Nothing to beat Mutual Funds

History has shown that equities have been the best investment vehicle over any long-term period. However, ask any investor and most of them will say that they have lost money on the stock markets. Why this anomaly? The reason is that successful investing requires many things. The first is the discipline to follow the chosen investment strategy. Next comes the ability to choose the proper stocks by doing research or using the services of professionals in the field of investments. Finally, and most importantly, we need to understand that stock prices in the short run are more a function of people's emotions than the fundamentals of the underlying companies.

This is where most investors lose out. They fall prey to their own and sometimes others' mistakes due to the use of emotions in financial decision-making.
Investing in individual stocks can be fun because each company has a unique story. However, it is important for people to focus on making money. Investing isn't a game. Your financial future depends on where you put you hard earned rupees and it shouldn't be taken lightly.

With just Rs.5000, invested in a mutual fund, you can have a Diversified Portfolio of the entire Sensex or Nifty.
What's more, you do not need to daily monitor your stocks and keep track on them. The Professional Fund managers do it for you.
they do provide ample liquidity by offering to buy/sell units on a daily basis with minimum of charges.
Mutual funds are excellent for the new investors because you can invest small amounts of money and you can invest at regular intervals with no trading costs
And do not forget, if you are in the right fund, you make more money than Sensex/Nifty.

All these with minimum of efforts.
Go ahead. Invest in Mutual Funds.
Best of luck,
Srikanth

Where to Invest?

akshaych21 on ( 09-Aug-08 17:59 )
Iam akshay ,23yrs of age from chennai. i have invested about 40000 in reliance mutaul funds i.e, 5k in vision fund growth , 5k in equity fund growth, 30k in natural resources growth. what should i do with it now. i can wait for 2 more yrs on all. iam also willing to invest another 50k for about 5yrs. my goal is to double or more my investment in this time, so where can i put these funds SRIKANTH SHANKAR MATRUBAI'S reply ::: Dear Akshay, You have age on your side. So, time should not (in normal circumstances) be a problem for you, to stay invested. All your investments right now are in 1 single Fund House, Reliance, which is not a good sign. But all the three funds are good investments, may be a bit on the higher side in Reliance Natural Resources Fund. As you are willing to wait for another 2 years, there is no need to worry about these investments. Your willingness to invest another 50k (for about 5 years) is a good sign. And your return of double in 5 years should not be a problem. With these in mind, I recommend the following 5 funds for you, invest 10k in each of them Birla Sunlife Equity Fund DSPML Top 100 fund DWS Opportunities Fund Fidelity Equity Fund Sundaram Select Focus. In future, do try to invest through SIPs. Best of luck, Srikanth

31 yr old's investment dilemma

Hi,
First of all thank you very much for your advices on the
goodfundadvisor blog. Please give me some suggestions to improve my
port folio
Before going further, I request you not to post my email id on your
blog. You may post the content of the mail but not mail id.
I am 31, working in IT field in an MNC in bangalore.
My dependents are wife and kid. My parents have their own house and
they can manage with pension.
My investment goals are to have better life after retirement, children
education.
I am very new to Mutual funds and shares. I just started investing in
mutual funds.

Please comment on my following portfolio:

Earlier investments:
LIC endowment policy with premium Rs 9000 pa since 2001
LIC retirement policy with 10000 premium pa since 2004
LIC policy for my kid with 13000 Rs pa since 2006
Invested in Land for 20 lakhs
Bought gold ow worth 2 lakhs in 2007
Bought house with home loan 11.5 lakhs and principal 7.5 lakhs still
pending paying monthly EMI around 10000 Rs

Recent MF investments
SBI Tax Advantage Sr-1 (D) 31 march 2008 with Rs 40000
SBI Magnum Multiplier Plus (G) 22 july 2008 with Rs 20000

HDFC Growth Fund (G) 14th july SIP with Rs 2000 per month
Kotak Opportunities Fund (G) 14th july SIP with Rs 2000 per month
Reliance RSF - Equity 14th july SIP with Rs 2000 per month
SBI Magnum Contra Fund (G) 14th july SIP with Rs 2000 per month
Tata Infrastructure Fund (G) 14th july SIP with Rs 2000 per month

I want to invest some more money in MFs around another 10000 per
month. Please suggest some good funds, SIP / lumpsum.
Do I need to buy any shares also?
Do I need to buy some ULIP?
--
Regards,
Sridhar



SRIKANTH SHANKAR MATRUBAI's reply::::

Dear Sridhar,
At such an young age of 31, you have done a fair job of managing your finances. Congratulations.
As you may already be knowing, I am in favour of only Term Insurance. Insurance is NOT an investment. So, it does not feel good to see 3 LIC policies. But you have already taken them, so continuing the same is the best option.
Regarding your investments in Gold, buying ow is good only if you are actually consuming(using) it. If it is for investment purposes, then it is not a good decision, you are better off investing in Gold ETFs or Gold Mutual Funds.
You already have a house and have invested in a land. so I persume that you do not any BIG expenses facing you in the next decade or so. So, you can safely go for Long Term Investment without short term bother.
Both your recent MF investments could have avoided. I mean, it could have in much better schemes. Because SBI Tax Advantage is a close-ended, that 10 year close ended!!
Your existing SIPs are
HDFC Growth Fund (G) 14th july SIP with Rs 2000 per month
Kotak Opportunities Fund (G) 14th july SIP with Rs 2000 per month
Reliance RSF - Equity 14th july SIP with Rs 2000 per month
SBI Magnum Contra Fund (G) 14th july SIP with Rs 2000 per month
Tata Infrastructure Fund (G) 14th july SIP with Rs 2000 per month

All the above are very good investments especially since you are a long term investor. But keep reviewing your portfolio every 6 months or so, especially your invesment in Tata Infrastructure Fund and Reliance RSF - Equity Fund.
For your further 10000 sip, I would like you to go for 4 large Cap Funds and 1 Balanced Fund. My recommendation would be
Birla Sunlife Frontline Equity Fund (go for it through Century SIP and you will get additional Free life Insurance)
DSPML Top 100 Fund
Fidelity Equity Fund
HDFC Prudence Fund
Reliance Growth Fund (here also, you will get Free Life Insurance).

One more suggestion, stop the sip in Kotak Opportunities Fund immediately. Reinvest, i.e., Start fresh SIP in the same fund under Kotak Star Kid Facility for your kid, and you will get Additional Free Life Insurance!.

You can also stop Reliance RSF sip, and go for the Reliance Growth Fund. With 2000 savings, you could invest in either DSPML or AIG World Gold Fund.

You can think of investing in shares. But its a different game altogether. You need to spend more time tracking and monitoring your stocks, which is not the case with your investment in Mutual Funds.

Avoid ULIPs at all costs.
Best of luck,
Srikanth

Comment on my Portfolio

----- Original Message -----
From: Vishnu
To: sharesher@indiatimes.com
Cc: goodfundadvisor@yahoo.com
Sent: Thu, 7 Aug 2008 21:26:43 +0530 (IST)
Subject: investment advice needed

Dear Sir,

I am Vishnu, 29yrs old, below are my investment details, would you pl review and advise to enhance the same.

Insurance Details:

LIC - Jeevan Anand Since Jul 2004 with qtrly premium of Rs. 3172(Sum Assured: 3L)

LIC - New Jana Raksha Plan since Dec 2005 with qtrly premium of Rs. 2012 (Sum Assured: 2.1L)

LIC - Then Endownement Assurance Policy since Dec 2005 with qtrly premium of Rs. 3934 (Sum Assured: 5.5L)

LIC - Bima Gold since Dec 2005 with qtrly premium of Rs. 1650 (Sum Assured: 2L)

ICIC Pru Life (Life Time Supper) since Feb 2007 with monthly premium of Rs. 3333 (Sum Assured: 5L)

PORD - Since Jul 04 every month Rs. 500

Mutual Fund:

Franklin Templeton India Tax Shield (G) - Since Dec 05 SIP of Rs. 2000

SBI Mangnum Tax Gain (G) - Since Jun 08 SIP of Rs. 2000

and also started putting my hands in share markets since oct 07 and following are the share till now i had invested with a sum of 1 lac.

BHARAT HEAVY ELECT. LTD

HIND.UNILEVER LTD.

ITC LTD

M.R.P.L.

OPTO CIRCUITS (IND)

ORIENTAL BANK OF COMMERCE

POWER GRID CORP. OF IND. LTD

QUANTUM GOLD FUND -EXCHANGE

RELIANCE COMMUNICATION LTD

RELIANCE INFRASTRUCTURE LTD

RELIANCE NATURAL RESOURCES LTD

RELIANCE PETROLEUM LTD

RELIANCE POWER LTD.

SPICEJET LTD.

UNITECH LTD.

VALUE INDUSTRIES LIMITED

egarly waiting for your reply...

Regards,

Vishnu

SRIKANTH SHANKAR MATRUBAI's Reply ::

Dear Vishnu,
From your portfolio of investments, it is evident, a lot of changes is required to make it more balanced, so to say.
First of all, your investments in ULIPs is too high. Insurance is NOT an Investment. You seem to have missed the point. Have only Term Insurance, and rather go for Diversified Equity Funds.
Regarding your Insurance Portfolio, as soon as the mandatory 3 years of lock-in completed, come out of the ULIP investments. Rather go for Pure Term Insurance Plans.

Even your investments in Tax Funds leave a lot to be desired. SBI Magnum Tax Gain had a great run in the past, but because of its bloated corpus, it will be difficult for the fund to give Even Market Returns. And Franklin TaxShield has been an underperformer for some time and I see no reason how it will become an outperformer. You could look at s
Birla Sunlife Tax Relief 96 Fund
DWS Tax Saving Fund (Here you will get Free Life Insurance of 5 times of your investment)
DSPML Tax Saver Fund
Fidelity Tax Advantage Fund
HDFC Tax Saver Fund
Lotus India Tax Plan (its heavy Banking exposure will see it outperform, at least in medium term)
Principal Personal Tax Saver
Sundaram Tax Saver.

You could also look the following Equity Funds
Birla Sunlife Frontline Equity
DSPML World Gold Fund
Fidelity Equity fund
HDFC Prudence Fund
JM Contra Fund
Mirae Asset India Opportunity fund
Reliance Growth Fund
Sundaram Select Focus fund
DWS Opportunity fund


You should consider investing through SIPs for extracting maximum returns with minimum effort.

Regarding your equity portfolio, you seem to have a soft corner for Reliance Group. Never love your stock. Love only your money. Switch from Quantam Gold Fund to DSPML World Gold Fund
You could also consider completely exiting Reliance Natural Resorces ltd and Spice jet Ltd. I could not make out Value Industries.
You could consider investing in
GMR INFRASTRUCTURE LTD
FORTIS HEALTHCARE
WEBEL SL ENERGY

These scrips will compliment your existing portfolio. Overall, you have a balanced Stocks Portfolio. Quick changes is needed in ULIPs and Mutual Funds Portfolio.
Best of luck,
Srikanth