. httphttp://etfdb.com/2009/top-50-buy-and-hold-investing-blogs/



Thanks!
Jimmy
Atkinson

ETF
Database

http://http://etfdb.com
I dedicate this success to YOU. Yes, you dear readers, who keep visiting my blog and come up with interesting suggestion.
So, guys check out my blog http://http://goodfundsadvisor.blogspot.com and tell me how can I further improve my blog and make it No.1.
Thanks to you all
Srikanth Shankar Matrubai



Also visit http://equityadvise.blogspot.com for an indepth Equity Analysis


Visit http://http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Wednesday, May 13, 2009

ICICI TARGET RETURNS FUND - INVEST

ICICI Target Return Fund - Invest

Srikanth Shankar Matrubai


A rare NFO, which is good

ICICI has come with a New Fund Offer named ICICI Prudential Target Returns Fund, an Open Ended Diversified Fund. The objective of the Fund is to Generate Capital Appreciation by investing in equity/equity related instruments of BSE100 and, providing investors with options to withdraw their investment automatically based On Triggers as when and when achieved.

The fund offers investors an option to switch out their capital appreciation or entire investment when the fund reaches a particular target, preset at either at 12%, 20%, 50% or 100%. This will help the investor to book his profit and protect any downward fall.

A back testing carried by the AMC shows that a trigger @ 20% moved into even a normal savings account would have given a return of 14.92 on a Rs.10 NAV., whereas not using the trigger would have left your NAV at 10.04 inspite of the NAV having touched a high of 21.
(This Simulation is based on a Value of Rs.10 invested on 01 Jan 2006 till March 2009).

Comments:
This scheme will give comfort to first-time investors, who usually come when markets are at peak and then lose out money when they fall. This scheme will book profits regularly in a discipline manner. Profit booking in a disciplined manner is essential. Investors tend to become greedy when they see appreciation and become fearful during correction and this fund will eliminate such greed. The Trend seen in the last two years clearly shows that a bit of Active approach is essential even in Mutual Fund investments and this Fund addresses this need.

Positives :
1) The Trigger Mechanism will automatically ensure Rebalancing.
2) With Triggers, Returns are locked at regular returns and Value is preserved in the event of a Subsequent fall.
3) The fund intends to invest in Large Caps, which is a comforting factor.
4) The Fund is being launched after the Stock Market have seen a Big Correction and is Attractively Valued, thus the probability of the Fund achieving its 'Targets' is rather high.


Negative:
1) The biggest negative of the Fund is that due the Mandate, the Fund Manager is forced to Sell out Stocks as soon the Stated Target is achieved and may well miss Higher Returns if held.
2) There is no Guarantee that the Fund will meet its 'Trigger Target' if the Markets were to stay Range Bound to Negative.
3) In the Event of a Bull Run similar to 2 years back, than there is a risk of losing the Benefits of compounding Returns.


Recommendation:
The Fund should do well and one can invest going by the Fact that the Fund will be investing in Large Caps and the Markets too look attractive over the Next two years at least. The Fund may not give Huge Gains but does promise to protect your gains in the event of a market crash.

Invest with the Option of 20% Trigger Target and Switch to ICICI Liquid Plan - dividend Reinvestment Option.

One can consider investing in this Fund

Best of luck,
Srikanth Shankar Matrubai




Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Friday, March 13, 2009

Seek your suggestion

Seek your suggestion
Hi srikant,

Lalitesh here (hope u still remember me ) ...First of all let me wish Belated Merry Christmas and Happy new year in Advance !!!!

I understand that you would be too loaded with work ..but still I seek your kind help (suggestion) regarding the investment I had discussed with you and Aslanshu, because I have registered for the funds and its almost started working.

You might remember the mail I have sent you for the investment
regarding the home down payment which i need after 3 yrs and the fund i need is around 10L (atleast), and as per your valuable suggestion i have enrolled for the below funds :


Port1 (24k)
Amt
Name Date1 Date2 Date3
HDFC T200 N/A N/A 1,000
Sundaram Sel Foc N/A N/A 1,000
DSPMLT100 N/A N/A 1,000
UTI Spread LTP(G)2,000 1000 1000
HSBC MIP -RP(G) 2,000 2000 2000
DSPML Balanced 2,000 1000 2000
Kotal Floater LTP(G)2,000 1000 2000
Investment Amount
:: 24,000/months

Time Horizon
:: 3 yrs

As of now i have selected to invest for next 1 yrs only.

Objective
:: to acheive >10L corpus by next 3 yr.

I had submitted the form of UTI Mahila fund also for 7k/month but as per my agent, it was rejected becuase only females can only invest in this fund. so will be choosing some other fund soon and register for the same . Final plan is to have 31k/month plan.

Could you please suggest me if this portfolio looks fine of it need any modification. Similarly i have created few other portfolio for my future needs but since its still under registration so haven't share the same here.

I'll be seeking your expertise to comment on those portfolio as well, once i send you the details. Finally, can i have your suggestion on my this 24k portfolio.



Regards.

Lalitesh.

SRIKANTH SHANKAR MATRUBAI Replies :
Dear Lalitesh Kumar,
I am happy to see your mail again. And I am particularly more happy
to see that you have not ignored my suggestion and have avoided All your
investment into Debt Fund and have also considered Equity Funds.
You seem to have chosen your funds well, going by the fact that a good number of them have a solid performance track record.
However, I have concern that you seem to have invested just a bit on the higher side in DSPML Balanced Fund. Given the nature of your goal and time limit, you can consider switching to DSPML Savings Plan (Moderate) with a Equity Exposure of 20% (compared to 65% equity exposure in DSPML Balanced Fund).
DSPML Balanced Fund has had a good track record but the current market appreas to continue remain volatile and may not the recent highs in a hurry, and moreover the Debt Funds due to Falling Interest Rates should easily give you upwards of 12% return in next 6-9 months.
Your agent is ignorant. Any person (male or female) can invest in UTI Mahila Fund. Only the name is Mahila. Sure, go ahead and invest. Its small Corpus is 82.46 makes it manageable. The Fund is rated 5 Star by ValueResearch.
Though the Fund has had a bad 2008 with a return of negative 8%, the 3 years return continue to impress at above 20%. And the Fact that the Fund has only 12% in equity and with falling interest rates, the Fund should give you good returns.

Even as recently as Novermber 2008, the Hindu Businessline had given a "Invest" Recommendation on the fund. You can find the same in the link

http://www.thehindubusinessline.com/iw/2008/11/23/stories/2008112350591000.htm
You can also consider investing the additional 7k in UTI Spread itself.

NOTE : AS YOU INTEND TO WITHDRAW WITHIN 1 YEAR, YOU WILL BE CHARGED WITH EXIT LOAD IN SOME SCHEMES, ENQUIRE ABOUT THE SAME BEFORE INVESTING.

Best of luck,
Srikanth shankar Matrubai

See the earlier query by Lalitesh Kumar on

http://goodfundadvisor.blogspot.com/2008/08/10-lakhs-in-3-years.html


Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Student's dilemma on Diversified Funds or Balanced Funds?

Student's dilemma on Diversified Funds or Balanced Funds?
From: Akhil Sharma

Hi! Mr.Advisor

hi.
I'm a student.My age is 23.i love to save my money.it's been a year that i've invested in various equity diversified funds like
ICICI pru infra
Reliiance diversified power

Sundaram capex
Reliance RSF equity
Kotak indo world infra
I've invested Rs.5000 in each of them.As the last year has been bad for the markets...i've lost 50% of my investment.Now i want to invest again but not in diversified as i now want to have different type of funds in my portfolio.

I wanted to know if DSP black rock balanced fund,UTI mahila unit scheme and Reliance banking fund would be a good deal to invest or not and should i go for lumpsum or i should go for SIPs!
Any of your suggestions for me are welcome.

Thank you!
You're doing a great job!.....cheers to ur blog!!
Akhil sharma


SRIKANTH SHANKAR MATRUBAI replied :
Dear Akhil sharma,
First of all, thank you for your kind words on my blog.
You have started your invested at the peak of the Bull Market and hence it is no surprise that your investment value is down by 50%.
Alas, your investment has all been in Infrastructure Funds which only adds to the downswing of your investment value.
Thankfully, I am happy to note that you have not lost your heart and ready to invest again. Yes, as you yourself have admitted, you need to diversify your investment horizon. The funds you have selected for investment are all Balanced Fund. And at your age, you can go for Diversified Funds as these funds typically give you more return than Balanced Funds over a longer periods of time.
you can consider one among the following funds for your future investments.
Birla sunlife Equity fund
Fidelity Equity Fund
HDFC Top 200 fund
Reliance Growth Fund
Sundaram Select Focus Fund.


If you are still considering Balanced funds, you can think of HDFC Prudence Fund which has an excellent Track Record since its inception.
Preferably, go for SIPS.
Best of luck,
Srikanth Shankar Matrubai,
Bangalore

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

KINGFISHER AIRLINES - PROMISING GOOD TIMES


KINGFISHER AIRLINES - PROMISING GOOD TIMES
Kingfisher Airlines Limited Formerly known as Deccan Aviation Ltd. The Group's principal activity is to provide commercial passenger airline and a private helicopter and airplane chartering services in India.
After the Annual General Meeting, I had a chance to talk with the “King of Good Times”, Dynamic Chairman of Kingfisher Airlines, Dr.Vijay Mallya.


He announced “the worst is over for the Airlines Industry. Kingfisher Airlines Fundamentals is getting stronger by the day and we will start to break even from this month itself.
“I think the worst is over and there’s no reason why private equity investors who had expressed interest when oil was at $100 a barrel shouldn’t be more interested when oil is $36 a barrel,” Mallya said


He said once the Govt brings the ATF under the ‘Declared Goods’ category, Kingfisher Airlines will immediately reduce fares.
“We can pass on pretty much majority of the savings and that would be good for the industry, make air travel even more affordable and stimulate an industry that has slowed down considerably,” claimed Mallya.
.
"Kingfisher will be the biggest airline in India by 2010 not only in terms of market share, as others claim. In all the aspects, it will be the biggest. Wait and you will see," he said, dismissing all related questions. Hyperbole? Like the man says, we will wait and see.

MY TAKE :
At least in Near Short Term of upto 1 year, things are looking much much brighter than it was in anytime of the Kingfisher’s history. The operations costs are lower and there are no visible signs of going up, and, the Airfares are not being reduced and surprisingly, the load factor is going up, which should all add up to “Good Times” for the Kingfisher Stock. Can expect an upside of at least 40% from here and expect the Stock to reach at least 50-55 by June End 2009. Buy in Small quantities as “Contra” Pick. The stock could be the Dark horse of 2009.





Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

EXTRAORDINARY OUTLOOK FOR GOLD

EXTRAORDINARY OUTLOOK FOR GOLD
Dear All,
I received an interesting article on Gold today morning from Kotak Mutual Fund and you have to read it. It is very very interesting.
The damage caused by the financial excesses of the last quarter century was forcing the world's authorities to take steps that had never been tried before.



This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.



Find below an extremely interesting link which details why gold prices have been depressed and why dollar has been outwardly biddish despite deteriorating fundamentals. All along the article are very interesting snippets from industry veterans and analysts on their outlook on the current happenings and its impact on gold going forward..

The link is :
https://www.golddrivers.com/dispatches/tgdrall/ShowArticle.aspx?id=b0c7762f-5e47-4e99-b621-5581b484c167

So a good moment to get in gold stocks now?

According to Frank Veneroso, a well known gold market strategist, yes, he recently said:

I think gold might have a very explosive upside in the current environment. Gold stocks are now extremely cheap relative to the price of gold with the commodity bust, gold mining costs are falling. I think money managers should now be buying gold stocks.

So, dear investors,, can you ignore investing in DSPBR World Gold Fund or AIG World Gold Fund?. Obviously not.
Think again and invest at least a portion of your investible surplus is Gold Funds.
Best of luck,
Srikanth Shankar Matrubai


Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.
BUY GOLD NOW BEFORE IT BECOMES EXPENSIVE
Dear all,
The Global Financial Crises we are witness to today is unprecendented and many Economies, (even Developed ones) are on the brink of an looming impending Recession. In response, Central Banks, with US leading from the front, are pumping in tonnes and tonnes of money by printing more and more Dollars. But the disaster waiting to happen is, that this Oversupply of Paper Currency is not backed by any Real Assets such as Gold. Which means, that the Currency that the US Govt is pumping is only a Paper churned out from Printing Presses.
What this creates is, that Gradually the Confidence in US Dollar will reduce and its VALUE too decrease (Remember Zimbabwe?).


This is where a proxy currency such as "GOLD" holds intrinsic value, since the supply of it is limited and which is not in control of any Central Bank. Gold has a unique characteristic of "storage value", vis-à-vis paper currencies. Paper currencies tend to lose value over a period of time due to inflation (loss of purchasing power) caused by over supply as it leads to a situation where more and more currency is required to buy the same amount of goods.
Another shocker is that the Gold Reserves held by US, UK and other Developed Countries on threshold of depression has fallen considerably. While the ratio of Gold to Currency was 141.2 tonnes to 1bn$ in circulation, now it is ONLY 10.7tonnes to 1bn$ in circulation. This shows that More paper Currency is in circulation backed by Less Gold. To correct this analomy, the US needs to increase its Gold Reserves by MORE than 13 times!!!!
This will only Fasten the process of Falling Confidence and Faith in the US Dollar and hasten the image of Gold as the Saviour to protect over the Long Term.
Citigroup, in a recent report has said that gold will touch US$ 2,000 per ounce. That's 2.5 times the current price of the yellow metal at US$ 800. The firm believes the measures taken to tackle the financial crisis will not stabilise the global economy. Instead they will lead to a painful depression. As per the bank, the financial system has tripped beyond recovery, towards depression. In this scenario, there will be a flight towards gold. In fact, according some reports, China plans to add nearly 6 times its current gold reserves of 600 tonnes in a move away from foreign paper currencies.


With the financial crisis not over yet and the recession looming large, central banks would continue to inject more and more money into the financial system. Thus the debasement of the currencies will continue making Gold more and more attractive as a hedge against the dwindling purchasing power and the loss of faith and confidence in paper currencies.

Gold is seriously undervalued.

Buy gold before it gets expensive.


On where to invest, you can visit http://goodfundadvisor.blogspot.com/2008/12/dspbr-and-aig-world-gold-funds.html
http://goodfundadvisor.blogspot.com/2008/09/buy-gold-now.html
http://goodfundadvisor.blogspot.com/2008/09/is-dspml-world-gold-fund-good-buy.html
Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

DBS CHOLA TAX ADVANTAGE FUND - AVOID

DBS CHOLA TAX ADVANTAGE FUND - AVOID
DBS Chola Mutual Fund has launched DBS Chola Tax Advantage Fund – Series 1. The fund is a 10 - year close ended equity linked
saving scheme, subject to a lock in for a period of three years from date of allotment.

The fund which opened December 19, will close on March 19. The objective of the scheme is to seek to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities and also enabling investors to get income tax rebate as per the prevailing Tax Laws and subject to applicable conditions. The fund, benchmarked against BSE 200 Index would invest between 80- 100% in Indian equities and equity related securities and 0% to 20% in money market instruments / debt securities instruments.

Sanjay Sinha, chief executive officer, DBS Cholamandalam Asset Management said, "this fund will follow 'value investing strategy'. Current market conditions favour this strategy as it limits the downside potential of these stocks. In addition to the tax benefit, a 3 year lock-in allows investors to realise a better potential for their investment."

The minimum amount for application during the new fund offering period will be Rs. 500 and in multiples of Rs. 500 thereafter.

MY TAKE :
Though the Fund House has been in existence for quite some time, it has just been an also ran with none of its schemes ranking among the Top 10. Sure, it has Sanjay Sinha in its rank who joined recently, but he will have a tough job ahead to prove himself in these volative times.
The Fact that your fund is locked in for 10 years also goes against this fund. You are better off by investing in Existing Proven funds rather than Putting in an Unknown Specie yet to prove itself. It is like a Known Devil is Better than an Unknown Angel.
AVOID.


Best of luck,
Srikanth shankar Matrubai
Bangalore

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Invest in Kotak Short Term bond

Invest in Kotak Short Term bond
I recieved this letter from Kotak AMC and found it very interesting. May be it will be useful to you also. Here goes......
Dear All



“Opportunity does not knock, it presents itself when you beat down the door”. This seems to be the case in the Indian bond markets as well. The flight
for safety factor has led to government securities rally across the world reaching all time lows. The treasury rates across the world – esp developed countries like the US, Japan, UK, EU are so low (practically 0 in some cases) that the investor. The investor looking out for some yield on his/her investment has now started looking out for some quality assets - not as safe as sovereign though high grade assets in the corporate bond segment. US treasuries have rallied from 3.75% to 2% in 6 weeks !!! (currently at 2.17%). Global investors are increasingly buying into the view that in such a financial climate it would be safer to own a companys bond than its shares. BHP Billiton shares were down 5% on a trading day last week, but BHPs bond was trading marginally higher on the same day. With companies deferring dividend payment and preserving cash to pay its debt in time, global money has started chasing yields – albeit in a small manner



In India during the interest rate rally in 2000-2003, spreads between the 5yr corporate bond and 5 yr gsec had touched a low of 30 bps…Likewise for a 3 yr segment, the spreads had touched a low of 15 bps !!!!!



Case for investment in Kotak Bond Short Term



The above factors form the plinth for investment in our Kotak Bond Short Term. The fund is positioned to reap the benefits of carry as well as spread compression in the corporate bond segment of the fixed income market. The current spreads are at 300 bps in the 3 and 5yr segment – which is significantly higher compared to the spreads we witnessed in the previous rate rally. While we do agree that there is general risk aversion in the credit segment – quality credit (combination of PSU and Pvt) does pose a huge investment opportunity. Most PSU are either partly or wholly owned by the Govt of India and therefore quasi sovereign entities. The spreads therefore present an imminent compression theory going forward. While the spreads may not come off in a hurry, in the initial phase, these would act as high carry on the portfolio. Also the 2,3 and 5 yr yield are largely flat (yielding the same). With expectations of reverse repo cut going forward and easy liquidity in the system, this curve could steepen .i.e shorter end could rally at a faster pace than the longer end, leading to a curve steepener.



This is what we endeavor to capture in bond short term, where corporate bonds varying from 2-5 yr maturity is held. The average maturity is capped at 3 yrs, with 25% allocated to cash for trading calls and positioned at the shorter end of the yield curve. This combination makes it ideal for being recommended from a 1 to 3m perspective.



Investors having beyond 3 month horizon should continue to look at investments in long term gilt and bond funds



The top holdings of Kotak Bond Short Term are :- ACC – 9.5%, IDFC – 9.37%, Grasim – 9.28%, REC (Rural Electrification Corporation) - 9.25%, EXIM – 9.16%, IRFC – 9.93%. Current avg maturity is at 2.50 years with a portfolio yield of 9%. The fund is rated mfAAA by ICRA *

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

I WANT RETURN ABOVE SAVINGS RATE......

I WANT RETURN ABOVE SAVINGS RATE.......
One Guest wrote,

want to park some of my money into liquid funds.
Are "ICICI Pru Gilt - Investment Plan - PF Option" and "Canara Robeco Income (G)" are liquid funds? Can I put my money in these funds? I only know that liquid funds are similar to Savings Account but with more % returns.
These above 2 funds have 5 stars in MC and they have given nearly 25-30% return in a year.
some of my other queries regarding liquid funds are as below:
+ What are tax implications on liquid funds?
+ Difference between liquid and liquid plus funds
+ If I have parked my money in liquid plus and due to some emergency I need some money how can I get it? I mean do I have to fill some form to redeem and submit at AMC? And when will I get the money in my hands?
Please help me in this.



SRIKANTH SHANKAR MATRUBAI replied :
Canara Robeco Income (G) fund is a Bond fund & ICICI Pru Gilt - Investment Plan - PF Option is a Gilt fund.
anyone of above fund is not a liquid or liquid plus fund. ur understanding regarding returns of Liquid funds is right.
+ What are tax implications on liquid funds? - Growth option treated as debt fund, so STCG & LTCG r taxed accordingly. Dividend option- div. option in ur hand is tax free but DDT is 28.325%. From taxation point of view, the DDT (div. distribution Tax) is higher in Liquid funds & at the same time due to higher maturity period of underlying securities of Liquid plus funds`, returns r on higher side in Liq. + funds, it make sense to park money in Liquid + funds.
+ Difference between liquid and liquid plus funds - The maturity period of underlying securities is slightly higher in plus funds & also the DDT is 14.15% only in case of plus funds.

U can get money on T+1 day basis. If u have opted direct trasnfer to ur acct. option while investing, the money `ll be credited to ur acct. directly. As there is no entry or Exit load in case of Liq.. & Liq. + funds, it`s better to invest in these funds thru ur online broker acct. - like Icici direct, Sharekhan, Indiabulls, .....


Selection of Growth & Div. option `ll depend upon 2 things -
1. Ur current Tax slab - as in all probability there `ll be STCG on investment in these funds which `ll be added to ur income & `ll be taxed at ur slab rate.
2. Ur time duration - if u r using these funds either to park surplus money for some better earning on ur liquid cash or u r using these funds as transfer vehicle for investing in Eq. funds under STP mode.

In case of Liq. + funds & `ll use for parking of surplus funds as well as emergency funds, the DDT `ll be 14.15% only, so if u r in 20.6% & higher Tax slab it makes sense to invest in Div. option to minimise Tax outgo.

In case u r using it for STP in Eq. funds, it`s better to invest in Growth option for easy calculation of STCG Tax.

The reason to get the nearly 25-30% return in last 1 year was due to the an inverse relationship between interest rate and prices of securities. And this gets reflected in government bonds first, so if the interest rate goes down, the prices of bonds rises and vice-versa.
On any fixed income investment, whether it’s a gilt or a corporate bond or even a fixed deposit in a bank, there are three types of risk. These are credit risk, liquidity risk and interest rate risk. A high credit risk means that a borrower wouldn’t be able to pay back an investment at all. In government securities, this risk is generally considered to be zero. In other types of f ixed income investments, this risk is higher. In any economy, government securities are considered to be of the lowest risk. Therefore Gilt fund has stood as a far safer investment avenue than others.

Gilt funds could be opportune investment for risk adverse investors particularly when interest rates are likely to go down. I think you can expect return between 8-11% on Gilt funds from now.

However, regarding the fund choice to invest, I would prefer
HDFC Income Fund and Birla Income Fund, especially the former. I have gone through the portfolio of the HDFC Income Fund throughly, and I can with some confidence, that the fund could give a return of at least 14% in the coming year inverse relationship between interest rate and prices of securities.
gilt Funds can give you somewhere between 7-9% and
debt funds should give above 12% comfortably.


Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Shall I withdraw FD and invest in Debt fund?

Shall I withdraw FD and invest in Debt fund?
An old Guest, Mr.Ajay Kumar from Hyderabad, wrote again :

Hi Sir! as per ur advice i started two SIP's in HDFC TOP 200 =
1000/mth and Sundaram SELECT FOCUS = 500/mth from october 2008 and
finished 3 SIP installments,also i have a FIXED DEPOSIT of 15000 with
a interest rate 9.75/year = 16462 . as u can see FD is not getting me
huge returns,i want to shift that money in GILT / INCOME / DEBT FUNDS.
The latest news i heard that GILT funds are going to give good reurns
in short term as the interest rates and inflation are slashed down.
so, plz give any advice on my 15000 rupees .thank u

SRIKANTH SHANKAR MATRUBAI replied :
Dear Ajay Kumar,
It is always a pleasure to recieve your mails. I am extremely pleased that you are following my advise and starting investing in HDFC Top 200 and Sundaram Select Focus.
Regarding your FD, yes you are right, you are not getting much returns from the same. You can consider switching the funds to HDFC Income Fund which, considering Falling Interest Rates, easily give you return in excess of 12%. Do invest in this fund with a time period of at least 1 year. Instead of any GILT fund, among Debt/Income Funds, my choice is HDFC Income Fund.
Also, while investing in Income Funds, go for Lumpsum and not via SIPs. I have gone through the portfolio of HDFC income Fund, and it looks quite attractive. Go for it.
Best of luck,
Srikanth Shankar Matrubai,
Bangalore

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

BHARTI AXA TAX ADVANTAGE FUND

BHARTI AXA TAX ADVANTAGE FUND
Yet another NFO, yet another Tax Scheme. The Bharti Axa AMC, which began operations in September 2008, has launched Bharti AXA Tax Advantage Fund, an open-end equity linked savings scheme.

This will be a diversified multi-cap fund. The fund won't be biased towards any sector or market capitalization. It also has a leeway to invest up to 20 per cent in debt and money market instruments.

MY TAKE
The fund house, being a new player, has a long way to go to prove its worth. At this point of time investor's have been extremely choosy about their investments. You can as well look at existing Well Performing Schemes Like Sundaram Tax Saver, Birla Tax Relief 96, etc.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

JP MORGAN INDIA TAX ADVANTAGE FUND

JP MORGAN INDIA TAX ADVANTAGE FUND
JPMorgan Asset Management India on Thursday launched its open-ended equity linked savings scheme (ELSS) – the JPMorgan India Tax Advantage Fund, which is benchmarked against the BSE 200 Index. The new fund offer opens on 18 December and will close on 16 January 2009.

The scheme is essentially an equity fund with a three-year lock-in period. The investment objective of the scheme is to generate income and long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related securities.

The scheme is eligible for tax deduction under section 80 C of the Income Tax Act.

Minimum initial application costs Rs. 500 per application and in multiples of Rs. 500 thereafter.
The fund is also the first green launch by JPMorgan Asset Management in the country. The attempt will be to minimise the use of paper by encouraging prospective investors to download all applicable literature from the website and print only as per specific requirement so as to ensure minimum wastage of paper.

Said Krishnamurthy Vijayan – CEO & whole-time director, JPMorgan Asset Management, "In a typical NFO, lakhs of application forms and other material is printed & distributed and less than probably 0.5% of them get utilised.

Imagine the number of trees we cut to run just one NFO. We must all become more conscious about this destruction. With this in mind, we decided that the JPMorgan India Tax Advantage Fund would be a green NFO."


MY TAKE :
JP Morgan has a unique way of assigning fund managers to its equity schemes. The AMC assigns four managers to each scheme. And like its previous two equity diversified funds, this fund will have four managers as well.However, looking at its existing schemes performance, this has not really worked well. And the brief history of this equity fund house does not make this new offer a compelling choice as it is difficult to ignore the existing 32 open-end tax saving funds, some of which have impressive track records.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Can minors invest in Mutual Funds?

Can minors invest in Mutual Funds?
Can minors can invest in a mutual fund? My son's maternal grandfather wants to give him a sizeable sum of money. He is a minor. I would like to invest it in an equity-based mutual fund for over 10 years. And I want to be the guardian for future transactions on behalf of my son.

- Sudhindra

Yes, minors can invest in a mutual fund, but only through a guardian. An adult, being a parent or a lawful guardian of the minor, can hold units of a mutual fund and deal with them on behalf of the minor. You need to furnish the asset management company (AMC) with a proof of age of your son and your capacity to hold and deal with the units.

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IDFC TAX FUND - AVOID

IDFC TAX FUND - AVOID
IDFC AMC which manages assets worth Rs 8,686 crore across 78 schemes (as on 30 November) has launched IDFC Tax Advantage (ELSS) Fund an open-ended equity linked saving scheme. This fund will invest in equity and equity related instruments
The IDFC Tax Advantage (ELSS) Fund with a minimum subscription of Rs. 500, will not only help investors avail of a tax benefit, but also seek to generate long term capital growth from a diversified portfolio of predominantly equity and equity related securities. The scheme will invest in well-managed growth companies that are available at a reasonable value and offer a high return growth potential.
Mr. Naval Bir Kumar, Managing Director, IDFC Mutual Fund says “We are happy to offer The IDFC Tax Advantage (ELSS) Fund to investors who are looking for a tax break as well as an easy and affordable way to take advantage of the growth potential of equity funds.” He continues, "The scheme will invest in well managed growth companies that are available at a reasonable value and offer a high return growth potential to investors,"
Idea distiller: IDFC does not have a tax plan as yet. As the last three months of a financial year see a lot of people rushing to invest in tax-saving schemes, it is an ideal time for IDFC to push an ELSS.
MY TAKE ON IDFC TAX FUND:
IDFC's equity funds have a rather brief history. Invest in this fund only if you want to go in for a low-cost NFO rather than an existing scheme with a higher NAV.
It is better to invest in a fund that has earned enough to reach a high NAV, some of them with compelling track record and a well defined portfolio characteristics and thus ensures dividends for the period that you are locked in, and has a fund manager who has excelled in managing assets across all cycles of the market.
In a nutshell, AVOID


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New LIC Policy - Jeevan Aastha

New LIC Policy - Jeevan Aastha
Dear friends,
Within a few days, A lot of freinds among u 'll receive phone calls from LIC agents on this policy- JEEVAN AASTHA.

Here is a detailed analysis of the policy for benefit for all of u as well as for ur friends. This mail is meant for making an informed decidion.

This new plan of LIC (Jeevan Aastha) although provide gtd. returns but plz. note the NET Yield is variable for different age person due to difference in prem. paid for the same amount of cover.

Some info for this policy is given below.
Minimum Sum assured = 150000 & can be purchsed in multiples of 30000
Max. Sum assured = No limit
Prem. type = single prem. only
Type of policy = Traditional endowment policy with gtd. return
Minimum entry age = 13 years (nearest birth day)
Max. entry age = 60 years (nearest birth day)
Policy term = 5 years or 10 years
in First policy year the SA = 6 times of Single prem. paid (appx.)
From 2nd year onwards SA = 2 times of single prem. paid (appx.)
Maturity SA = 1/6th of original SA
GTD. addition per year = 100 Rs. for per 000 maturity SA for 10Y plan & 90 Rs. for 5 year plan
Loan & surrender value = after completion of 1st policy year

Sample benefit illustration for a 35year normal healthy male stamdard life.
Age of life assured = 35 years
SA = 300000
Maturity SA = 1/6 of Initial SA = 50000
Single prem. = 48975
Term of policy = 10 years
In case of death during 1st policy year claim amount = Initial SA + GTD addition = 300000 + 5000 (@ 100 Rs. per 000 maturity SA for 50,000 maturity SA)
In case of death during 2nd to 10th year claim amount = 100000 (reduced SA) + GTD. addition of 5000 Rs. per year
Maturity amount after 10 years = 50000 (maturity SA) + 50000 (gtd. addition) + 10000 (lyality addition if any, not gtd.) = 110000 Rs.

From investment point of view (it `ll be the main sales pitch to be adopted by LIC agents al over india), the CAGR for above person = 8.43% with Loyality addition & 7.5% with out Loyality addition of 10000 Rs. which is non guaranteed.

My Take on jeevan Aastha plan -

It`s a carefully designed Fixed Maturity Plan (FMP). Yes u read it right, it`s indded a FMP as the term as well as returns r known to u before taking the policy & are almost gtd. in nature (just leaving loyality addition as a non gtd. one).
Being an ins. plan offeed by the largest Ins. co. of india, it`s also Tax efficient too. In the first year the SA is almost 6 times of single prem. hence 20% prem. to SA rule is taken care off at the time of investment. being investment oriented policy, from 2nd year the SA is reduced immediately to have lesser expenses for mortality charges.

The biggest catch lies in the GTD. bonus calculation.
PLZ. NOTE THE GTD. ADDITION `LL BE CALCULATED ON THE MATURITY SA ONLY WHICH IS 1/6TH OF INITIAL SA.

As the maturity amount is fixed for the policy term, the Net yield (CAGR) `ll be higher for persons in the age bracket of 13-35 years & `ll be very low for the persons in 45-60 age bracket. Anywhere from 6% to 7%. This is due to higher mortality charges for this age bracket.

My Judgement - This Policy is not suitable for any age class. for Y`ger people (20-35 age), the 10 year term can provide better returns from market linked instruments like Eq. & Debt. MFs. For older age people the return is not that much attractive. In fact for the persons who r in their 50s, the 10.5% bank FDs & PPF & Bhavishya Nirmaan Bonds (BNB) of Nabard r better option. as By that time the Ins. needs r over & even if one purchase it for ther partial ins. benefit, the real ins. is very poor.

Another reason why you should not invest in Jeevan Aastha
Let us say you have invested Rs 10,000.
In ten years if your amount has doubled to Rs 20,000 - then the return is 72 / 10 = 7.2%. If your returns are 8% - then the time taken to double your money is 72/8 = 9 years.
The formula is -

72 / rate of return = no of years to double your money or
72/ no of years to double your money = rate of return.

The new JEEVAN AASTHA policy - your money approximately doubles in 10 years.
So the rate of return is 72 /10 = 7.2% (approx) and not 10% as projected by your insurance agent.

Regulars to this Blog know that I hate Combining Insurance with Investment. My advise has always been, and will continue be, For Insurance Take Term Plan, which is the cheapest form of Insurance and then invest the remaining in Diversified Equity Funds. Finally, my advise on Jeevan Aastha is,

- PLZ. DON`T TAKE THIS POLICY. -
Best of luck,
Srikanth Shankar Matrubai



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Best Funds for A Cautious Investor

Best Funds for A Cautious Investor
ASiingh wrote :
DSPBR T.I.G.E.R. Reg-G - 10%
Kotak 30-G -25%
Magnum Contra-G - 20%
Reliance Growth-G - 20%
Sund. BNP Par. Select Focus Reg-G - 25%

This combination is also Giant/Large cap heavy so is safer. Monthly allocation percentage indicated. What do you feel ?

SRIKANTH SHANKAR MATRUBAI replied :

Dear Asiingh,
Three of the funds chosen by you would not be a good idea for Cautious Investors., namely DSPBR Tiger Fund, Reliance Growth and SBI Magnum Contra fund.
DSPBR is a Infrastructure Sector Oriented Fund and is very volatile and for a cautious investor will not be a very wise investment.
Reliance Growth Fund has had a terrific past and the future too should be good, but the fund is heavily titled towards Mid-caps and I would avoid this fund too.
SBI Magnum Contra Fund has had a good past, but the frequent change in the Fund Manager is starting to tell on the performance of the Fund and also the Fund`s strategy could change anytime from being a Diversified Fund to a Contrarian Fund, for which it was initially conceptualised.

Instead my 3 funds to compliment your other 2 funds would be
HDFC Prudence Fund - A Balanced Fund which has a unmatched past through bull and bear runs.
DSPBR Top 100 Fund - Again a Fund with a Clean Record.
Fidelity Equity Fund - A Go Anywhere Fund with a good record in Bear Markets (for more on this, visit goodfundadvisor dot blogspot dot com)
So, the final selection would be
DSPBR Top 100 Fund
Fidelity Equity Fund
HDFC Prudence Fund
Kotak K30 Fund
Sundaram Select Focus Fund

By the way, I would have a equal propotion of 20% each in these 5 funds.

Best of luck,
Srikanth Shankar Matrubai


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Fidelity Equity Fund - HOLD

Fidelity Equity Fund - HOLD
Dear all,
Fidelity Equity Fund is "go anywhere" fund. The scheme endeavours to invest across the market capitalisation range, and seeks to identify trends ahead of the markets to generate returns. The scheme follows a bottom up approach towards stock selection, and looks to include a number of stocks in the portfolio to mitigate risk, which maybe as many as 75 stocks in a month as per the offer document.
Fidelity Equity Fund with average Assets Under Management (AUM) at around 1982 crores is among the Largest Funds in the Indian Mutual Fund Industry. It has been a steady performer since inception. It has always been in the top quartile within Diversified Funds category. Its 1 year performance has been, as you can expect, nothing to rave about. It is down by 51% but better than the Category Average of -56%.
The Fund has had a policy of having 60-80 stocks in its portfolio since inception. While many feel that this may result in overdiversification, what is noteworthy is that the fund is concentrated enough in large cap with large cap accounting for more than 65% of its portfolio and with no single stock exceeding 5 per cent except for Reliance at 7%.
Its top ten holdings are

Reliance Industries 7.34
SBI 4.56
HDFC 4.19
Infosys Technologies 3.95
B H E L 3.72
Bharti Airtel 3.34
ICICI Bank 3.10
I T C 3.04
Hindustan Unilever 3.04
Cipla 2.87

The diversified investment strategy is reflected in its sector allocation as well, with the top three sectors accounting for a little more than a third of the portfolio. Holdings in each sector include 7-8 stocks. Fidelity Equity aims to focus on companies that are in an investment phase, that are set to benefit from domestic consumption and those businesses that are internationally scalable. Going by the quarterly and half-yearly disclosures, the fund seems to have consistent investment views.

Going by the portfolio and its investment strategy, the fund appears to be conservative and well suited to risk-averse investors. The diversified spread appears to have come in handy during highly volatile market phases, including the recent one.
In recent months, despite the widening valuation gap between large- and mid-caps, mid-cap allocation has remained at about 25 per cent. This large-cap bias may have reduced the fund’s vulnerability to the recent market meltdown. Banking occupies the top slot in the portfoliothe fund has had a bias towards banking since the time of its launch, expecting the sector to benefit from the ongoing capex of Indian companies. In recent times as well, despite fears in the market that hikes in interest rates would hurt profitability, banking continues to be the top sector in its portfolio.
Fidelity Equity Fund has since its inception been my favourite. I recommend you to HOLD the fund, if you do not own, you sure should add the fund to your portfolio. The fund should outperform its Benchmark comfortably in coming years.
Best of luck,
Srikanth Shankar Matrubai,
Bangalore

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Will things change for the Better?

Will things change for the Better?
Dear all,
Greetings,
Everyone is witnessing one of the most turbulent times in the Indian and Global stock markets and particularly people like us engaged in the financial
advisory business are witnessing a tougher time to answer the questions of the customers.
In US the meltdown has happened because of the cheap credit availability in 2001-2002 when the Fed Funds Rate were reduced to 1%. The greedy
mortgage companies and investment bankers with a view that the property prices will always rise borrowed this cheap credit and funded/invested in the
high risky sub prime mortgage market. The funding was made available to anyone and everyone without scrutinizing their ability to repay and many of these
investment banks and mortgage companies were leveraged to an extent of 30-40 times of their capital.
_______________________________________________________________________________

Rate of Return Income
________________________________________________________________________________
Investments 3000 10% 300
Loan 2900 8% 232
Capital/NW 68% 68

Return on Capital 68%
________________________________________________________________________________



The above table shows what the greedy lenders were doing. They were making handsome returns on their capital. On capital of 100 they were making 68
and earning 68% return.
Now what happens if the property prices fall?

___________________________________________________________________________________

Value falls by 4% Value falls by 20%
__________________________________________________________________________________
Investments 3000 2880 2400
Loan 2900 2900 2900
Capital/NW 20 -20 -500

__________________________________________________________________________________


As we can see from above table when value of investment falls by only 4% the value of investment becomes 2880 against original investment of 3000. So on
a capital of 100 the loss of investment comes to 120. Enough to wipe off their entire capital.
The above table shows just a fall of 4% in property prices one becomes insolvent.
There has been over 500 billion dollars of such NPAs in the US. That's not the only problem but the larger problem is that the banks have become very
cautious in lending. They are hardly lending as they see all the borrowers with a jaundiced eye, seeing them becoming bankrupt. Banks are the main entities
to create credit flow and liquidity in the markets. This behavior of banks has added fuel to fire.
Also as one institution or bank provides for NPA they take a hit on their capital (For eg if the capital of Bank is 100 and NPA is 2 then the Capital becomes
98) so they have to infuse new capital against their hit to meet the capital adequacy requirements. Since it has become very difficult to raise capital in
current times, these banks are selling assets to meet those capital adequacy requirements that are adding to the problem.
What can be the impact on Indian Equity Markets?
Financial Crisis (Indian financial sector becoming insolvent)
Profit Growth Rates
Liquidity Flows
If we look at the above points one by one, i.e. Financial Crisis
India has hardly any exposure to such sub prime or bad assets.
Indian Banks are adequately capitalized. Some of the prudential norms are as follows.
The Indian Banks are supposed to maintain
25% SLR, i.e. they have to put 25% of their total funds into government securities
9% CRR, i.e. maintain 9% cash balance with RBI (Have been reduced to 6.5% to infuse liquidity)
So out of the 100 Rs they have 30-34 Rs that is extremely safe with government of India.
The Capital Adequacy Ratio of various banks are in the range of 11% -12%
i.e. the banks have landed to an extent of 8-9 times of their capital unlike in US where the borrowing were 30 -40 times of the capital.
So the Indian Banks or Financial institutions becoming bankrupt look unlikely. We have seen a South East Asian Crisis in 1997 however the same did not
impact the Indian Banking System.
There are some concerns related to the crisis in the debt schemes of mutual funds, the crisis again has occurred due to heavy redemption pressures from
the Institutional investors and not because of poor credit of papers being held by mutual fund debt schemes.
Approximately 40% of the mutual funds debt portfolio is in CDs (Certificate of Deposits) of bank that is highly liquid and government is also taking steps to
infuse liquidity in the system, a detailed analysis on the same is being worked out by our research team and shall be sent to you. We believe this is a
temporary phenomenon and all the debt schemes shall start getting inflows very soon.
Impact on Growth Rate
India has been growing at 9%+ for a last few years, there could be some impact on the same because of the global slowdown however that should be
marginal. Indian exports are only 18% of the GDP so we are not dependent on US to drive our growth. In certain sectors and business, which are dependent
on the global markets or global capital one may see some reduction in the growth rates.

But we have a very strong domestic consumption that is intact and is going to happen. The infrastructure growth is going to take place.
Within the negatives there are big positives also like reduction in global commodity prices that was a concern before a few months. The oil prices have fallen
from 150 dollars per barrel to 70 dollars per barrel that is a big positive for India to control inflation and interest rates.
In toto, one can conservatively expect India to grow at least 6%-7% and to my mind these are decent growth rates compared to the world economy.
The markets are again available at extremely cheap valuations as they are trading close to 10 times the P/E multiples.
The market valuations are like the one seen in 2003 when the EPS was 300 and markets were 3000 in 2003 i.e P/E Ratio between 9-10 (which is historically
the lowest range). From those levels i.e. 2003 if see the markets even at these levels in the worst market condition i.e after falling by 50% the SENSEX has
grown 3 -3.5 times translating into a return of 25% CAGR in the last five years (i.e 2003-2008)
Currently the markets are at similar levels where the EPS is close to 950 and markets are at 10000 i.e approximately P/E of 10.
You may imagine where can the markets go in the next five years from now..........
People understand the same but the concerns or worries are of Liquidity flows or market timing....
The markets have fallen drastically because of panic selling from FIIs. YTD selling by FII is close to 11 billion US Dollars.
The market cap of FIIs was 400 Billion dollars when the markets were 21000 and it has now reduced to close to 90 billion dollars because of
Fall in stock prices
Depreciation of Rupee
Panic selling
We may not see inflows from FIIs for some time to come and further outflows may take place which may not allow the market to move further however we
don't require to be dependent on FII flows to move our markets because we are savings economy and close to 300 billion dollars of savings takes place
every year.
Last year we got inflows to an extent of 16 billion dollars from Insurance Companies and 3.5 billion dollars from mutual funds. This financial year also mutual
funds have net invested close to Rs. 4265.5 cr or 1 Billion US Dollars into equities till 20th Oct 2008.
Even if we can as advisors convert 5% of such savings into mutual funds through SIP route we get ample amount of liquidity from the Indian Consumers for
the markets to rise, I think this is the time to act and make the Indian Consumers rich.
We have been saying the same thing again and again and are getting wrong every day. Customers are not interested in listening to what we are saying
however we will have to repeat the same thing, as it is being said by investment stalwarts and we have told at several occasions, I would like to reiterate
those words and will experience how powerful these words are.
Sir Warren Buffet
"It is the time that matters and not the market timing."
"We enjoy the process far more than the proceeds."
"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."
Sir Benjamin Graham
"It is the patience that gets tested and it is the conviction that gets rewarded."
Sir John Templeton
"Buy value not price."
"Buying low is a simple concept but how difficult it is to execute."
The world has witnessed such troubled times in the past also however the world has never come to an end and the world has come out of
such times.
Everything in the world is changing; the current situation will also change.
I don't know when it will change, but it will change certainly.
It is a great opportunity to make our investors rich; this is the time to ACT.
It is the test of patience. Be cool, patient and don't shy away to face the investor if the investor gets irked, just listen silently because that will also change. It
is a matter of time and you will have to repeat the same thing again and again to boost the investors' confidence as he is being bombarded negatively
through other quadrants of the society (mainly media).
Read a few of the above quotes you like and I am sure that current meltdown shall make all of us much stronger and instill a lot more conviction into all of
us, but that will happen with time, and believe me Time Flies.
Take Heart
Srikanth Shankar Matrubai



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Can I expect 100% return in 3 years?

Can I expect 100% return in 3 years?
One blogger Mr.Rakesh wrote :
Hi,

i have seen your blog .

i am at 24 now.I am planning to invest in mutual fund rs 2000/month .
But i want it as tax saver which comes under 1 lack .where i can invest
. actually i finalised earlier that sbi magnum tax saver 93 .but after
seeing your comments on it,i want a review on it. Please tell me best
break up and good fund for my 2000/month for long term 3 -5 years.

I am planning to invest in share market about rs 20000 because now the
market is down . I heard that i can get 100% return within 3 years.
Please tell me some stocks which i can hold for long term again 3-5
years.May be after 4 months i may be able to invest another 20000 agian.

Please help.

regards,
Rakesh

SRIKANTH SHANKAR MATRUBAI replied :
Dear Rakesh,
First of all, scale down your return expectation of 100% return within 3 years. It is too ambitious. For you age, you can think of Long Term and can go for Good Diversified Funds which would 9 out of 10 times give you best returns among all the other categories of funds.
But, since you have asked about Tax Funds, I will stick to it. Regarding SBI magnum Tax Gain 93, you can read my detailed analysis on my blog www.goodfundadvisor.blogspot.com. I still feel that the funds corpus is too bloated to give comfort. I feel you better split your 2000 into 4 funds of 500 each. And my shortlist is
Birla Sunlife Tax Saver 96
DWS Tax Saving Fund (additional benefit of Free Life Insurance)
Fidelity Tax Advantage Fund
Sundaram Tax Saver Fund

All the above funds have good track record, except for DWS which has been very volatile, but expectedly so because of its smaller corpus. If you want to stick to only two of the above, I recommend Sundaram and Birla.

Regarding stocks for 3-5 years, my picks would be
Fortis Healthcare
Opto Circuits
Tata Chemicals
BOC India
Indraprasta Gas

Split your investments into the above stocks and keep adding them at every fall. These stocks are not very sexy and exciting and hence you would find very few brokers recommending them, but I have not done quite a lengthy research and have no hesitation in recommending to you too.
Best of luck,
Srikanth Shankar Matrubai,



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Shall I exit Now?

Shall I exit Now?
I have invested in HDFC Long Term Equity Fund (G), HDFC Prudence Fund (D) , ICICI Pru Infrastructure (D), ICICI Pru Services Industries (D), SBI Blue Chip Fund (D) , Tata Pure Equity Fund (D), UTI Leadership Equity Fund (D), and UTI Wealth Builder Fund (D). Should I exit any of these funds or hold them?
Kajal

SRIKANTH SHANKAR MATRUBAI advises :

Not only you have too many funds in your portfolio but also you have too many Sector funds, that too those funds which have been underpeformer since launch.
Your portfolio needs a major rejig.
Even though HDFC long Term Equity fund and UTI Wealth Builder Fund, I suggest you to switch immediately from the above funds to HDFC Prudence Fund and UTI dividend Yield Fund at once.
You also need to switch from both the ICICI funds you are now holding to ICICI Dynamic fund
You can retain your existing investment in HDFC Prudence, Tata Pure Equity and UTI leadership Funds.
This is not right time to sell. You should instead consider starting a sip in HDFC Prudence Fund and DSPML Equity fund.
These funds should provide you good returns over a period of 2 years.
You can also visit my blog goodfundadvisor.blogspot.com for detailed information and advise.
REgards,
Srikanth shankar Matrubai

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Lesson learnt in this Market Meltdown

Lesson learnt in this Market Meltdown
This Blog by me was printed in Financial Chronicle. You can visit http://www.mydigitalfc.com/stock-market/lesson-learnt-market-meltdown for details
You are here Home Blog
Lesson Learnt in this Market Meltdown
Nov 09 2008

By Srikanth Shankar Matrubai

The five year Big Bull run made everyone that there will always be sunshine. We tended to ignore warning signs and just brushed them aside as an aberration. I was no exception. Have I lost money?. Yes and no. Yes, because I am stuck with an asset which at a given point of time would fetch a lower valuation. NO, because, the loss is only notional.
I have seen two Bear Runs. First, post the Harshad Mehta Scam in 1992-93, next the Technology Meltdown in 2001. I learnt two Different Lessons in these Bear Runs.

In the first Meltdown, I learnt that "Never Invest All your Money at one go, it may the peak you are investing". In that Meltdown, where I burnt my finger as speculator, I qualified to become myself as an Investor. Lesson Learnt : Invest regularly at periodic intervals.

In the second Meltdown, I learnt that "Never Overexposure yourself to One Particular Sector". Lesson Learnt : Do not put all your eggs in 1 Basket. And the Biggest lesson which I learnt from this Bear phase is that I sold Good Stocks to protect my Huge losses in my Bad Stocks. So, ultimately, I was left with Dud Stocks and devoid of Blue Chips. And it took nearly 3 years to get my portfolio on the right track.

And in this present Meltdown, I have learnt not one but Two Big lesson, First, Book Profits Periodically.
Second, Spread Your Investment across Asset Classes including Debt.

I have taken these losses as tuition fees that I have paid to learn from the Markets.

The Biggest Reason why investors lost heavily in this market was due to the prolonged Bull run of 5 years, which made people invest without doing any research due to stocks going up almost every other day.

For me, the market is like an ocean. Anything you throw into the ocean always come back. Whatever you throw into the market will ultimately come back, provided you follow the market discipline.

I may sound naive, but I don't think I've lost anything. That is I have lost money on paper, which I had bought long long time age, and I am sure they will be back up sooner rather than later. The stock market going down doesn't mean the end of the world. The compaines I hold still continue to rake in profits.

But, yes, my faith to be completely invested in equities has been ripped to shreds, as the even the bluest of blue chips have got hammered. So, while I have not changed my current holdings, I will be looking to change my future asset allocation with a provision for debts and a bit of cash reserves to go with.

But, thankfully, I am not even 40 yet, so retirement is still a long way. I am sleeping peacefully, for I know I do not need this money for another 15 years at least.

My advice would also be on the same lines. It is always wise to have a properly diversified investment strategy based on your risk tolerance and as you age, you should become more conservative and shed your aggressiveness and shift towards debt and Large Cap Mutual funds.

I also plan to diversify further by investing in some International Funds.

I also plan to invest through SIPs to take advantage of NAV volatility (and indirectly time the market!) and restrain myself from making Lumpsum Investment.

I also plan to diversify further by investing in Other Asset Classes too like Gold, Silver and commodity funds by committing a small percentage.

I have decided not to borrow funds for investing. (this lesson I learnt in 1992-93 bear run).

I have decided to avoid ULIPs.

I intend to invest only for Long Term.

I`d like to end with some quotes that are defining my behaviour on the market these days -'Be fearful when people are greedy and be greedy when people are fearful.' - Warren Buffet

“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell,” - Sir John Templeton (founder of Franklin-Templeton).

'buy when there`s blood in the streets'


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SIP to continue or NOT

SIP to continue or NOT
Mr.vikas wrote :
Hi there

Got your contact on Good fund Advisor and need your views on my investment thru SIP as below


1. SBI Contra --10000

2. Reliance Growth --10000

3. UTI --10000

4. Reliance Diversified --3000


I have been in this investment since September 08.Would it be advisable to continue with the SIP or withdraw to avoid further losses.The funds overall have lost almost 35-40%.

I am told by various colleagues that we must stop (without encashing) and invest money in a Fixed Deposit.

I do not have a problem of waiting for 2-3 years but need to get a professional guidance on which is a better option to move ahead

Cheers

Vikas Milhoutra

SRIKANTH SHANKAR MATRUBAI advised :

Dear Vikas,
True, you have lost money, but you are not alone, whoever has invested has lost in the Bear market. Your funds seem to be good and there is no reason why you should not continue with the same. You have not given as which fund in UTI, your sip is going. It would have made my job easier.
With your horizon of 2-3 years, these funds should give you returns MORE than Fixed Deposits. Whoever advised you to stop this Sips and invest in FDs need a lesson on how Inflation and Taxes eat away your FD returns. You are better off investing in Mutual Funds through SIPs.
You do have good set of funds (I am counting only 3, as I do not know which UTI fund you have invested in), however, you do need to have a Good Solid Large Cap Fund to compliment your existing portfolio. For this, you can look at
Birla Sunlife Frontline Equity fund
DSP Blackrock Top 100 Fund
HDFC Top 200 fund
Sundaram Select Focus Fund

among others.

Either you add another 10000 monthly to any of the above funds, or reduce your existing sip from 10000 to 5000 in both SBI Contra and Reliance Growth and invest the saved 10000 in the above fund.

Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

UTI Gold-Equity Fund

UTI Gold-Equity Fund
Mr.Sridhar wrote
"sir, I like your blog goodfundadvisor very much. Can you please throw light on the new fund UTI Wealth Builder Fund which has a combination of Gold and Equity"

SRIKANTH SHANKAR MATRUBAI replied :
Dear Sridhar,
UTI-Wealth Builder Fund - Series II, is an open-ended equity oriented scheme. The objective of the Scheme is to achieve long term capital appreciation by investing predominantly in a diversified portfolio of equity and equity related instruments along with investments in Gold ETFs and Debt and Money Market Instruments.
The fund aims to invest about 65% in equities and 35% in Gold ETFs and debt instruments.
This combination of equity, debt and gold is an innovative scheme and looking at the asset allocation and large cap tilt, it should be a conservative offering with low volatility.
Gold has been one asset that has been counter-cyclical in nature and hence an ideal asset in portfolio diversification.
Thus this fund will be a Low risk and Low Return Fund as it be investing mainly in Large Caps.
This Fund is for Ultra Conservative Investor with a view to have slight exposure to Equities. Sure, invest in this fund, if you want to have a Low Risk Low Return Fund. I do not expect this fund to give you returns more than 12% on an average. Even in Super Bull Market, the fund could give a max of 15-18% return.
Instead you can consider investing in Good diversified Equity fund and some allocation to Gold ETfs.
Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

IS IT THE RIGHT TIME TO INVEST??????

this is the most common question asked now. There were less people asking this question when the sensex was over 20,000. This is sad.

Equity is for the long term. Investment in equity/ equity funds depend only on 2 things -

1) Your asset allocation

2) Your age

3) Your horizon.

Once you have made an asset allocation according to your age & risk appetite -
you should start investing in equity/equity funds. So any time is right time. Please do not look at the sensex level. If the sensex is lower, it is better for you and there is a more compelling reason to start investing. Ideally you should invest only via SIP.
When you are entering a fund - you should not look at the NAV of the fund. You should look at only the performance of the fund in the last 3 to 5 years.
Similarly, do not look at the sensex levels. With inflation over 11% - equity is your best chance to beat it. If you are young - you can afford to be more aggressive.

One more thing I would like to add here is;;; …
While investing, never ever invest Borrowed Money, Always invest your own money and most importantly your spare money.
In fact, for some who crib that they have practically no saving and even 1000 saving is difficult, my answer is, would you have not adjusted the 1000 if you had to give as interest on a loan taken?
And don’t forget that there is even 100 sip available with Reliance Mutual Fund and Lotus Mutual Fund.
I don’t think any other investment will allow you such flexibility.
Go for Mutual funds and see your money prosper.
Best of luck.

Srikanth Shankar Matrubai


Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Monday, February 23, 2009

Portfolio advise needed

Mr.Raghu wrote ;
Hi


I would like to thank you for providing wonderful guidence for us. Your goodfundadvisor.blogspot.com has helped me to choose the best funds.


i am 32 yr old and my investment plan is 5-10 yrs.

my portfulio is 1000 rs SIP in the following funds.


DSP Top 100 Equity
DSP Balanced
Reliance RSF Equity
Sundaram Select Focus
Fidelity Equity
Templeton Equity Income


iam also putting money requied for short time in DWS money plus dividend fund on time to time.


i can put another 3000 rs as sip in equity. in which of these funds i should increase sip or should i add any other fund missing from my portfolio


SRIKANTH SHANKAR MATRUBAI replied :

Dear Raghu,
First of all, thank you for your nice words.
You have a good mix of funds in your portfolio. Your portfolio need very little tinkering. You can reconsider your sip in Reliance Regular Savings Fund-Equity Fund because of its slight overexposure to mid-caps and small caps. It sure had a terrific run in the past one year or so, but I would be more comfortable with Reliance Growth Or a Reliance Vision fund rather this fund.
You can also consider adding DSPML/Reliance Natural Resources fund to your portfolio. Going forward, most fund managers are of a view that natural resources should be a outperformer.
Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

loss in existing sips, what to do?

Rajeev Bora wrote :

Substantial Loss in existing SIPs (over last one year) –portfolio
as in following funds– may please advise for future course of action.

Birla Sun Life Frontline Equity-D
DSPML T.I.G.E.R. Reg-D
HDFC Top 200-D
Kotak Opportunities-D
Magnum Contra-D
Magnum Multiplier Plus-G
Reliance Diversified Power Sector Retail-G
Reliance Diversified Power Sector Retail-G
Reliance Growth-D
Reliance Natural Resources Retail-G
Reliance NRI Equity-G
Reliance Regular Savings Equity
Sundaram BNP Paribas Select Focus Reg-D

Tata Indo Global Infrastructure-D
Tata Infrastructure-D
Tata Infrastructure-G

Please advise....
Rajeev Bora



SRIKANTH SHANKAR MATRUBAI replied :
Dear rajeev,
My sympathies lie with you. This Market Meltdown has not spared anyone and you are no exception. Most of your investments are into good funds and need very little tinkering.
While I would advise you to completely switch from Reliance Diversified Power Sector Fund into Reliance Vision Fund, even at a loss, as Reliance Vision has better prospects than Reliance Diversified Power Fund.
You also have two other Infrastructure Fund in Tata Infrastructure Fund and Tata Indo Global Infrastructure Fund. You need to again switch over here from Tata Infrastructure fund to Tata Pure Equity fund, which has a very Good Track Record.
However, all your other funds are very good and do continue your sip in these, you are sure to not only get back your investment but also make decent profits in about 3 years time.
If possible, add Franklin Templeton PE Ration Fund of Funds, which is my latest recommendation to ALL clients. This Fund automatically increases/decreases exposure to Equity/Debt depending on PE Ratio of the Sensex and would compliment your portfolio.
Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

FDs or Mutual funds?

Purvesh asked :
Hi is investing in FDs or mutual funds a better idea in current market conditions a goof idea, if MF then which funds are safe to invest

SRIKANTH SHANKAR MATRUBAI replied :
Hi, purvesh,
If your outlook is short term of say below 6 months, then FDs are the best option for you, anything above 6 months, definetely you should consider Stock Markets seriously.
The ongoing volatility clearly shows that the stock selection, entry exit points are best left to experts, and who better than Mutual Fund Managers to manage our money. If you look at the recent history, almost all Funds are sitting on cash of above 30%, and in some cases, even 40%, which clearly shows that they had a feeling of this meltdown.
Of course, the meltdown was so savage that even the most intelligent Fund Manager would have been stumped.
But, still, my vote is go for Mutual funds through SIPs. Invest in good Diversified funds with Good track record. some of them you can consider for investing are
Birla sunlife Equity fund
DSP Equity fund
DWS Alpha Equity Fund
Fidelity Equity Fund
HDFC Prudence Fund
HDFC top 200 Fund
Kotak K 30 fund
Reliance Growth Fund
Sundaram Select Focus fund

Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Lesson learnt by me in this Market Crash

The five year Big Bull run made everyone that there will always be sunshine. We tended to ignore warning signs and just brushed them aside as an aberration. I was no exception. Have I lost money?. Yes and no. Yes, because I am stuck with an asset which at a given point of time would fetch a lower valuation. NO, because, the loss is only notional.
I have seen two Bear Runs. First, post the Harshad Mehta Scam in 1992-93, next the Technology Meltdown in 2001. I learnt two Different Lessons in these Bear Runs.
In the first Meltdown, I learnt that "Never Invest All your Money at one go, it may the peak you are investing". In that Meltdown, where I burnt my finger as speculator, I qualified to become myself as an Investor. Lesson Learnt : Invest regularly at periodic intervals.
In the second Meltdown, I learnt that "Never Overexposure yourself to One Particular Sector". Lesson Learnt : Do not put all your eggs in 1 Basket. And the Biggest lesson which I learnt from this Bear phase is that I sold Good Stocks to protect my Huge losses in my Bad Stocks. So, ultimately, I was left with Dud Stocks and devoid of Blue Chips. And it took nearly 3 years to get my portfolio on the right track.
And in this present Meltdown, I have learnt not one but Two Big lesson, First, Book Profits Periodically.
Second, Spread Your Investment across Asset Classes including Debt.
I have taken these losses as tuition fees that I have paid to learn from the Markets.
The Biggest Reason why investors lost heavily in this market was due to the prolonged Bull run of 5 years, which made people invest without doing any research due to stocks going up almost every other day.
For me, the market is like an ocean. Anything you throw into the ocean always come back. Whatever you throw into the market will ultimately come back, provided you follow the market discipline.

I may sound naive, but I don't think I've lost anything. That is I have lost money on paper, which I had bought long long time age, and I am sure they will be back up sooner rather than later. The stock market going down doesn't mean the end of the world. The compaines I hold still continue to rake in profits.

But, yes, my faith to be completely invested in equities has been ripped to shreds, as the even the bluest of blue chips have got hammered. So, while I have not changed my current holdings, I will be looking to change my future asset allocation with a provision for debts and a bit of cash reserves to go with.
But, thankfully, I am not even 40 yet, so retirement is still a long way. I am sleeping peacefully, for I know I do not need this money for another 15 years at least.

My advice would also be on the same lines. It is always wise to have a properly diversified investment strategy based on your risk tolerance and as you age, you should become more conservative and shed your aggressiveness and shift towards debt and Large Cap Mutual funds.
I also plan to diversify further by investing in some International Funds.
I also plan to invest through SIPs to take advantage of NAV volatility (and indirectly time the market!) and restrain myself from making Lumpsum Investment.
I also plan to diversify further by investing in Other Asset Classes too like Gold, Silver and commodity funds by committing a small percentage.
I have decided not to borrow funds for investing. (this lesson I learnt in 1992-93 bear run).
I have decided to avoid ULIPs.
I intend to invest only for Long Term.
Best of luck,
Srikanth Shankar matrubai


Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Good Funds in these Crisis Times....

One blogger Mr.Kumar, queried :
"
Sir,


Your blog has really helped me gain a fair amount of knowledge about mutual funds.


In this time of crisis, please let me know which MFs are good to buy. After buying them, I can wait for a minimum of 3 years. I am new to MFs, about 7-8 months ago bought SBI's Tax gain and Tax advantage, each 25k worth, one time investment, both not doing well, and recently about 2 months ago bought 5k worth of Reliance Natural Resources growth fund units. I can invest/save about 10k per month. Please advise me as to which funds I can invest in at the moment. Thank you.
G S Kumar


SRIKANTH SHANKAR MATRUBAI advised :

Dear G,
Your present investments are not doing well in line with the market. So, there is no point in worrying about them. You seem to have invested during the peak of the markets and hence the decline. Out of your 3 existing funds, two, namely, SBI Tax Gain and Reliance Natural Resources Fund are good and can be held on. However, SBI Tax Advantage is not a good investment, moreover, it is a 10 year Close ended Fund. You have very little option, expect to hold on this fund also.
While 3 years is a good enough time for a fund to deliver above average market returns, it would be wise if you spread your investment into 5 fund with 2000 each. Go for different dates.
My pick of funds for you are :
1. Birla sunlife equity Fund
2. DSP Top 100 Fund
3. Fidelity Equity fund
4. HDFC Prudence Fund
5. Sundaram Select Focus fund
You can split your sips into 1000 each (500 in Fidelity and Sundaram) and invest on different dates to take maximum advantage of NAV Volatility and earn that extra. \
Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Want to have 2 crores in 10 years

Blogger Prathibha Mahesh asked :
Please review my portfolio and advice on my next financial move.

Age 30

Looking for a retirement kitty of 2 Crores by 40.

Current Investments:

SIP 25 K per month ( Current Value : 5.75 Lakh )

Fidelity Equity Fund - Gr 2500
HDFC Equity Fund - Gr. 10000
HDFC Prudence - Gr. 10000
Reliance Vision Fund Gr 2500

ICICI Life Time ( 30k Per Year Started in 2003 ) Current Value 1.9 Lakh

PF 2.9 Lakh
PPF 1.04 Lakh
401 K : 1.07 Lakh ( will be investing here for next 2 years to get company match as I am in US right now )
NSC : 10 thousand
Flat in Bangalore bought in 2004 for 15 Lakh. Current Price is around 35 Lakh. Loan Amount left 5.9 Lakh 13.5% interest

Fixed Deposit : 8 Lakh
Emergency Fund : 2.3 Lakh
Stocks : 30K

I want to invest another 10 K per month through SIP. Pls suggest some funds.

Thank you,
Pratibha Mahesh



SRIKANTH SHANKAR MATRUBAI advised :
Dear Pratibha Mahesh,
You seem to be on the right track to accumulate 2 crores in about 10 years time. Your present sip investments are all very good, a tad conservative I feel. However, because of this, you have been saved the pain of the BIG downturn other funds had to face. Going forward, you should consider switching your 10000 sip of HDFC Equity into two sips of 5000 each in
Sundaram Select Focus Fund
Birla Sunlife Equity Fund.
Since your goal is 10 years, you do have sufficient time on your hand to allow your fund to grow. Your 25k sip should at a conservative estimated return of 15% easily give you 65lakhs.
You intend to invest another 10k per month, so your investment of 35k per month should give 92 lakhs in 10 years time at a conservative return assumption of 15%. So, you are on the right track.
You also need to rejig your existing 25000 sip. So, ultimately your 35000 sip should go to the following funds, in the manner explained:
Birla Sunlife Equity fund -- 5000
DSPML Top 100 Fund -- 5000
HDFC Prudence Fund -- 7500
HDFC Top 200 Fund -- 5000
Reliance Growth Fund -- 5000
Reliance Natural Resources Fund -- 2500
Sundaram Select Focus -- 5000

These funds should over a period of 10 years give you Good Returns and help you in accumulate your retirement kitty of 2 crores very easily.
Best of luck,
Srikanth Shankar Matrubai

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Advise on my portfolio

Hello sir

I have gone thrugh your while searchin for SIP ivestment.It provided me with some useful insights regarding SIP.I am a 21 year old working software professional, i would like to invest 3000 in SIP that would be a part of MBA expenses.So i'm investing 1500 which would give me tax benefits and d other 1500 in equity growth fund the following is my portfolio.

1000- Sundaram paribas BNP tax saver
500- principal tax saver
1000- reliance growth ( targetted at small and midcap )
500- Sundaram Select Focus ( targetted at Large cap )

Plz advice on my portfolio.should i go for reliance growth or hdfc growth or reliance rsf growth.
Thanking you

swamy

SRIKANTH SHANKAR MATRUBAI advised :
Dear Vemula Swamy,
Congratualtions Vemula Swamy, your portfolio is one of those rare ones which is perfect and needs little or no changes. Say thanks to your advisor. Your portfolio is a perfect blend of Large Cap and Diversified Equity. Continue with the same.
Regarding your second query, between reliance growth or hdfc growth or reliance rsf growth, I prefer HDFC Growth as you already have Reliance Growth. However, I would prefer you add Fidelity Equity Growth rather than the above mentioned 3 funds.
Best of luck,
Srikanth Shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Is my SIP investments in the right funds?

One blogger Mr.Nishan Asher queried "

Hello,



I have an SIP plan in the following companies, please let me know if should continue stay invested with the same amount or should I stop or reduce the amount I invest monthly.



I am right now investing a Rs 5000 per month in each SIP



Birla Sunlife Mutual Fund – BSL Midcap Fund – Growth (B251G)


DSP Merill Lynch Mutual Fund – DSP India T.I.G.E.R Fund Grow-Reg (D13)



SBI Mutual Fund – Magnum Global Fund – G (L021G)


Sundaram CAPEX – Growth (S82)



Regards,


Nishan


SRIKANTH SHANKAR MATRUBAI replied :

Dear Nishan Asher,
Sadly, your portfolio lacks Good Solid Large Cap Funds. Stop your sips in all the existing funds IMMEDIATELY!!!!!.
Birla Midcap Fund, as the name suggests, is a Mid Cap Fund, which had a good run in the bullish times but now as with the case of all Mid Cap Funds, had a horrendously poor run. Mid cap funds do not look attractive even with a 3 years perspective. Stop your sip and for your existing investment, think about switching to Birla Sunlife Equity Fund.
DSP Tiger Fund and Sundaram Capex fund are both Thematic Funds. Both funds are heavily invested in Infrastructure stocks. With the economy taking a breather and Infrastructure Sector's future not looking rosy, you need to look elsewhere. Stop your sip in both the funds. Stay invested in both the funds for now.
SBI Magnum Global Fund is a Diversified Fund, but had a terrible past and a very poor track record. Stop your sip immediately and switch to SBI Bluechip Fund.
You can look at investing your 5000 * 4 sip into these funds, with different dates in each fund to take maximum advantage of NAV volatility.
1. Fidelity Equity Fund.
2. HDFC Prudence Fund
3. Reliance Growth Fund
4. Sundaram Select Focus Fund
All these funds have had a good track record both in bull and bear markets. Split your sip investment into different dates.
Review your investments every 6 months or so.
Best of luck,
Srikanth Shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Buying Opportunities Galore!!!!

The current fall is an excellent opportunity for long-term investors to build up a portfolio of good, stable stocks/funds.
Cast your mind back to the market crash of 1992 or the dotcom bust of 2000. At that time, these seemed to be major crises for stock markets. But if we look at the historical chart of the Sensex versus time today, they appear to be minor blips in an otherwise upward trending graph.
It is a natural human tendency to attach disproportionate importance to current events which have had a major impact on them and ignore all other factors which they would otherwise take into account as rational investors.
The world is not coming to an end, but the way the stocks are getting hammered 70% down from the top, it gives you a feeling as if the world is going to end
But contrary to investor perception, this is the best time to (buy more and) average out,And SIPs are an ideal vehicle to do that. SIPs should be continued to benefit from the lower prices prevailing now. And, I am sure, it is a great time to buy. Somebody putting his money at this point of time, is sure to get amply rewarded over the next 24-30 months. During market lows, human psychology plays a strong role. Fear takes over greed and people undertake panic selling. SIPs help to keep emotions away from your investment decisions and are a great vehicle to build long-term wealth. So keep your cool and take a long term view.
Equities are long-term investments. A short term blip creates fluctuations in prices but sooner or later, fundamentals will kick in.With India expected to grow at an average of 7% over a 5-year period, Crude down by 43%, nobody is taking note of these bright spots, BUY before others do, otherwise you will regret for a lifetime.
THIS IS A ONCE IN A LIFETIME OPPORTUNITY. BUY AND SIT TIGHT FOR 3-5 YEARS, YOU WILL BE AMPLY REWARDED.
Best of luck,
Srikanth shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.

Shall I redeem DSP even at Loss?

A senior Citizen Mr.Sen wrote:
i understand that because of amalgamation of dsp ml with a singapore company called hardrock, investors have been asked to redeem if they wish at current nav

i have an investment of rs 15000 in dsp top 100, 30,000 in tiger and 20,000 in opportunity eq. these are doing so badly even my principal has been heavily eroded.

i shall be very grateful if please advise.should i redeem even at a loss of 23,000 rs.or should i let it be for a few months. here let me mention i am a senior citizen

thanks a lot
sen


SRIKANTH SHANKAR MATRUBAI replied

Dear Sen,
Being a Senior Citizen, you should have to invest in Good Large Cap Funds and not Sector/Theme Funds and not even Opportunity Funds, as these funds take lot of time in giving you returns.
But, first of all, let me assure you that DSP ML is now DSP Black Rock, as Meriyll Lynch People had already their Asset Managemnt Company Worldwide long back. DSP had not yet changed the name of the company, which they have now done. Also, in India, all Mutual Funds are run by Trust where even a change in Company which forms the Trust to run the Mutual funds has NO say in the Day to Day Affairs of the AMC.
Coming to your investment, your investments seem to have been done in the Peak of the bull market and hence, seeing such a HUGE erosion. The Best option for you is to 'JUST STAY INVESTED' and hold on for now.
The funds are good except for DSP Tiger which is a Infrastructure Fund and does not look promising even on a three year horizon. You can switch the same to DSPML Equity fund and stay invested for some time till the markets stabilise and then take a call accordingly.
Best of luck,
Srikanth Shankar Matrubai.

Visit http://goodfundsadvisor.blogspot.com for More Detailed Mutual Fund Advise.