I made mistake in investing money. Advice needed.
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edge111hussain
Forerunner
20 yrs, lotsa options mate... mf and direct equity being the most vanilla of em all..
First of all its the budget that counts.. If we are talking about under 10, its strictly down to mf's, direct equity and debt (assuming ulips are completely out of the picture)
The thumb rule on mf's is to keep checking every 3 yrs. Go for diversified equity funds(non sectoral or nfo's) and preferably do a sip. Park money into liquid funds and make a stp.
In direct equity, on every fall of market pick up the fast running midcaps or fast moving large caps(l&t icici hdfc move faster than an hero honda etc). This will ensure very high returns in the short run.
This strategy always works but make sure you dont get too greedy. Enter and exit at the right time, which leads us to the question,,, how market savvy are you mate???
6pack look, india is still a maturing market. @ yrs back income funds(debt product) was outperforming equity by a good 45%. Thats unheard of but it did happen for a good 5 months or so. Now if equity markets slow down, you will have to switch to debt and vice versa.
I hope you are getting the gist here. If ur in equity, you will have to track it. If debt, its not tax free and you will have to choose from a huge array of debt products which needs good financial knowledge..
What a good ulip plan allows you to do is, stay in equity when stock markets are in bull phase and switch to debt when the bear is out. And the debts tax free cause the insurance cover makes it tax free.
HDFC has an awesome single pay ulip. The front load is like 2.5% and back load too is as less as an mf with all the portfolio management options. The plans not very openly spoken about because the agent commission in this plan is very very very less but this could be your 20 yrs ans... Also look out for an Endowment plan which is pro market(not a vanilla endowment but a ulip endowment). Go through every company's plans and see which suits you the best but do go for a plan which is at-least 5 yrs on since inception with a good fund management as well as performance record.
6pack do you have dependents or r we strictly looking at u alone?
First of all its the budget that counts.. If we are talking about under 10, its strictly down to mf's, direct equity and debt (assuming ulips are completely out of the picture)
The thumb rule on mf's is to keep checking every 3 yrs. Go for diversified equity funds(non sectoral or nfo's) and preferably do a sip. Park money into liquid funds and make a stp.
In direct equity, on every fall of market pick up the fast running midcaps or fast moving large caps(l&t icici hdfc move faster than an hero honda etc). This will ensure very high returns in the short run.
This strategy always works but make sure you dont get too greedy. Enter and exit at the right time, which leads us to the question,,, how market savvy are you mate???
6pack look, india is still a maturing market. @ yrs back income funds(debt product) was outperforming equity by a good 45%. Thats unheard of but it did happen for a good 5 months or so. Now if equity markets slow down, you will have to switch to debt and vice versa.
I hope you are getting the gist here. If ur in equity, you will have to track it. If debt, its not tax free and you will have to choose from a huge array of debt products which needs good financial knowledge..
What a good ulip plan allows you to do is, stay in equity when stock markets are in bull phase and switch to debt when the bear is out. And the debts tax free cause the insurance cover makes it tax free.
HDFC has an awesome single pay ulip. The front load is like 2.5% and back load too is as less as an mf with all the portfolio management options. The plans not very openly spoken about because the agent commission in this plan is very very very less but this could be your 20 yrs ans... Also look out for an Endowment plan which is pro market(not a vanilla endowment but a ulip endowment). Go through every company's plans and see which suits you the best but do go for a plan which is at-least 5 yrs on since inception with a good fund management as well as performance record.
6pack do you have dependents or r we strictly looking at u alone?
^ no dependents, just me alone. budget is strictly max 50k per year.
what type of product i'm looking at is this:
1. i should have ability to sell it completely anytime after say 3-4 years after buying it. no part selling of units, converting etc.
2. should have option of sip
3. strictly no lock in.
and i'm not market savvy. i hardly look at the markets. yeah i know its a shock, but that the truth. usually i only look at the mf's i'm going to invest in. i read about its performance in some sites, look at other similar funds and then buy what i want. maybe its coincidence that i mostly bought good funds. my experience with equity is a total downer. 95% of the stock i bought have gone into loss cause i didnt buy or sell them on time. I still haven't sold many of those. and looking at the 1 year performance of some stocks i noticed that i would have got about 25k profit if i sold them some 6-7 months back. now they are in 3-5k loss.
But that's what i want to change from now. After this experience, i don't want to be taken for a ride by any marketing executive looking to make a commission on me. I want to be market savvy too. any advice?
what type of product i'm looking at is this:
1. i should have ability to sell it completely anytime after say 3-4 years after buying it. no part selling of units, converting etc.
2. should have option of sip
3. strictly no lock in.
and i'm not market savvy. i hardly look at the markets. yeah i know its a shock, but that the truth. usually i only look at the mf's i'm going to invest in. i read about its performance in some sites, look at other similar funds and then buy what i want. maybe its coincidence that i mostly bought good funds. my experience with equity is a total downer. 95% of the stock i bought have gone into loss cause i didnt buy or sell them on time. I still haven't sold many of those. and looking at the 1 year performance of some stocks i noticed that i would have got about 25k profit if i sold them some 6-7 months back. now they are in 3-5k loss.
But that's what i want to change from now. After this experience, i don't want to be taken for a ride by any marketing executive looking to make a commission on me. I want to be market savvy too. any advice?
blr_p said:
SOrry but i never promoted ULIP.
On the contrary i would had mentioned that i myself have caught in one such trap.
Thankfully that ulip is giving me something about 12% annual compounded return but i dont plan to continue it futher that i mentioned.
Reason being in DTC it wont count as tax saver for which i used to invest.
And even breaking it after with 0% surrender (5 years) i might have to pay tax on deduction which i got but even on the compounded money.
I am a big fan of investing in stocks for long term as i see that as better investment than investing in realty.
Ill post comments on other posts latter as i read them and get time.
6pack you can surrender the policy within 15 or 30 days if you not happy with same once you pay the same.
One major update: If you give a cheque of 1+ lac to a tax saving fund please do not bounce it. Seems its reported to the IT dept by bank for possible tax evasion and fraud and even i could be investigated for tax evasion by IT dept :O
got lot of calls from bank regional head etc asking why i did it. i cant tell anything more here as its confidential but had to do a compromise so that the guy does not loose his job.
icici bank/direct is very serious about possible fraud!
got lot of calls from bank regional head etc asking why i did it. i cant tell anything more here as its confidential but had to do a compromise so that the guy does not loose his job.
icici bank/direct is very serious about possible fraud!
@6pack
Whats your aim?
You need to invest money and gain from it or you need insurance for your self.
Investment :
As you are not market savvy and first time investor what you can do is
Park your surplus funds in a liquid funds of a mutual fund and start a STP (systemic transfer plan - simillar to SIP but from a mutual fund scheme to another instead of your bank account) reasoning behind this is you earn more from Liquid fund vis a vis Savings account, and its more tax friendly too.
My suggestions
Birla Sunlife Liquid fund to Birla Sunlife Frontline Equity Fund
HDFC cash manager to HDFC top 200 fund
Reliance Liquid to Reliance growth
Reliance liquid to Reliance Regular Savings Fund Equity
Sundaram Liquid to Sundaram Select Midcap
First two are large caps bit conservative but more solid, last 3 are mid and small cap funds are more aggressive you gain a lot if rally comes around but risk is more.
My suggestions would be to put in first two to begin with and as and when in future you feel comfortable with tinkering a bit you can be more aggressive.
If you are looking for Tax saving options ELSS mutual funds are good options
HDFC Tax Saver
ICICI Tax Plan
Above two are my picks. As per new DTC ELSS and ULIP wont count as tax saving options so you can enjoy till then.
Now about insurance.
If you want to take x sum of insurance for you, for for a term plan from a big range of companies, choose one according to your suitability my picks are LIC / HDFC Standard Life / SBI / Bajaj Allianz.
After paying your premium the remaining money you can deploy in mutual funds as I said above and you will be smiling at the end of 3/4/5....10 years.
--- Updated Post - Automerged ---
do not worry about it, its just a face saving exercise from their side.
ULIP are not pure tax saving instruments, they are primarily insurance products.
Its just a scare given to you to make you a bait to save their own necks.
even if you are reported to IT, you need not worry as you are investing some where else which is better. Show them a middle finger up their arse.
Whats your aim?
You need to invest money and gain from it or you need insurance for your self.
Investment :
As you are not market savvy and first time investor what you can do is
Park your surplus funds in a liquid funds of a mutual fund and start a STP (systemic transfer plan - simillar to SIP but from a mutual fund scheme to another instead of your bank account) reasoning behind this is you earn more from Liquid fund vis a vis Savings account, and its more tax friendly too.
My suggestions
Birla Sunlife Liquid fund to Birla Sunlife Frontline Equity Fund
HDFC cash manager to HDFC top 200 fund
Reliance Liquid to Reliance growth
Reliance liquid to Reliance Regular Savings Fund Equity
Sundaram Liquid to Sundaram Select Midcap
First two are large caps bit conservative but more solid, last 3 are mid and small cap funds are more aggressive you gain a lot if rally comes around but risk is more.
My suggestions would be to put in first two to begin with and as and when in future you feel comfortable with tinkering a bit you can be more aggressive.
If you are looking for Tax saving options ELSS mutual funds are good options
HDFC Tax Saver
ICICI Tax Plan
Above two are my picks. As per new DTC ELSS and ULIP wont count as tax saving options so you can enjoy till then.
Now about insurance.
If you want to take x sum of insurance for you, for for a term plan from a big range of companies, choose one according to your suitability my picks are LIC / HDFC Standard Life / SBI / Bajaj Allianz.
After paying your premium the remaining money you can deploy in mutual funds as I said above and you will be smiling at the end of 3/4/5....10 years.
--- Updated Post - Automerged ---
6pack said:
do not worry about it, its just a face saving exercise from their side.
ULIP are not pure tax saving instruments, they are primarily insurance products.
Its just a scare given to you to make you a bait to save their own necks.
even if you are reported to IT, you need not worry as you are investing some where else which is better. Show them a middle finger up their arse.
blr_p
Oracle
My mistake, now that i recall it was ELSS that you were talking about, and we had this conversation wrt to 80C deductions a while back and that ELSS was your preferred choice over other methods.MAGNeT said:
Really, i'd imagine realty would net a 20% return annual, assuming you could rent it out and the appreciation in land price year on year is virtually untaxable. Low maintenance as well as risk for the most part in comparison to stocks. Land stays constant while ppl only increase. This would be the first choice but its got a high barrier to entry.MAGNeT said:
I'd imagine stocks would be a close second, and given we're a growing country its really worth getting into. I keep telling myself this over the years but i've yet to take a dip there.
edge111hussain
Forerunner
Mate it looks like mf's for you. Since you aint market savvy, id say sip or stp for you, else i would have asked you to time it a bit.
Since yo have a long horizon, do look at balance funds too for a 5-7 yr horizon. Have a combination of equity and balanced funds.
Dont go with sundaram for col.. Their fund management strategy for me has been like our indian matkas(laga toh laga types).
Stick to Reliance, hdfc, dsp and birla. Avoid icici too for now, they need to sort out a bit in terms of their fund management team.
Mate do remember, there is no perfect combination and no one is really an expert. Markets throw up surprises and economic situations pretty much dictate terms around here.
BTW, REAL Estate has made me more money in 3 yrs than my 7 yrs in hardcore equity(recession taken into consideration). Hence i always say a gold mine for 1 might turn into a bed of thorns for other. If you think equity is not your thing, simply walk away.. Look at gold or silver or any other avenues if need be.
Since yo have a long horizon, do look at balance funds too for a 5-7 yr horizon. Have a combination of equity and balanced funds.
Dont go with sundaram for col.. Their fund management strategy for me has been like our indian matkas(laga toh laga types).
Stick to Reliance, hdfc, dsp and birla. Avoid icici too for now, they need to sort out a bit in terms of their fund management team.
Mate do remember, there is no perfect combination and no one is really an expert. Markets throw up surprises and economic situations pretty much dictate terms around here.
BTW, REAL Estate has made me more money in 3 yrs than my 7 yrs in hardcore equity(recession taken into consideration). Hence i always say a gold mine for 1 might turn into a bed of thorns for other. If you think equity is not your thing, simply walk away.. Look at gold or silver or any other avenues if need be.
blr_p said:
Yes it was regarding ELSS for 80C..but i must say now i find PPF to be better instrument in 80C than ELSS specially if you have business and not salary.Reason has to do with cash payment for PPF rather than cheque by salary class.
Also investing in silver for short term i mentioned somewhere.At that time price was around 35k and see today its 50k .Anyways now i see a bubble in silver.
Agreed but if you already have a property and if you buy another according to tax law you have to consider it on rent and that rent becomes part of your taxable income.If you have the money to buy multiple properties or buy a property and give it on rent and also ready to handle tenant menance you should definitely go ahead.I find it a risky bet and also i find one tax law break by everyone when they have multiple property i.e of wealth tax.You need to pay tax of 1% on assets above 30 lakhs excluding one of your self occupying house including gold,and other assets like cars excluding stocks and etfs(last year this limit was on 15 lakhs and in dtc it will be 1 crore but more assets will be added).this is one reason we dont see politicians declare cars as their property while filing return as all of them own bmws and merc and paying wealth tax on it is compulsory which they dont want to show.FOr house its quite tough to get details or not shown mostly in property as they are on benami naes of your gardner,watchmens.
ANyways back to topic.I said stock because people know that if they would had invested in wipro shares in 1980 10k that would have worth 432 crores now.I know 10k was big amount in 1980.But even if my father would had invested 10rs in wipro at that time and have forgotten that would have worth 4.32 crores.Even people of amalner where wipro started people bought or got shares of wipro 1000 or 10000 and as they were illliterate they never bothered to sell it .Generation after generation came and now the people who are literate when they reevaluated it many of them own around 10 to 75 lakhs shares of wipro.Thats the power of stocks but one need to wait for generation to see the same.
If I remember correcty, you had mentioned this Wipro example earlier too. The problem with this example is, for 1 such Wipro there are more than 100 other companies which have failed and the investors don't even get back their initial investment. It is easy to give the very best examples from the past but almost impossible to find what stock is the best to buy at this moment at any given time.MAGNeT said:
My advice to you would be to not get blinded by those numbers and for others to learn from other sensible replies in this thread.
sorry if this sounds harsh.
pro na no offense or harsh stuff.
I agree no one should put money in stocks if they have less than 5-7 years horizon.
I took wipro e.g because i have its excel.If you do details research on top nifty stocks like Sbi,bhel,ril ,lupin,hdfc,etc.
you will get similar stories.
Even my late grandfather invested 40 buks in siemens in 1957 and he took all his money out in 2005 that was 2 lakh.Cagr of almost 25%
Point was that.
6 pack i dont see any tax evasion.Banks are required to keep track of huge transaction cancellation as it amounts to frauds,scams etc.Even if taxing officials come to your door if u havent done anything wrong whats their to be afraid.
I agree no one should put money in stocks if they have less than 5-7 years horizon.
I took wipro e.g because i have its excel.If you do details research on top nifty stocks like Sbi,bhel,ril ,lupin,hdfc,etc.
you will get similar stories.
Even my late grandfather invested 40 buks in siemens in 1957 and he took all his money out in 2005 that was 2 lakh.Cagr of almost 25%
Point was that.
6 pack i dont see any tax evasion.Banks are required to keep track of huge transaction cancellation as it amounts to frauds,scams etc.Even if taxing officials come to your door if u havent done anything wrong whats their to be afraid.
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