Ask Mint | On Investments

Ask Mint | On Investments

I have decided to invest in mutual funds on a monthly basis and here is the portfolio I have chosen:

HDFC Top 200, DSPML Opportunities, Franklin India Flexi Cap, Sundaram Select Midcap, HDFC Taxsaver, and HDFC Long Term Advantage Fund. I plan to continue systematic investment plans (SIPs) for three more years and the duration that I am looking to remain invested is five years. Please suggest corrections to the funds selected, if any.

- Robin Dsouza

Your fund selection is pretty good. You must review your portfolio of funds periodically, perhaps yearly, to reshuffle the schemes. At this point of time, this seems to be a decent portfolio.

I am a long-term investor and want to buy Global Digital and Firstsource Solution. What is the current trend of these shares and the limits within which they can be purchased as per your technical study?

- Pajwani

Please mention the complete name of Global Digital. As far as Firstsource Solutions Ltd is concerned, the stock is currently in the buy mode if you are a long-term investor.

The stock has a potential to touch Rs86 in the long run.

In my opinion, you should not buy this stock in one lot, but should accumulate it at different rates.

Also, you should keep a target of Rs86 and a stop-loss of Rs29 with a time frame of one year.

I want to know the long-term prospects of i-flex Solutions. I have bought the share at Rs1,800 levels. I am a long-term investor.

- Ravi G.B.

I-flex Solutions Ltd is a very good stock, but it is in the process of being acquired by Oracle.

Despite strong financials and fundamentals, It would be better to switch this stock to some other liquid stock.

However, purely technically, the stock has a potential to touch Rs1,600 in three months.

What are the prospects of shares of telecom companies such as Airtel, Idea and Tata Teleservices? At what price band should I go for them? I would like to know whether they are useful for the long term or not.

- Pankaj Gupta

The telecom stocks mentioned by you are all hot properties if you have a long-term perspective, since the telecom sector is witnessing a lot of action.

It would be useful if you buy them in small lots and hold them for the long term.

They are likely to yield returns better than the aggregate market.

You may buy Bharti Airtel Ltd around Rs840, Reliance Communications Ltd around Rs560, Idea Cellular Ltd around Rs101 and Tata Teleservices Ltd around Rs34.

I hold shares of A.V.I. Exports (India) Ltd, Rajasthan Breweries Ltd, Consolidated Fibre and ChemicalsLtd and Disposable Medi-AidsLtd in physical form that I purchased long back. I have not been able to find any information about the stocks or the companies from any source.

- P. C. Papnai

A.V.I. Exports Ltd was delisted from the Bombay Stock Exchange on 3 July 2002 due to winding up of the company, Rajasthan Breweries Ltd was delisted on 20 April 2004 due to compulsory delisting. Consolidated Fibre and Chemicals Ltd was last traded on 24 April 2007 and since then has been suspended from trading by the Bombay Stock Exchange.

Regarding Disposable Medi-Aids Ltd, there is no information available with me.

I have just been blessed with a daughter and I want to invest an average of Rs50,000-75,000 per year to create a good corpus for her (1) higher studies requirement in 16-18 years, and (2) marriage after 25 years. The investible amount can further increase in next three-four years considering the expected growth in my future income. Please suggest options which can give me very good returns with above-average risk.

- Khushal Mahori

The amount you wish to set aside could turn out to be a huge sum, if you invest it properly.

I think you should plan it in such a way that it grows steadily with adequate safety and consistency.

So, you should invest 60% of your investible funds in mutual funds, 20% in initial public offerings (IPOs) and remaining 20% in post office savings, fixed deposits and other securities that yield high returns.

In mutual funds, you may take systematic investment plans SBI Magnum Tax gain (40%), Sundaram BNP Paribas Select Midcap Fund (25%), DSPML Tiger – Reg (25%), and DWS Investment Opportunities fund (10%).

I think for the first year these investments could yield you good returns.

You must review it every year for necessary changes.

I hold 228 shares of Marg Ltd at Rs420, 330 shares of GMR Infrastructure at Rs170 and 100 shares of Biocon at Rs403. Can you comment on my holding for a four-five years?

- Jayachander

Marg Ltd is currently quoting around Rs285 and I think you have better opportunities for four-five years.

You may sell a part of your holding in favour of some PSU bank stocks like Bank of Baroda Ltd, Allahabad Bank Ltd, etc.

As far as GMR Infrastructure Ltd is concerned, I am quite bullish for the time frame mentioned by you. Biocon Ltd is also a good blue-chip stock with an excellent future.

These two stocks will prove to be excellent portfolio picks for four-five years. If you can, you should buy more of these stocks on declines.

I hold IFCI at Rs95 and DMC international at Rs45. Is there any better option to quick recovery?

- Chintan Raval

IFCI Ltd is a typical momentum stock and fundamentally speaking, there are better opportunities available.

However, the good news is that this stock is showing signs of recovery in the short term.

As per my technical analysis, the stock may witness an upward swing, which may take this stock in the range of Rs76-80. I think that will be the time to take a fresh call on this stock.

I request you to wait for a while and write back to us once the stock reaches this level, because as I mentioned this is a typical momentum stock.

DMC International is also a non-performer and it would be better if you exit this stock and pick up frontline stocks like Punj Lloyd or JP Associates for the long term.

However, you may expect levels of Rs24-27 for exiting this stock.

What should be done with a delisted company’s shares? Are they worth something? What is the procedure to replace partially damaged share certificates that may be torn, or partly eaten away?

- H.S. Gupta

The only difference between the shares of a listed and delisted company is that the later cannot be traded on the bourses and, therefore, their liquidity is almost nil.

They retain worth if the company is in a sound business.

As a shareholder, you have the right to look into the books of accounts and other related documents and are entitled to all dividends and other benefits.

However, if the company is delisted due to its insolvency, losses, frauds, winding up, company not in operation, etc., then the shares do not command any price.

So for delisted companies it is important to know the existence and operations of the company to know what they are worth.

Regarding damaged share certificates, you may apply to the demat service provider to see if the shares can be dematerialized.

Otherwise, you may have to contact the company for necessary action.

I am 25 years old and have invested in HDFC Growth G (Rs1,000 per month) and Kotak Opportunities Growth (Rs1,000) through systematic investment plant. I also have ICICI Prudential LifeTime Super insurance plan (Rs2,000) and Bharti Axa Life Insurance Wealth Confident plan in maximizer fund with Rs3,000 investment. Please let me know if my investments are on track or some changes are needed. All investments are for savings so that after seven-eight years I can get a large corpus.

- Arghay Das

As you have clearly mentioned your purpose of investment is savings, your investments in insurance policies do not seem to be a good idea.

Since the basic and primary purpose of insurance schemes is providing insurance, you should not invest in them and should opt for term plans for insurance.

If you want to maximize returns, then you should invest in mutual funds or other investments and not in insurance schemes.

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.