I hold shares of GMR Infrastructure Ltd (136 shares purchased at Rs180 each), DLF Ltd (16 shares at Rs890 each), and Reliance Power Ltd (185 shares at Rs370 each) . Shall I keep or sell them?
GMR Infrastructure is a good stock with a long-term investment perspective. Since you have purchased this stock at a very attractive price, you should hold it for at least six months.
DLF is one of the best stocks in India’s real estate space and has a promising future. However, the stock has fallen substantially from your acquisition price. You should hold or average out this stock on further declines. Reliance Power is also a long-term bet. However, you may have better alternatives in the form of other fast moving stocks. You may exit the stock at around Rs415 partly and invest that money in other stocks and remain invested in the remaining shares of Reliance Power for at least two years.
I want to buy shares of Arvind Mills and Welspun Gujarat Stahl Rohren in small quantities. What about the prospects of these companies?
Both the companies mentioned by you are good. Arvind Mills Ltd has a short-term price target of Rs63, while Welspun Gujarat Stahl Rohren Ltd has a strong resistance at Rs410. If Welspun Gujarat crosses this resistance level, then there could be a small surge in this stock, which may take it to Rs440.
I want to start investing through the systematic investment plan (SIP) with a budget of around Rs15,000 per month across 10 mutual fund schemes. I’m looking at short-term gains for 50% of them and long-term gains for the rest. Could you suggest something?
You may take SIP’s in following funds: Reliance Diversified Fund–Growth, DSP Merrill Lynch TIGER– Reg, HDFC Top 200, Tata Infrastructure Fund, UTI Banking Sector Fund and Sundaram BNP Paribas Select Midcap Fund for short-term gains, SBI Magnum Contra Fund, SBI Magnum Multiplier Fund, Kotak Opportunities Fund, DWS Investment Opportunity Fund, etc. for long-term gains.
I hold 26 Reliance Power shares, which I bought at Rs424 each, and 12 DLF shares bought at Rs700 each. I want to know within a year’s time how much they can go up? I can hold them till March 2009. So, by that time, what you expect on these stocks.
Reliance Power has a target band of Rs490-525, while DLF has a target price band of Rs980-1025. However, my advice is that you keep track of these stocks on a regular basis as the targets may change depending on market conditions and changes in company fundamentals.
My take-home salary is Rs7,000 a month. Please advise where to invest so that in the long run, I should have some good savings in my account. The investment option should give good returns. I can put aside Rs500-700 per month for the investment.
Rahul, it is a great idea to start saving irrespective of your income. I would suggest you take the systematic investment plan for DSP Merrill Lynch TIGER-Reg mutual fund scheme. I hope it would yield you safe and decent returns.
I have invested in the auto sector last year, with the view that the sector would benefit as the interest rates will go down this year. But unfortunately the stocks have performed pretty badly till now. What is your suggestion? I am a long-term investor, and I can hold the shares for one more year, at least. Do you expect the auto sector performance to improve in the current fiscal year?
As a golden rule of investment, never put all your eggs in one basket. I do not think that the auto sector is going to deliver in next two quarters at least. You should plan part exit from your holdings on the next rally and should plan to diversify into other better stocks as well.
I wish to invest about two years’ living expenses (Rs12 lakh) in some investment vehicle, which at minimum outpaces inflation and at best gives me a solid return on investment. I also plan to draw down a variable amount of the investment, as frequent as each month or less depending on my financial situation. Could you suggest an investment?
These type investment plans need regular monitoring and periodic shuffling. So it is not feasible to spell out any master plan for your need. I would suggest you to consult professional investment planners to do this job for you.
These days, all leading private sector banks offer wealth management services, which might be of some help to you. Otherwise, ideally for this kind of a portfolio, you should invest 40% of your funds in equities, 30% in mutual funds and 20% in initial public offerings and other opportunities and the remaining 10% in post office and lucrative bank schemes. This will not only balance out your portfolio, but will also offer you decent returns.
I am 24 years old. I have invested about Rs2 lakh through SIPs and purchases where the net asset value (NAV) has fallen, in tax saving schemes (SBI, HDFC, DSP Merrill Lynch, Fidelity), equity diversified funds (SBI Contra, DSP Merrill Lynch TIGER) and sector funds (SBI Infrastructure, HDFC Midcap, ICICI Pru Services). I have also taken an insurance policy, with an annual premium payment of Rs15,000. As of now, the NAVs are lower than the average NAV at purchase levels. What is your advice?
First of all, you have a decent portfolio of schemes and you have taken the right step on investing, which is investing through SIPs. Now due to an unexpected fall in the market, the NAVs have come down. However, I do not think there is any reason to worry as this is just a market phenomenon and the markets will recover in due course of time. So you need not worry too much about the fall in NAVs.
About averaging out, since you have taken the SIP route, you need not do anything else as SIPs will take care of it. At this point of time, if you have an investible surplus, you can increase your portfolio.
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.