Saturday, August 15, 2009

INVESTMENT PORTFOLIO ADVISE

Mr.S. Rao wrote :


"Dear sir



I came across your website accidentally and found it very helpful and interesting. You are doing great job!



My investment goal 5 year, 15 year and 20 year horizon for child's education, marriage and retirement annuity respectively. I am 44 and able to save & pay upto 50000 per annum for the next 20 years.



My bank suggested Unit linked childs plan (with guaranteed maturity benefit) and Pension plans or both of which are high in policy charges. Is it wise to stay away from ULIP plans and invest in SIP MF's, ELSS and ETF'S. Can you please advise the best tax free investment portfolio. How best can I use 10 lakhs which is presently in FD.



Other investments I posess:

Birla Sunlife Income plus Rs 10000

IDFC Income plus:10000

SBI arbitrage opportunities fund:49000



FYI:I recently purchased a site fully paid out. I took Jeevan Astha for 2 lakhs. I have LIC endowment policy for 75000 SA and PPF account.



Regards

Rao



SRIKANTH SHANKAR MATRUBAI
Dear Sridhar Rao,
At the outset, I thank you for your kind words.
For your age, you have done well by already having a site and Good Amount of Savings. Sadly, your investment seems to be too conservative to me. Maybe, in hindsight, this was good as these conservative has protected your capital in the Last year's Crash.

Jeevan Aastha was an avoidable investment. You can find the details about the same in my blog whose link is
http://hubpages.com/hub/JEEVAN-AASTHA-OF-LIC---A-FAILURE. There is very little you can do now, after you have invested.
Continue your LIC Endowment Policy and your PPF Account.
Continue your present investments in
Birla Sunlife Income plus Rs 10000
IDFC Income plus:10000
SBI arbitrage opportunities fund:49000
For now, it is okay to stay invested in the above schemes.
For your investment goal of Children's education, marriage and retirement, you better consider the following.
Out of your existing Mutual Fund Investment (listed above), you can consider these for your child's education. After 1 year or so, when rates stop declining and in case, start going up (not impossible), switch your Debt Funds to Balanced Funds, as your investment horizon is 5 years. Alternatively, take out the money from SBI Arbitrage Fund and invest in the Corporate FD of Tata Motors (3years FD will yield you 12.83%). Click on link http://hubpages.com/hub/SHALL-I-INVEST-IN-TATA-MOTORS-FD


For Marriage & Retirement(15 & 20 years horizon), go for Diversified Equity Funds like
Birla Sunlife Equity Fund
DSPBR Top 100 Fund
DWS Tax Saving Fund
Fidelity Equity Fund
HDFC Top 200 Fund
Sundaram Select Focus Fund
Tata Pure Equity Fund

As and when you near your target/horizon, switch from the above funds and invest in either Debt Funds or Arbitrage Funds gradually., to protect your capital from volatility and lock in the gains you would have made.

For a 15/20 year horizon, ULIPs can be considered. I always say ULIPs are expensive products with high initial charges. I am not in favour of any child plan . If one has enough term cover that will do. Child plans are long term gambles like ULIPs. How well an insurance company manages your investment part is a gamble. These are all ways to get more money from you. At maturity you will realise that the returns are not great. Better to keep INSURANCE & INVESMENT separate.
Compared to Other Child Plans, HDFC in addition to Death Benefit option also offers Critical Illness Benefit.
I however felt ICICI Smart Kid RICH fund is slightly better. You can compare it with HDFC Young Star Plus also, though ICICI Smart Kid scores over it in many aspects.
Invest your 10 lakhs FD in some Debt Fund and go for a Systematic Transfer Plan where in you will gain from both Interest Earnings and as well as Automatic Market Timing through SIPs.
For all your other doubts, refer to my other posts in my blog.
Best of luck,
Srikanth Shankar Matrubai







Also visit

http://equityadvise.blogspot.com

2 comments:

  1. Dear Sir,
    I HAVE FOLOOWING INVESTMENTS AND I WOULD LIKE TO KNOW IF THEY R ENOUGH FOR MY RETITEMENT/LIFE INSURANCE/HEALTH INSURANCE. ALSO I WOULD LIKE TO KNOW IF THERE R ANY ADDITRIONS TO B MADE OR ANY CHANGES TO B MADE TO MY PORTFOLIO.
    DSPBR TOP100- 60,000/ 2009
    HDFCTOP 200-50,000/ 2009
    SBI CONTRA-60,000/ 2006
    ICICI PRU DYNAMIC-48,000/ 2006
    UTI INFR SERIES1-100000/ 2007
    BNP PARIBAS ENRGY-100000/ 2007

    ALSO I HAVE LIC JEEVAN PRAMUKH AND JEEVAN SHREE.SUM ASSURED FOR TOTAL 15,00,000.
    I hve 2 ulips also for which i am paying 3,00,000 p.a. viz. hdfc enowment plan and metlife's metsmart plus.
    kindly advice if i have travelled the right way so far.

    ReplyDelete
  2. Sorry, Anup Nair.
    Due to Ban on Entry Load, my only source of Income, I am forced to Charge Consultation Charges.
    So, if you are willing to pay my Consultation Charges, I am ready to advise on your Portfolio.

    ReplyDelete

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