Post all your financial planning queries here Part-2

Re: Post all your financial planning queries here

See MFs are also like shares (just the diff. is its a group of shares from diff. companies)

When you are buying shares you will buy only one company shares or 2 or more separately...but with MFs you will buy a piece of shares all 3 companies clubbed into one share...

Yes even if you leave the amount in MF, it would show the increase or decrease i.e fluctuation in the balance...

If the MF is doing well, your balance would increase...depending on the no. of units you have in your account...If the MF is doing bad, your balance would decrease. (just like the share market)


People suggest putting in SIP in MFs because when you start investing small amounts every month...say if you are buying a MF whose units cost 10rs. for 1 unit...so for 100rs you can buy 10 units of that MF...if the price goes up...the next month your account would show 120 rs as balance because you already bought 10 units of the MF....but if you want to buy more it would cost you 120rs...as the price has increased...but if the price goes down your account would show the decrease in balance..however you will be able to buy more....

MFs are just similar to shares....will go up n down...only diff. is that here you would buy group of shares..instead of one share..that way even if one company doesnt do well and the other companies in hte group do well, still you would gain profit.....it wouldnt affec the MF performance


So if you invested 10,000 in a MF (you had some bought some 1000 units with that 10,000), after 2 yrs if the MF price goes up, your 1000 units price will also go up...so balance will be more than 10,000.....but if the MF is not doing well and the price fell...your balance will also be less as each unit price has decreased...so you have to keep track of it atleast quarterly or half yearly to undderstand when is the right time to get out and how much profit is good for you..etc

 

Dear Srividya:
Thanks for your elaborate reply. Now I understood the concept. Thanks a lot..

 

Hi Shaishav,

Waiting for your reply. Please advice me..

 

Hello Shaisav

Thank you for your advice.

I invested on smart pension plan in Max newyork- Rs 2000/month. It is about to complete. it is 4yrs investment. Once i complete 4 yrs, i will stop it.

As adviced by u, i will invest on HDFC top 200. Is it tax excemption? I can show this as tax excemption right?

I am confused between mutual fund and SIP. which i should adopt? Please suggest me.

Regards
Rekha S

 

Hi,

I read all ur posts and came to to the conclusion to close to my moneyplus policy.(thanks)

Now my quest is i have invested in sbi magnum(dividend) in2008 amount :10000; and itz current value is 5000.Lockin period is over.
How to minimize the loss.Can i switch to growth. will it help..

Thanks
Sri

 

Hi Shrividya, I've read this thread and the previous thread and noted that you've started investing in HDFC TOP200 and DSPBR equity. Can you please provide me the basic details like how I can open account by staying in US. I want to start with a small amount. It would be really helpful for me if you throw some light.

 

Hi shanthi/shaishav

First of all thanks so much for investing time and giving each one of us replies...I have few queries please help as its very critical for me at this point of life...I am working for an MNC and drawing almost 40kpm..I have taken PL 3 yrs back and everymonth EMI that i pay the bank is 7085 rps..and i have to continue this till JUNE 2012 to finish the loan...Now here is my concern..We have an individual Home and recently i spoke to a civil engineer about 1st floor construction..i have been planning this for a while and have been talking to people lately..I got best price from one guy by which 1st floor could be constructed for almost 9 Lacs...we have been checking apartments nearby too and in someplaces which are a little remote we are getting decent flats for like 17-18lacs.....Now comes the dilema
..I want to invest money in property...i dono if its good to go for 1st floor of our home or if i have to buy a flat...Whatever it is it will be given for Rent...I have around 250-300gms of Gold ...i am thinking if its better to put gold in bank and get someloan for that...I have around 3 Lacs ready cash available...Suggest me best possible ways i could think from here....

 

Hi shaishav, thank you for your valuable suggestions here. I got to know so much in just one day. Can you please tell me which one is best, SIP every month with a definitive amount in a MF or accumulating units when that fund's price goes down?

 

Lavii,

i am sure shaishav will also answer this query when he sees it. my views..

since you have 3 lakhs cash in hand, i will think of closing of the personal loan which must be having a high interest rate..

ok, on the housing part, my first choice would be to build the first floor of your own house rather than buying a flat. reason, it works out cheaper today, but yet will not depreciate that fast owing to the land value. it is not that you do not get appreciation in a flat, but it is just your undivided share.

i will think twice about pledging gold for raising money for the flat/house. again gold mortgage will have a interest. instead, you could go for a renovation loan and do your house. ensure you get the utilization of the maximum floor space index allowed. you can in fact get your first floor done well move into that and rent the ground floor, if your mil does not have any problem moving upstairs.

 

Hi Lavii,
My answers below...

Since there is only 10 months left for the loan's tenure to complete, you might have paid most of the interest part. The last few EMIs will be mostly the principal. Check with your bank how much principal is pending. There will also be some foreclosure charges based on the remaining principal.

If (total EMI amount) is less than (principal + foreclosure charges), then continue with the EMIs and invest the 3 laks in the property. Otherwise, foreclose the loan.

As the main reason is to give it for rent, check the rents of the flats in that area. If the flat fetches you good rent, then go for it. Else my suggestion would be to go for a first floor on the house. Flat prices start depreciating after 5 years, unless they are by a reputed builder. So it is not a great idea from investment POV too.

Gold loans have very high rate of interest, even more than personal loans. Even if a single month payment is delayed or failed, the penalty is heavy plus the interest is added to the principal. In effect, compound interest. So i would suggest to rethink this option.