Friday, May 18, 2007

MY QUESTION (2)


I wish to invest in Mutual Funds. Could you suggest the best one and the plus and minus points in MF investing.

More about the question: -

I wish to invest my savings in a Mutual Fund of repute and not in the ones floated by the neorich. Please help me with your expertise
.

ANSWERS

1. Start by reading about Mutual Fund Investment basics. Once you read through 4-5 chapters (usually, not more than 1-2 pages max), you will feel better and will be able to understand more and move on to the next step, which is

What risk tolerance you have and which time horizon/how long you are willing to bet your money for

Remember one thing: you are entrusting your money to someone that you think/other folks think/perceive is going to do a good job of investing your money.

You can easily do what any other mutual fund does by investing your money yourself.

Not only you acquire an excellent and worthy experience, you will be forced to learn and understand more.

Don't believe at once what other people tell you about mutual fund investing. It is an industry gimmick designed for people such as ourselves to drain more money from and hopefully, make money.

The funny thing is the primary motto all of the funds will you:
a/ your money is NOT guaranteed (technically meaning 100% risk)
b/past performance of a mutual fund is not a guarantee of future results (technically saying that really, if we did well, that does not mean a hill of beans that we will do so again)

Just think about all of this... and always keep those things in mind.

2. Be involved with your money. The primary motto of mutual funds is also "your involvement with your invested money". The idea is that you are supposed to "give your funds away and let the "guru" manage it". Well, that's kind of stupid - don't you think? You work hard for your money - so hard that you are willing to entrust most of it to somebody and cross your fingers? Hope that gives you some serious thoughts..

3. Find the funds you're comfortable with that pay the highest 5 year return. Thats a good starting point. Check the fees, call a broker or email the fund manager and ask them to explain how the fees work b/c it can get confusing, mainly they charge a fee either when you buy or when you sell, but they can also 'adjust' the stock price (by decreasing the rate of increase) and 'skim' off the top.


4. This depends on how much you know about investing, how involved you will be and how risky are you willing to be.

If you just want to put your money is a fund that won't make the most money and won't lose the most money, I would recommend some of the huge fund families such as American Funds or Fidelity.

If you want to be more informed and have specific ways you want your money invested, I would recommend working with a Financial Advisor.



5. To find the best one go to the site moneycontrol.com find out the rank of MF's rank 1 means it is the best.
2. Track that MF and find the fund manager.
3. Find the history of the fund manager and the funds he has managed in the past
4. Find the growth of those funds
all these can be done with the help of moneycontrol.com

MF's generally invest ur money in different companies and get the return which then is passed on to u. The return depends upon of those companies and the fluctuations in the financial market and affects ur return accordingly.

My suggestion is invest monthly basis (SIP ) i.e systematic investment plan in 5 or 6 different good MF through ur bank like icici and uti for which u need to open an DEMAT account


6. For suggesting any meaningful answer to your question, certain other details are necessary such as your amount of investment, time horizon, your current income from pension, investments etc, your family financial obligations.......etc.

However, assess yourself and based on your amount, time factor, risk appetite, financial obligations, return periodicity etc. you may have options, among others and divide your total investments in more than two options for possibility of better combined returns:

1. Senior Citizen Savings Scheme (SCSS) offers 9% interest payable quarterly - offered by Post Offices and many leading banks like SBI, ICICI.

2. Investment in select blue chip companies' shares. In view of the long-term economy boom, they are good options for high returns with minimal risk. I personally feel this as a better option than investing in Mutual Funds.

3. Bank FDs. Some banks are offering 10.5% to 11% to senior citizens for 3+ years deposits.

4. Kisan Vikas Patra by Post Offices.

5. Real estate if you have enough funds.

6. Something in pure 24 carat Gold, no ornaments


4. Safe,, as in principal being guaranteed,, means get a CD,, you'll earn over 5% with no risk.


5. A CD sounds like a good idea, since it seems to be a bit too late to start a long-term investment.

6. Think the safe and the best for u at the moment is F.D, But I suggest u to go for for mutual fund on mid cap with part of your money which can give u nearly 20% intrest


7. First, I'd like to say that one could HARDLY find a good answer among the crowd, because most people are lost as to how to invest and/or protect their assets.

You don't mention your age, the size of your assets or your risk tolerance, but I will assume that: 1) you are not too old 2) you have enough for a couple of small property down payments, at least, and 3) you are asking this question because you don't want to incur in high risks. That said, I could go and tell you my opinion.

Savings accounts, CD's and bonds aren't much useful, because annual yields don't even match inflation rates.

After trading stocks, options and other financial instruments I am convinced that they are not a good option for senior people in need of safe, easy and tax-convenient decisions for their retirement.

Mutual funds claim big gains, but that is true only when markets are easy and irrationally bullish. Give them a bit of red markets and they easily go from +20% to -60%. Also, the higher the performance, the higher the risks they take, and you are asking for a safe investment. You can lose money by yourself, so why pay someone else to lose money for you?

The safest, simplest and most satisfactory investment I would think of, which is also inflation-resistant and sometimes includes tax advantages, is ACQUIRING RENTAL PROPERTY at the cheapest price possible.

This kind of investment is COMPLETELY DIFFERENT from speculative buying/selling, which involves buying property at any price with the HOPE of selling it later at a gain. True investments must not rely on hope, but in a careful plan to obtain consistent gains.

Investing safely in rental property involves knowing well your local market, finding desirable, low-priced properties and carefully calculating rental net operating income (NOI). And carefully means reaaaally carefully, including all expenses, repairs, taxes, closing costs, administration costs, loan interests, etc. Good books are available everywhere, but I used Summey and Dawson's.

Finding properties with optimal NOI and start making money is only matter of discipline, a few weekends and a commitment not to make impulsive decisions.

Source(s):

About the risks of stocks:
http://www.shortpicks.com
About investing in rental property:
Summey and Dawson's "The Weekend Millionaire's Secrets to Investing in Real Estate: How to Become Wealthy in Your Spare Time"


8. The best way to invest today is mutual funds.u can very well invest in LIC policies for senior citizens, which provides u with cash on hands for every months that will help u independent on children’s it really works on my granny who has done so.


9. I would try Franklin Templeton. You may want to see if the is a investor in where you live. Sometimes Credit Union is better then banks but like everything else you need to do your homework.



10. Invest in your family....
Fill them in about the life u have lived...the mistakes u made....and all of the lessons u have learned. Teach them to save their money....spend wisely....yet give generously of their time/energy to those less fortunate. Tell them that vanity is for fools...and having faith in God is pretty much all you need.


11. Bonds-That’s the catchword.

As you are of a certain age, safe investment with moderate returns is better than unsafe investment with high returns.

I suggest find some good bonds to investment-talk to friends, contact an investment firm, talk to some financial adviser....

Also make sure your insurance-health, property etc. are upto date and make sure they have greater cover.


12. If you make an inquiry you will find many mutual fund companies are now a days offering guaranteed money backs with handsome interest rates in mutual funds. These rates are more than what bank FD offers yet its guaranteed.
Also in accordance you can plan your time period of investments from around 3-6 or even 10 years.


13. Hi there. I think it’s great that you’re looking to invest your savings. I was curious if you’ve put any thought to what might happen to your savings if you eventually need to move into a nursing home. Most people assume if they need to move into a nursing facility for any length of time, Medicare will cover it, but this is not true. And this is how people lose all their savings. In order to qualify for Medicare, you need to have a very low income and close to no assets or resources. If you have a savings or assets, you’ll have to use them all to pay for your care before you can qualify for Medicaid. What I’m getting at is this: if you’re an elderly individual, you need to be thinking in a broader sense. At this point, it’s not just about getting a return on your investment. It’s also about protecting your money and assets so you don’t lose them all at some point down the road.

Medicaid looks back over the five years prior to applying for the assistance to make sure you didn’t move around your assets to appear low-income. If you do this before the five year mark, however, you are in the clear. You’ll be able to qualify for Medicaid and hold onto the bulk of your money and resources. The best way to do this is to put your money and home into a Medicaid Trust. This is an irrevocable trust that protects your assets from creditors, transfers to your beneficiaries when you pass and avoids probate (exhausting legal proceedings) when it transfers.
14. I recommend consulting an elder law attorney or a financial planner. Ideally, you want to not only see your money grow, but protect it from being exhausted by unforeseeable events
.

No comments: