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Chat Transcript

Amit Trivedi

Author & Founder , Karmayog Knowledge

Equity investments simplified


Questions Answered


vamshi_krs: Hi, please provide you opinion on Dabur .. Have bought @ 293. Hold or sell

Amit Trivedi: I would not be able to provide specific opinion on any stock, but I would like you to conduct a detailed analysis of the business, financial statements and valuation if you want to buy stocks by yourself.

guest: What are best tax saving mutual fund schemes?

Amit Trivedi: For the purpose of tax saving, you can look at a category of mutual funds known as ELSS. However, these funds may come in different varieties, so please go through the investment objective and the investment universe to see if these match with your own risk tolerance.

guest: I want to invest Rs. 5 lakhs and get a monthly income of Rs Five thousand monthly by SWP. Which three -four mutual fund schemes would you suggest. Retired person - age 60

Amit Trivedi: Your expectation is too high - withdrawal of Rs. 5,000 per month from an investment of Rs. 5 lacs means you must get at least 1% return every month. When the interest rates have already come down, this is too high an expectation. At the same time, please do not invest into an equity / balanced fund with an objective of getting regular monthly income

guest: I am 25 years old and planing to start investing via mutual fund. Looking at the historical data , it is clear tht small and mid cap has outperformed large cap . Should i opt for a mid cap fund or a large cap fund ? Risk taking ability - high | Do not want regular income ( prefer growth)

Amit Trivedi: Your observation is right. Over long periods, mid and small cap funds have the potential to outperform large cap funds. However, this does not indicate how long is the long term. Let us look at the data of last 10 years - from March 2007 to March 2017. For the first 6 1/2 years, there was very little difference between mid cap funds and large cap funds. However, August 2013 onwards the mid cap funds started moving up considerably fast, whereas large caps did not. Now, this means someone invested in 2007 could have been very upset with the fund performance for a very long period before getting the results. Considering your age, I assume you can afford to wait for long. However, in order to wait, you need to ensure you are not going to touch these investments for a really long time. If that is true, you may go ahead with mid cap / small cap funds

guest: Is it a good idea to invest in asset allocation funds? if yes, please suggest some good fund to invest money. I am 35 years old and can invest Rs 10000 per month.

Amit Trivedi: The choice is yours - asset allocation funds follow a strict discipline of rebalancing the portfolios periodically, which many of us fail to do with our other pressures of jobs and family. At the same time, they also take away the flexibility of choosing the components. Please understand this difference and then only take a decision.

guest: I am 25 and have just started working . I would like to invest in a mutual fund as my work hours do not permit me to continuously track the market and invest in it directly. I am planning to do an SIP of about 8000 a month . My risk taking ability is moderately high . This will be my first ever investment in to a mutual fund . Which type of fund do you suggest for me . I was thinking about small/mid cap as they seem to out perform their counterparts. tax saving is an option but the lock in period of 3 years is what is holding em down. Funds shortlisted : 1. Can Robeco Emerging Equities 2. DSP BR Micro fund 3. Axis long term equity (ELSS). Would really appreciate any advice

Amit Trivedi: (1) When you say, your risk appetite is moderately high, mid and small cap funds are not for you since these could be extremely risky. At present, the past performance is really good in this category, but that exactly is the reason that when the time is good they move up fast and when the time is bad, the move down could be really crazy. With your moderately high risk appetite (I assume you exactly know what you mean by this), I would suggest a large cap / balanced fund. (2) The tax-saving schemes - whether from mutual funds or otherwise would always have a lock-in period. There are no investments that qualify for tax saving but have no lock-in. So, if you want to save taxes through your investments, please be prepared for a lock-in.

vinitkarad: I m male 30 yrs. My SIP in ICICI top 100 fund-Growth is ending in March 2017 which was started 3 yrs back . Amount invested is 55000 and current valuation is 63800. I m getting 15.78% annualised return. Should I hold the investment or book the profit? The goal behind investment was to earn more that bank FD. Right now no need of this money and if profit is booked then where should I invest this money for further period of 2 yrs.?

Amit Trivedi: Please have a relook at the goal - you cannot have a goal of beating something. Your financial goals must be about funding some big event in your life - be it your responsibility or your dream. Consider your financial goals properly and then only you can take a decision regarding what to do with your investments

vinitkarad: I m male 30 yrs. My SIP in ICICI top 100 fund-Growth is ending in March 2017 which was started 3 yrs back . Amount invested is 55000 and current valuation is 63800. I m getting 15.78% XIRR return. Should I hold the investment or book the profit?

Amit Trivedi: What are you investing for? What are your financial goals? You should not take an investment decision without considering the goals.

guest: I am having SIPs in following schemes. Please suggest any other schemes for SIP as well as suggest from which i can exit or switch. 1) Birla Sun life Gennext 2) Franklin india smaller companies 3) SBI Bluechip 4) DSP Microcap 5) Franklin india opportunities 6) Tata Ethical 7) Sundaram select midcap

Amit Trivedi: Why are you investing? How did you select these schemes? What has changed since you first selected and invested in these schemes? Please don`t just add more schemes for sake of it
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