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.

Free Insurance by Mutual Funds to continue

The Securities and Exchange Board of India, or Sebi, said insurance cover for mutual fund products will continue with insurance regulator, IRDA putting on hold its decision to discontinue group cover on mutual fund products, reports CNBC-TV18.

This was expected. IRDA is wise. They know that if the Mutual Funds are forced to abandon their Free Life Insurance Cover Combo, then the pressure will start building on the Insurance Companies to either Stop ULIPs completely or Bring down the commission Charges from the Sky High 35% (average) to the paltry 2.25% Commission being charged right now by Mutual Funds.
Regards,
Srikanth Shankar Matrubai.

Student's investment query

-->Chetan Ram had a investment dilemma and queried :
hello sir,

myself chetan ram and currently I have 25000/- rupees with me and i want to invest in SIP.

I am an engineering student and my age is 23. I also get a scholarship of 8000/- per month and will be continued up to may 2009 so the total amount will be upto 35000/- saving minusing the tuition fees and living expenses.

Currently i have got an RD of 1000Rs from post office.

Please sir suggest me which SIP i should go with and my plan is to invest 1000Rs per month or 1500/- and also suggest me the period of investment.

With Best Regards,
Chetan Ram

SRIKANTH SHANKAR MATRUBAI advised :
Dear Chetan,
Even though you have age on your side, so I would advise you to go for Diversified Equity Funds, simply because Sector/Theme Funds tend to be volatile and you being a student, you may require money at a very short notice.
I advise you to Stop your 1000 RD in Post Office immediately, as these tend to give very low returns even eroding your investment value when you consider Inflation too. Unless this amount is for an Emergency, you should stop this RD immediately and switch the investment into Mutual Funds.
I suggest you to consider investing 1500 in 4 Funds as follows:
500 * 1 in DWS Tax Saving Fund (500) (You can avail Added Bonus of Free Life Insurance of 5 times your Investment)
500 * 1 in Fidelity Equity Fund (500)
250 * 2 in Reliance Growth Fund (500)
250 * 2 in Sundaram Select Focus Fund (500)
These Funds are low on Risk and Above Average on Returns and Should Serve you all.
Best of luck,
Srikanth Shankar Matrubai.

Add more ELSS???

Mr.Rohan Agarwal wrote back with a new query :
Dear Shrikanth,

Thanks for replying to my last query.

To pay 0 tax on my income , i need to claim deductions of 45,000 under section 80c.

To do that i am investing 30,000 in ELSS and 15,000 in PPF.



I have invested 2,000 in each of the following ELSS Schemes.



DWS Tax Saving G

Fidelity Tax Advantage G

HDFC Taxsaver-G

Sundaram BNP Paribas Taxsaver

Principal Personal Tax Saver Fund G



I will further invest 4000 more in each of these , total of 30000.

Do you thing this is a good balance of ELSS Funds and currect number of funds for investing 30,000.



Thanks in Advance.



Rohan Agarwal.


SRIKANTH SHANKAR MATRUBAI replied :
Dear Rohan Agarwal,
You have the right mix of ELSS funds and you can continue to not only stay invested in these but also add more of the same.
You can however consider adding DSPML Tax Saver Fund which is more into Large Caps and could add stability to your portfolio.
Your exposure to Mid Cap and Small Cap is more through ELSS funds and not via Diversified Equity Funds, which means an automatic lock-in of 3 years, which should reward you by the end of lock-in term. And also, age being on your side, you need not at worry on this front. Your open-ended funds investment are in 3 Very Very Good Funds, which you can encash anytime without too much of a bruising.
Carry on without a worry and full of confidence.
Best of luck,
Srikanth Shankar matrubai.
Bangalore