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Chat 

Chat Transcript

Harshvardhan Roongta

CFP , Roongta Securities

Financial Planning and Asset Allocation

 

Questions Answered

Q

guest: Sir what about the lt emerging business fund in small and midcap sector?? Should i buy this or any other fund of that sector?kindly inform..

Harshvardhan Roongta: This is a good scheme and has performed well in the recent rally. However, the question should actually be whether at current levels should an investor park his money in a small cap fund. I would not recommend an investment in small cap funds. It would be appropriate to consider a multicap fund which empowers a fund manager to take specific exposure into companies across market capitalization (large, mid or small) depending valuation and growth prospects.
Q

guest: I want to invest 5 lakhs for long term say 10 yrs , which equity do you suggest? Biswajit , kolkata

Harshvardhan Roongta: I hope you are not looking to invest in mutual funds or direct equity merely looking at the past performance. Please be careful and do an introspection into this. New investors have yet not seen a bear phase due to this ongoing extended bull run. For any reason if there is a downturn in the market ..it can get very painful for investors especially those who enter at high levels. Nevertheless, you can consider investing in equities but make sure you donot invest the entire amount as lumpsum at one go. Invest via STP and the time period for money to come in equities should be 3 years. Create a diversified portfolio of large and mid cap schemes . Some of the schemes you can consider are : ICICI Focused bluechip fund, SBI Magnum MultiCap fund, HDFC Mid Cap opportunities fund and Birla Frontline Equity Fund.
Q

guest: Hi, I am a telecom engineer working in a Private Company. I have a daughter 1.5 years old. We want her to be a doctor. How much should i shave and where to invest so that when she will be at age of 18 i have 70 Lac for her medical studies. Regards Ravi Kumar

Harshvardhan Roongta: We assume a CAGR return of abut 14% from SIP investments. Accordingly, you will need to invest approx Rs. 10,000 per month to achieve your target. Invest Rs. 2,500/- in each of the schemes as follows: a) ICICI Focussed Bluechip Fund b) SBI Magnum Multi Cap Fund c) Birla Frontline Equity Fund d) Hdfc Mid Cap opp fund. Review the portfolio once every 2 years.
Q

guest: Can you pls. let me know what type of investment is required for children\`s education currently our kids age is 01 and 03 yrs..

Harshvardhan Roongta: You would need large sums of money typically from their age of 18 yrs onwards for UG studies and then after 21 yrs age for PG studies. Therefore, you have lot many years in hand. You should look at investing via SIP`s in 100% equity Funds so that you can generate inflation positive returns. The risks associated with market volatility will be mitigated since you are investing via SIP thus taking the advantage of rupee cost averaging over the next 15 yrs or so.
Q

guest: I have taken SBI Life Unit Plus II (growth fund ) on 2008 yearly premium of 40k with policy and permium term as 15 years As of today, i have paid around 3.6L and current fund value is 5.3L with NAV as 40. heard that market correction gonna happen soon, if market correction happens, then NAVs would go down drastically, which will eventually reduce the fund value My query is should i continue with ulip or take the money out ? if i dont want to get affected by market correction what should i do? will it b worth if i switch from growth fund to balanced fund?

Harshvardhan Roongta: I wish i knew for sure whether the market is going to fall or rise further in the near future. Very clearly, it is not possible for anyone to know that. Even when sensex was 30k it looked expensive and even today when it is 33k+ it looks expensive ( i dont think anyone is complaining though..we are all happy :-) ) Nevertheless, even i concur with your thoughts that market may correct. If you are making a decent profit then there is no harm in booking profits and moving to a balanced fund or debt fund..atleast this way you are not losing money...and incase markets go up further after you exit ..even then the only loss will be the "potential profit" you could have made ..therefore, given that you are apprehensive about further rise in market..it makes sense to book profits and exit. Take one step further.. surrender your ULIP and invest via Mutual Funds. You will get many more hybrid options via Mutual Funds. The surrender proceeds from ULIP will be taxfree anyways.
Q

guest: I\`m 28. I wish to invest 1,00,000 per month for a period of 1 year for a car upgrade, 3 yrs for marriage, and 20 yrs for retirement. What do you suggest?

Harshvardhan Roongta: Each goal will need different category of scheme. For 1 yr time horizon invest in a RD or a Short term debt fund. For 3 yrs invest in a hybrid scheme with max 25% equity exposure and for 20 yrs time horizon invest in 100% equity fund. The amount of investment in each category will depend upon the corpus you wish to create for each goal i.e car , marriage and retirement.
Q

guest: I m getting retired after 9 years, I m having 2 children age 22 n 16, how can I save so I retire as rich. My contact no 8879796215

Harshvardhan Roongta: I will need more information. Further, you should quantify the exact amount that wish to have when you retire (such as 1 cr, 2 crs, 5 crs etc) as "being rich" is a subjective term .. one person may consider himself rich with Rs. 50 Lakhs whereas another person having Rs. 5 crs may feel he needs more. Always try and put an exact number to your goals and plan accordingly.
Q

guest: I want to invest in mutual fund SIP for approx 10 year. I want to invest 10 thousand per month. I am planning for my daughter married, so I want secure and good return. Plz suggest

Harshvardhan Roongta: For a 10 years time horizon and considering it is for a specific goal, you can invest in equity funds. Over a period of 10 yrs when you invest via SIP`s it would be fair to consider the investment reasonably secure with a potential to give good returns. You may replicate the portfolio as i suggested to another investor in this chat session i.e: Invest Rs. 2,500/- in each of the schemes as follows: a) ICICI Focussed Bluechip Fund b) SBI Magnum Multi Cap Fund c) Birla Frontline Equity Fund d) Hdfc Mid Cap opp fund. Review the portfolio once every 2 years.
Q

guest: I have taken SBI Life Unit Plus II (growth fund ) on 2008 yearly premium of 40k with policy and permium term as 15 years As of today, i have paid around 3.6L and current fund value is 5.3L with NAV as 40. heard that market correction gonna happen soon, if market correction happens, then NAVs would go down drastically, which will eventually reduce the fund value My query is should i continue with ulip or take the money out ? if i dont want to get affected by market correction what should i do? will it b worth if i switch from growth fund to balanced fund?

Harshvardhan Roongta: Just adding some more thoughts to your query ... though your current FV is Rs. 5.3 Lakhs and which is above your invested amount of Rs. 3.6 Lakhs..if we were to calculate the annualized return you have got on this investment over last 10 years (since 2008).. it is just 6% p.a .. whereas , had you invested this money in a pure investment product such as Mutual funds / PPF etc ...you would have got a much higher return.
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