I plan to invest about Rs10 lakh in equity funds. I would not mind taking risks. Please suggest the type of mutual funds I should invest in.
You should put 65% of your money in equity (growth) funds and invest 35% in balanced schemes in the current situation. If markets follow a consistent trend, then you may alter this mix more in favour of equity (growth) schemes. Also, you should be careful in selecting the schemes, as they should have a good mix of industries that are likely to do well in the coming months and at the same time spread your risk evenly between different sectors.
I have 500 shares of Mirc Electronics Ltd and 50 shares of Kalpataru Power Transmission Ltd, both acquired over the past one year. Based on current market prices, I am at a 30% loss. What’s your recommendation—hold, sell or buy?
You should hold Kalpataru Power Transmission but sell Mirc Electronics and invest this money in some other stock.
I am new to mutual funds and want to invest in either Reliance Growth, SBI Magnum or HDFC Top 200 through systematic investment plans (SIPs) for five-six years. Please advise?
Reliance Growth–Growth and HDFC Top 200 are both very good schemes. However, you have not mentioned which scheme of SBI Magnum you are interested in. You may plan your investment in the above mentioned schemes, but should do a periodic review of your portfolio.
I own shares in Max-Worth Orchards International Ltd, Prime Solvent Extractions Ltd, Sudesh Seafoods Ltd, Software Mart India Ltd, Vintek RF Products Ltd and Chemox Chemical Industries Ltd. However, I have no idea what’s happening with these companies. Please help. Also, I own shares in some companies that have now been suspended from trading. Why do companies get suspended and what does this mean? Will such shares ever trade again?
Max-Worth Orchards was wound up on 3 July 2002 as per records available with the Bombay Stock Exchange (BSE). Prime Solvent Extractions is currently suspended and its address is: Jeevan Sahakar Building, 5, 3rd Floor, Homji Street, Fort, Mumbai— 400 001.
We have no information on Sudesh Seafoods and Software Mart India. Vintek RF Products was last traded on 14 September 1997. Chemox Chemicals was wound up on 21 October 2002 as per information available with BSE.
Regarding your second query, companies get suspended by the stock exchanges when they fail to meet anyof the listing conditions or on Securities and Exchange Board of India’s orders due to investigations, wrong-doing, breach of conditions or on punitive action.
In most cases, suspended companies are troubled companies, but if there is any genuine company under suspension, and qualifies the listing criteria, then its shares may start trading again.
Suggest five top equity shares, which would be safe and give decent return over a two-year period. We have in mind Reliance Industries Ltd, Larsen and Toubro Ltd, DLF Ltd and Ispat Industries Ltd. At what level are they, or any other stock you suggest, a good buy?
Your selection of stocks is good and depending on your risk profile, you may add stocks such as Tata Steel Ltd in place of Ispat Industries Ltd. Among other stocks, you may add Bharat Heavy Electricals Ltd, ICICI Bank Ltd, Oil and Natural Gas Corp. Ltd and NTPC Ltd to your list to make it more balanced and dynamic. In my opinion, this is a good time to buy, if you have a two-year time frame for investment. However, you should always buy in small lots so that you may buy more in case the stocks fall further.
Which mutual fund is the best in the current market scenario? Is it better to invest in debt fund or purely equity fund? Is SIP the preferred mode in the current market or bulk investment since the net asset values are down?
Also, for investment in stocks, which are the sectors showing a bright future (my time frame is two-three years)? What about Reliance Petroleum, Power Grid Corp., Great Offshore, Tata Steel, Tata Teleservices, Reliance Communications and Adlabs? Also, should we buy at a correction in the market and book profit during a bear-market rally? Or should we wait for the bull market to return for booking profit?
In the current market situation, I would prefer equity funds despite high yields on debt-related instruments. Out of the equity funds, my preference is for diversified funds, strictly in the current market situation. Among schemes DSP ML T.I.G.E.R–Reg is a good scheme and has good exposure in the energy sector (19.53%), financial services (10.13%), metals and metal products (8.54%) and technology (7.50%). There are also several other good schemes such as Reliance Diversified Power Sector, SBI Blue Chip Fund, HDFC Top 200, Sundaram BNP Paribas Select Focus, Reliance Regular Saving–Equity, Templeton India Growth, etc. and one should invest in more than one scheme to balance the portfolio.
I think SIP is a good method of investment. Depending on your investment surplus, you may do some lump sum investment and the rest through SIPs.
Regarding sectors to invest in, metals and technology stocks might do well in future. All the stocks mentioned by you are good and fall under the blue-chip category. Individually, Reliance Petroleum Ltd, Tata Steel Ltd and Reliance Communications Ltd are a good buy at current levels. You may also buy Tata Teleservices Maharashtra Ltd, Power Grid Corp. Ltd, Great Offshore Ltd and Adlabs Films Ltd in small lots with a provision for buying more at the lower prices.
About bull and bear market, my suggestion is that you should focus on the value of the stock rather than the market trend.
I would like to invest some Rs2.5 lakh in mutual funds with a long-term view. Can you suggest some funds?
In the current scenario, DSP ML T.I.G.E.R–Reg, HDFC Top 200 and Reliance Regular Savings–Equity can be considered for long-term investment.
I just got a demat account opened and plan to do online trading. Please tell me which are the shares to buy in the current market. Is this a right time to buy stocks? I want to invest in the short term. I would also like to know the mutual funds I can invest in for six to 12 months to get good returns.
Online trading is a very risky business and you should do it only under expert supervision. Since the scene changes very fast, for short-term investment, I can’t single out one particular stock, which is good in all times. For short-term investment ideas, you could read my weekly column, Ahead of the Ticker, on this page. About mutual fund investments, please read the answers to the questions above.
I have 50 shares of Universal Cans and Containers Ltd, 100 shares of Iggi Resorts International Ltd and 100 shares of Pal-Peugeot Ltd. What should I do with the physical share certificates I hold?
—Gangadhar N. Yeddy
The name of Universal Cans and Containers Ltd has been changed to Universal Prime Aluminum Ltd. You will need to get the new share certificates to trade them. Iggi Resorts International Ltd was de-listed on 20 April 2004, while Pal-Peugeot Ltd is suspended on the Bombay Stock Exchange. In both these cases, you can lodge your complaint with the Securities and Exchange Board of India.
I wish to set aside Rs10 lakh for the future needs of my newborn daughter. Please suggest where to invest this money.
It’s a good idea to plan so early for the future of your child. Since the taxation angle will also be involved in your investment as your child is a minor, in my opinion, you should first consult your tax consultant and then work out options for investment.
I am looking for an investment plan, such as through SIP, for my five-month-old son. I have a budget of about Rs50,000 and I am looking for an investment period of 20-25 years. I can also easily invest about Rs2,000 every month in a plan. Kindly suggest a profitable growth-oriented plan.
For an investment period of 20-25 years, there should not be just one plan as situations will keep changing in the future and you should adjust your investment plan accordingly. Moreover, since your son is a minor, his income or investment will be clubbed with that of you. If you have considered tax planning, then you may invest in good mutual fund schemes such as DSP ML T.I.G.E.R–Reg and Reliance Regular Savings–Equity plan. However, if you have not considered tax planning, you should talk to your tax consultant and may invest in tax-saving plans, which would help you in saving taxes too.
I want to invest about Rs6 lakh for about one year. Kindly suggest the best investment option for best returns and easy liquidity.
Please mention your risk profile and objective of investment. Depending on these two factors I can suggest you a good option.
Answers are based on a technical analysis of the markets and individual stocks. The views expressed on this page are not the newspaper’s opinion and are provided for information purposes by Vipul Verma. Readers are requested to do their own research before participating in the stock markets. Neither the paper nor the information provider will be responsible for any outcome based on information provided here.