Tuesday, February 17, 2009

Where to invest 1600 per month?

I am a student. thank you very much sir.
I saw a video clip on sundarambnpparibas.com, the fund manager explaining about mutual funds that by investing REGULARLY,DISCIPLINED and having PATIENCE without much worrying aboutmarket ups and downs for longterm period you are probably aCROREPATHI in near future.
Sir, now i am 22 years of age worried about my future needs and like to invest atleast 10 years from now.for this i can invest 1600/month.
I selected HDFC TOP 200 = 1000/month ,
SUNDARAM select focus = 300/month ,
RELIANCE growth/RSF fund = 300/mth.
On my previous query u suggested birla and fidelity equity funds,but both are not available in my area location(hyderabad) and the funds which i selected are at the same place(all 3 are main
branches which reduces entry load) so i choosed these funds.
Sir in a week i am going to start my SIP through these funds.based on your experience plz suggest on my funds bcoz i am very much worried about future needs(children,health...etc).
Sir,i have one more query for you,why experts suggests not to go for new funds? always go for well performed and well rated fund with good returns?even the new funds occupies the top position some or the other day?correct me sir if i am wrong.finally,plz have a clear look on my funds,is there any modification required?
thank you very much sir :)


Dear Ajay Kumar
At the outset I congratulate on starting investments at such a young age of 22. And your choice as Mutual Funds, is absolutely bang on target.
Your choice of funds,
HDFC Top 200 Fund
Reliance Growth Fund
Sundaram Select Focus Fund
are very very good and deserve to be invested.
But your amount of 1600 is too small for you to become a crorepati even if you invest for 10 years. Your 1600 per month even at 20% CAGR will leave you with a end value of 5,50,898 only after 10 years.
But your "Small" amount of 1600 per month will get you Rs.1 CRORE after 25 years!!!.
If you want Rs.1 crore at end of 10 years, at 20% return, you need to invest 29000 per month for 10 years.
However, if you invest for 20 years, you need to invest only 4000 per month!!!.
I prefer Fidelity Equity/Birla Sunlife Equity Fund over Reliance Growth Fund due to the bungling corpus of Reliance Growth Fund which may hamper swift movements by the Fund Manager.
You should not worry about distance. After all, you are going to the Fund House only once. And, later on, maybe, maximum of 1 time a year, if at all.
NFOs are best avoided because they take time for money to be deployed, and also since they do not have track record, the fund manager's capability will also not be known. It is always better to know the performance over all types of market movement, which a NFO can't.
Best some NFOs can be considered if they are promising and different in their investment approach.

Best of luck,
Srikanth Shankar Matrubai

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

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