Thursday, July 9, 2009

FUND SELECTION FOR A GOVERNMENT EMPLOYEE

SALARY ONLY SOURCE OF INCOME....



Dr.Sundeep wrote :

"I am 40 years old goverment servant

As a middle class service man my source of income is only SALARY In last 3 years I have invested in equity diversified mutual funds and lost 50% of my money.As i am not a proffessional and no knowledge of market I was using this instrument ie diversified mutual fund as a long term investment Now I have lost around two laks of my money in MF WHAT should be my future plan I mean if i have to invest Rs 100 per month for long term how should I divide in different type of mutual funds ie equity diversified /DEBT etc for long term. By Rs 100 I mean what percentage of investment.
As far as my MF are concern I Have invested in
Reliance GrowthRs 40000,
ICICI infra structureGrowth Rs 40000,
Templeton India Equity income fund growth Rs35000,
Fidelity special situation Fund Rs 10000,
Reliance RSF EQUITY Rs 35000-GROWTH,
DSP BR TOP 200Rs 15000.
TATA infra struct growt Rs 10000,,
SBI MAG TAX GAIN,Rs 15000,
Reliance diversisified Power MUTUAL FUND GRowth Rs 40000,
JM BASIC FUNG GROWTH RS 15000,
Principal personal Tax saver Rs 5000,
Lotus India Tax plan groth Rs 5000.
These MF buyyed whem Sensex rages from 16000 to 20000.i have invested rs 3L plus mpney.I am ready to wait for 3-4 yrs."
thanks,
Dr.sundeep


SRIKANTH SHANKAR MATRUBAI replied :
Dr.Sundeep,
You may be aware that none of us are spared in this economic crisis and that includes me too.
Just investing your savings without actually finding out your risk capacity and risk tolerance levels is not a very good way of going about investing your hard earned money.
For a Conservative Investor like you, it is sad that you have invested in Sector/Theme Funds which are the ones which FALL the most in any Bearish Markets.
Firstly, I would like you to switch from the following funds :
1. Fidelity Special Situation Fund (10000) to Fidelity Equity Fund
2. Tata Infrastructure Fund to Tata Pure Equity Fund
3. Reliance Diversified Power Fund to Reliance Regular Savings Fund - Balanced option
4. JM Basic Fund to JM Large Cap Fund
5. ICICI Infrastructure Fund to ICICI Dynamic Fund. (this is inspite of ICICI Infra's better than peer performance).
You can continue to stay invested in the other funds as they all have shown consitently better performance and looks assuringly to continue to do in future.

By the way, Lotus India Tax plan is now Religare Tax Plan.

Being a Govt Officer, with SALARY as the only source of Income, you are not in a position to take risks. You better avoid investing in Theme Funds and instead concentrate on Diversified Funds. You also need to add some Balanced Funds to your portfolio to protect volatility.
You should ideally invest 25% in Diversified Equity Funds, 25% in Large Cap Funds, 25% in Balanced Fund and 25% in Debt and Arbitrage Funds.
Slow and steadily, start shifting your investment amount from Equities to Balanced Funds and all apprecaition further to Debt and Arbitrage Funds.
Best of luck,
Srikanth shankar Matrubai

Also visit

http://equityadvise.blogspot.com

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