Wednesday, April 15, 2009

NRI's Investment Dilemma

Mohammad Idris Khilji wrote :

Dear Mr. Srikanth,

I am doing fine, and wish to the Almighty for the best in Health & Career for you.

As you know, I am an NRI and using my NRE account to invest in mutual funds.
As of now, I have lost almost 2.4 Lac out of 5.1 Lacs of my investment.

Even though, I am invested regularly in:

Reliance Growth - 2K SIP+Insure
HDFC Top 200 - Total 3K
Birla Frontline - Total 3K
ICICI Infra - Variable Amount
Kotak Opportunities - 1K
I started VIP of 2K in HDFC Growth & Reliance Banking also.

But since last couple of months, I have lowered down the amount I
invest on monthly basis, because the more amount I am investing, the
more I am loosing.
Also situation here in Kuwait is very tight. Cost cutting is going on and a lot of my colleagues lost jobs, and no one knows, when his turn might come.

Please check the attachment for my current status of investments in mutual funds as well as ULIPs of my family.

Please suggest best for me.

Thanks and regards,
Mohammad Idris Khilji

Dear Khilji,
Thanks for your wishes and I reciprocate the same.
Lowering your investment amount when the markets are falling is not the right thing to do. In fact, you are doing exactly the opposite of a Wise Investor. Of course, if the Recession is hurting you, and you are unable to spare money for investment, then it is acceptable.
Not paying your ULIPs will leave you at a disadvantage, especially since your ULIPs have not completed 3 years. Somehow, try to pay the Premium and after 3 years, STOP the Premium payments and instead invest in your Existing Mutual Funds. As you may already be knowing now, ULIPs are a strict no-no due to their prohibitive Annual Maintainence Charges.
Regarding your Funds, I advise you to Stop your SIP in Reliance Banking and ICICI Infra AT ONCE. I am never ever in favour of Sector/Theme Funds. Always go for Diversified Funds, as they tend to give you MORE returns than these Sector/Theme Funds over a Longer Period of Time.
All your other investments are into Good Funds. Continue to invest in the same and Best of luck.

Srikanth Shankar Matrubai

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