Monday, March 16, 2009

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,




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

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