Where should I make investments?

[John4321]

ULIP,Equity stock, MFs are big crap in my case too. Avoid it. One point to take that invest in reliable & root company pioneer into respecitve sector. This should be min 10 yrs long investment and "pay & forget" kinda investment. 5%-10% investment at regular interval of nifty in market leader blueship company for min 10 yrs duration makes a sense. Likewise, I am taking 2 or 3 shares at every downward of market & restrict investment to not more than 7000/month in equity. List out Top 10 comps sectorwise, check depth-asset-p/e ratio, take expert advice & start investing for 2 to 5 shares for a long show.

IMO, the best suite is secured investment - in FDs, Co.FDs, Post, PPF & VPF - 70-80% of savings should be considered. Gold/Silver-10-20%.

Post:- Invest in MIS & reinvest interest income into recurring account. This is one of the popular combo of post scheme comign since old days. You hard to belive this combo gives you 11-12% yeild interest overall. I am doing most of it.

Company FDs/NCD:- Shriram, Jaiprakash, Gruh Finance. Its advisable to avoid long term investment here. Fix to max 1 year.

I would like to know about the MIS scheme in which you are currently making most of it. How does it work and how to start.. Also the company FD's that you have suggested I have these links. Are they the same? Also I would like to ask MAGNeT what do you think about these companies?
1. http://www.stfc.in/pdf/Deposit-Application-20form.pdf
2. http://www.jalindia.com/FD/FDScheme.pdf
3. http://www.gruh.com/benefits_of_GRUH_deposits.html

 

[edge111hussain]

So which are such schemes present now currently in which I can invest a lakh for 3 yrs and get the same as u got or I can get even more then that. Also are these tax free or do I have to pay tax on it. Are you talking about this http://www.sundaramfinance.in/products/deposits/shfdepositrates.aspx

Also I would suggest you to have a look at this and let me know whether it is good to invest or not for a year http://www.bharatbank.com/int_deposit.htm

The link provided by you is of a FD provided by sundaram finance. No, i aint talking about that. Though if it is a regular Fd, your money is safe anyways unless a worst come scenario occurs. You need to contact a trading desk to find out whats going on at the moment. I wont be able to help you out in this regard cause my RM calls me up and lets me know, we invest in larger ticket sizes and the applicable rate is higher than whats offered over the counter. Also i invest only if the instrument is highly secure.

The thing is, most depository instruments are registered or licensed by RBI, and the due diligence is done by them. If you read the points on the fd offer document, you will see what the rating is. Oh and yes, these instruments have a proper offer document which is mandatory unlike an FD. Banks earn very less on these instruments and they dont get any float either, hence they never recommend these products to their customers. On the other hand say a tata or tcs would not want to trade on retail desk, cause they would get small ticket sizes whilst on a trading desk you get larger ones. But still these offers are open to the general public too.

There is absolutely nothing wrong with MF's. Ill be a little blunt here, but those who say that mf's are crap, honestly know nothing about the equity markets and should honestly stay away anyways.
There are some ulips which r out right brilliant. The thing is though, the top load on these is very less and hence banks and agents dont earn much and never recommend these. But because of their tax advantage and flexibility in portfolio management, an ulip in the long run will make you more money than a mf.
Again, this goes without saying that you need to have atleast basic knowledge abt equity and debt markets.

Also another point, whilst theoretically 15-20% is what one shouyld expect in a financial yr from equity markets, but with the kind of opportunities that our stock markets have given us in the last 15 yrs, if one hasnt made more than 30-40% yoy, barring the recession yrs, clearly you lack knowledge and are not making the right investments.

Cheers

 

[Doremon]

I would like to know about the MIS scheme in which you are currently making most of it. How does it work and how to start.. Also the company FD's that you have suggested I have these links. Are they the same? Also I would like to ask MAGNeT what do you think about these companies?
1. http://www.stfc.in/pdf/Deposit-Application-20form.pdf
2. http://www.jalindia.com/FD/FDScheme.pdf
3. http://www.gruh.com/benefits_of_GRUH_deposits.html

Check http://www.indiapost.gov.in/MIS.aspx The interest income to be linked with Recurring a/c. Consult post agent/office. Company FD, not sure about the link given but contact local agent.

There is absolutely nothing wrong with MF's. Ill be a little blunt here, but those who say that mf's are crap, honestly know nothing about the equity markets and should honestly stay away anyways.

Guruji, re-read my words. Its crap for me.

But because of their tax advantage and flexibility in portfolio management, an ulip in the long run will make you more money than a mf.

Ohh, really!!. Can u pl give name few of them.

 

[thilak.kmb]

like, duhh! *** read the offer document carefully ***

stop blaming the government for everything, do your homework understand your requirements and risk appetite. research historical data, performance of the instrument of your investment.

You are absolutely right my friend. If the op has done that this thread would not have come up.

 

[John4321]

Check http://www.indiapost.gov.in/MIS.aspx The interest income to be linked with Recurring a/c. Consult post agent/office. Company FD, not sure about the link given but contact local agent.

How much maximum can be invested in this?

 

[pradeep200417]

How much maximum can be invested in this?

If you would have opened the link, then you would have known that for a single account max is 4.5 lakh and for joint account it is 9 lakhs.

 

[mathrisk]

I am a total n00b in these matter of investments. Though I had a demat account since last 1.5 years, I have never did any transaction.
Anyway, better late than never - I wanted to invest in MFs primarily at the moment (may indulge in equity sometime later). And preferably SIPs.
So, where shall I start?
I mean how to select the MFs. I want some decent return (just more than FD would suffice, not looking to be millionaire overnight ) - over 1+ year time.
I had read about those Equity/Debt/Hybrid funds quite a few times - but I still get lost in those jargons.

Could somebody please point to some MFs to start my research?
Like in ICICI-Direct I am seeing this MF

ICICI Prudential US Bluechip Equity/9.32(1 month return)/ 30.71(6 months) /39.42 (1 year).

Thats 40% is bloody huge. But is there any hidden fact behind that?

TIA.

 

[pr0ing]

That fund is invested in US companies so a large amount of the growth that you see is based on the Dollar exchange rate. Till April it had around 10% growth and after that it boosted to 40% in 3 months.

Check the growth rate chart from april here
http://www.moneycontrol.com/mutual-funds/nav/iciciprudentialusbluechipequityfundg/MPI1065

Then check the $ growth rate for the same period here
http://www.x-rates.com/graph/?from=USD&to=INR&amount=1.00

You can call that as a hidden fact but if the dollar tanks then so will the fund.

Moneycontrol (linked above) is a good site which tracks mutual funds and there are a lot of options to choose from which will help you narrow down options.
Another options is myiris.
http://www.myiris.com/mutual/index.php

Past results are a good indicator of a fund but nothing is guaranteed, do not keep all your eggs in one basket. Also keep in mind that investing in stocks/mutual funds is an ongoing activity, you need to keep tracking your investments and make necessary adjustments whenever necessary. It is not a one-time research and forget till redemption thing.

 

[sharktale1212]

Well looking at past results is like knowingly shooting yourself in the foot. The scenarios because of which those returns are being generated keep changing. Prime example the bluechip one. It might look, Holy Shit! 40% return. And the reason behind it is a shitty Inr performance vs dollar (there is another too but lets stick to INR for now). So I think its better to look for "now" or "forward" looking results, if that makes any sense.
Still that is something which really is not apparently simple for many people.

Best thing to do is take the simplest of portfolio allocations: 60-40 equity:bond break up. Equity can be in form of stocks, MFs and bonds in form of government schemes, MFs etc (and please no company FDs, something mentioned in the thread - I have read about it, they look like high risk junk bonds(american term) to me) Take your pick.

Now this portfolio is a complete MPT (market portfolio theory - check wiki - if you are engineer you will find the theory simplistic) break up so its not optimal. It will work and beat good number if not most MFs out there - Tried and tested

If enough people are up for it, I might even post how an optimized portfolio is made (complete with YT videos). Again if you are an engineer, you will boink your head as to why you dint think of this

Edit: If only I was writing a books, I could add more footnotes

 

[mathrisk]

Well looking at past results is like knowingly shooting yourself in the foot. ........... So I think its better to look for "now" or "forward" looking results, if that makes any sense.
Still that is something which really is not apparently simple for many people.

I read a better analogy for the case - looking for past results before investing is like driving the car seeing the ear view mirror.

Well, I get that its kinda dangerous. But then, where shall n00bs like me start?
Looking for now & forward indeed not very simple.

And yeah, I got the idea of 60:40. But for now I want to taste the MFs first before going for Equities. (SIP is my main goal )

 

[sharktale1212]

Ok tell me what really is an MF? (copied from ICICI, was feeling really lazy typing it out):

A mutual fund is an entity that pools the money of many investors -- its unit-holders -- to invest in different securities. Investments may be in shares, debt securities, money market securities or a combination of these. Those securities are professionally managed on behalf of the unit-holders, and each investor holds a pro-rata share of the portfolio i.e. entitled to any profits when the securities are sold, but subject to any losses in value as well.

So basically, an equity MF will loose you money in a declining market same as equities (its a very simplistic argument assuming most equity MFs track broader market).

And trust me, I know some of these "professionally managed" managers and they are worthless. They have no idea about portfolio optimization and/or adjustments. Some of them keep the same ratios even in a declining market just because they made money with it for last 2yrs. Completely ignoring what really led them to make money in these years. And many of them were MBA passed out from so-called premiere colleges.

Does that mean, there are no smart managers? As someone in this thread put it, there are. But for those cases, you need to look up the manager's name. Find his email and pick his brain to see if he knows his stuff (ask him the stupidest question and see what his reply his. A manager who knows his stuff will be able to explain things without going all complicated. At least that was my litmus test). Then invest with him. A long process, yes but really worth it.

 

[John4321]

Ok tell me what really is an MF? (copied from ICICI, was feeling really lazy typing it out):


So basically, an equity MF will loose you money in a declining market same as equities (its a very simplistic argument assuming most equity MFs track broader market).

And trust me, I know some of these "professionally managed" managers and they are worthless. They have no idea about portfolio optimization and/or adjustments. Some of them keep the same ratios even in a declining market just because they made money with it for last 2yrs. Completely ignoring what really led them to make money in these years. And many of them were MBA passed out from so-called premiere colleges.

Does that mean, there are no smart managers? As someone in this thread put it, there are. But for those cases, you need to look up the manager's name. Find his email and pick his brain to see if he knows his stuff (ask him the stupidest question and see what his reply his. A manager who knows his stuff will be able to explain things without going all complicated. At least that was my litmus test). Then invest with him. A long process, yes but really worth it.

So do you know any of such smart manager who exists or are all the managers dumb. The reason I am asking this as it would be good for making even a small of investment. I also keep checking this http://www.thefundoo.com/Fundoscope_app.aspx

 

[sharktale1212]

So do you know any of such smart manager who exists or are all the managers dumb. The reason I am asking this as it would be good for making even a small of investment. I also keep checking this http://www.thefundoo.com/Fundoscope_app.aspx

I did know two. One of them moved to Singapore to an international bank commodities desk, another went to US. Better money. As I said to @mathrisk looking at fund's performance can only get you a list which worked in the past. You need to get your hands dirty, talk to the managers and then decide.