Skip to main content

A simple plan to put you on the road to financial freedom

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)


When you begin to earn money and want to invest, it is never too easy to find right advice regarding where to put your money so that your corpus grows and you are able to meet your life's major financial goals. Here are a few basic pointers for beginners and those with a moder ate-size corpus.

Pay Off Debt


Before you can begin your investment journey, get rid of any expensive debt you have accumulated. Personal loans and revolving debt on credit cards are pernicious as they carry high interest charges.


Create A Contingency Fund


Have at least six-eight months' monthly household expenditure saved in a contingency fund before you begin your investment journey. A small part of it could be saved in a savings account where it is easily accessible. The rest could be put in a liquid fund from where it can be withdrawn in a day.


Save Diligently


A person should ideally save 25-30 per cent of his gross salary every month. Adopt what is known as the "pay yourself-first" approach. Take out a portion of your earnings and invest it at the very beginning of the month.


Determine Your Asset Allocation


Asset allocation refers to how much of your investment portfolio should go into equities, debt and gold. Your asset allocation should be decided on the basis of your age: 100 less age is the portion of your portfolio that should be invested in equities. If you are investing for retirement, you could have a higher allocation to equities. If you are a very conservative investor you should have a lower allocation to equities. Finally, your asset allocation should also be determined by your current level of savings and earnings. Invest in mutual funds. They offer the advantage of diversification (a typical diversified equity fund invests in anywhere between 15-70 stocks across many sectors). The actively managed funds have a fund manager who is in turn supported by a research team. The equity portion of your portfolio should be filled up with diversified-equity funds (avoid sector/thematic funds or have them in a very small quantity). This portion should in turn be split between largecap funds and large- and midcap funds (which should together make up 70-75 per cent of the equity portion of your portion) and mid- and small-cap funds (25-30 per cent). When choosing a diversified equity fund, look at past returns--both rolling and calendar year returns. The fund should have beaten its category average over most time horizons (six-month, one year, three-year and five-year). Also look up calendar year returns to ensure that the fund has beaten its benchmark in at least four of the past five calendar years. Next, ensure that the fund's level of risk (beta, standard deviation) is lower than average and risk adjusted returns (Sharpe ratio, Treynor ratio) are above average. Finally, make sure that the fund manager who earned those returns (over the last three or five years) has not moved out (because if the fund manager has changed, the past track record holds no meaning). If you find it difficult to check out all these parameters, choose funds based on their star ratings (offered by rating agencies such as Morningstar, Crisil, ICRA, etc). If you don't want to be bothered with choosing active funds and monitoring their performance, invest in a passive fund, an index fund or an exchange-traded fund which offers the advantage of being low-cost products.


Invest In Debt


It is important to have debt/fixed-income products in your portfolio. They help diversify your portfolio and also lend greater stability to it (debt products don't fluctuate much; returns from fixed-income products remain constant). If you are a salaried employee, you would be contributing to employee provident fund (EPF). Another product that is highly recommended for the debt portion is Public Provident Fund (tax-free returns and Section 80C tax benefit available). You could also look at debt funds (an income fund or a dynamic bond fund with a good rating). Fixed deposits, monthly income plans (growth option) and fixed maturity plans of mutual funds could be used for shorter time horizons.


Invest In Gold


At least 8-12 per cent of your total portfolio should be invested in gold. Having gold in your portfolio will provide further diversification and lend stability. Gold acts as a good hedge against inflation. It also does well in times of economic adversity. Invest in gold bars or coins which can be easily sold off in case of a financial crisis or invest via a gold exchange traded fund (ETF), which has the advantage of low cost. Avoid complicated products that are being hard sold to you. In all probability, they are high-cost products that will enable the seller to buy a yacht but will harm your finances. And lastly, begin investing early.


Buy insurance


As soon as you begin to earn and have dependants buy life insurance cover. Avoid buying insurance-cum-investment products like unit-linked insurance plans. Instead, opt for a pure term cover. The sum assured should be 10 times your annual gross salary. If you buy a term policy at an early age, you will be able to get a large cover at a cheap rate. Buying an online policy will also enable you to get the policy at a lower price.


Insure Your Health


Even if you have been provided health insurance by your employers, buy an individual cover as well for yourself and your family members. This will ensure that you are not left without a cover in case you lose your job, or if you fall ill when you are between jobs. Later, you may supplement these individual covers with a family floater. As you age (after 40) buying critical illness policies also becomes important. Buying insurance at a later age becomes difficult. Many of the ailments that you acquire as you age will be classified as pre-existing diseases for which you will not be covered for the first four years of your policy.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax PlanInvest Online
  2. HDFC TaxSaverInvest Online
  3. DSP BlackRock Tax Saver FundInvest Online
  4. Reliance Tax Saver (ELSS) FundInvest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) FundInvest Online
  7. SBI Magnum Tax Gain Scheme 1993Invest Online
  8. Sundaram Tax SaverInvest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFundsInvest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

Rs 14,000 Crore worth of tax free bonds coming soon from NHAI , PFC

  NHAI, PFC file prospectuses, coupon rate not yet decided MORE debt investment options have opened up for investors with AAA rated tax-free bonds worth over Rs 14,000 crore lined up. The National Highway Authority of India ( NHAI ) and Power Finance Corporation ( PFC ) are offering Rs 10,000 crore and Rs 4,033.13 crore worth of tax-free bonds, respectively, as per prospectuses filed with the Securities and Exchange Board of India (Sebi). Of a Rs 5,000 crore issue by PFC, Rs 966.87 crore has already been raised through private placement on September 28 and November 1. Tax-free bonds give investors tax-free return on any amount invested. In another kind of bonds, the long-term infrastructure bonds, investments up to Rs 20,000 are tax exempt, that is this cap amount can be deducted from the taxable income. Accordingly, the NHAI prospectus has clarified that only the amount of interest from -and not the actual investment on -its new bonds will be tax-free. "NHAI's publ...
Read more

Change in Fund Manager for some of HSBC Mutual Fund Schemes

Buy Gold Mutual Funds Invest Mutual Funds Online Download Mutual Fund Application Forms Call 0 94 8300 8300 (India) However, this facility is only available to Unit holders who have been assigned a folio number by the AMC.   HSBC Mutual Fund has announced that the below mentioned schemes shall be managed by the new fund managers as stated in the table. The effective date will be July 02, 2012.   Amaresh Mishra 's will be Vice President and Assistant Fund Manager. Having done a Post graduate diploma in Business Management and Bachelor of Chemical Engineering, he has over seven years of experience in Equities and Sales.   Mr. Piyush Harlalka's designation shall be Vice President- Fixed Income. Qualified as a C.A., C.S. and holding M.B.A.( Finance degree), he has over six years of experience in Fund management and ...
Read more

How EEE and EET Tax affect Retirement Investments

  An important factor while choosing a financial product is its taxation , and for retirement savings, this is even more important as the sums involved are usually life-long savings. Here's a look at the current tax treatment of three major long-term retirement planning products, which are - Employees' Provident Fund (EPF), Public Provident Fund (PPF) and National Pension System (NPS). EPF The tax treatment is EEE, which means your money is exempt from taxes at the time of investment, accumulation and withdrawal. At the time of investment, the tax deduction is under the limit of section 80C of the Income-tax Act , which is currently Rs 1.5 lakh. Partial withdrawals are also tax-free if made after 5 years of continuous service. If withdrawals are made before 5 years of service, 10% tax will be deducted at source. Exceptions have also been provided for transfer of amount and conditions wherein the subscriber is unemployed for more than 2 months or the loss of job was beyond th...
Read more

Personal Finance: You can insure your wedding

But luck may not always be on your side. With the frequency of such attacks, as also other risks and unforeseen accidents growing, a wedding insurance is something you may want to look at if a marriage is being planned in the family. Event insurance plans like this is still in its nascent stages due to low awareness. And given the sacred nature of the ritual, nobody wants to discuss or think negative. But as wedding spends and risks grow, it makes sense to cover the potential monetary loss. The policy in those countries even covers the loss of the wedding ring, the wedding gown not reaching on time and even the expenses/loss due to late or non-appearance of the photographer which may mean staging the event once again for the photograph. In India, most insurance companies — including ICICI Lombard General Insurance, Oriental Insurance, Bajaj Allianz and National Insurance — offer wedding insurance. The policy is tailor made to individual requirements and needs. The sum insur...
Read more

DSP BlackRock MidCap Fund

Best SIP Funds Online   HOW HAS DSP BlackRock Small & Mid Cap Fund PERFORMED? With a 10-year return of 14.61%, the fund has outperformed both the category average (12.34%) and the benchmark (10%) by a good margin. Should you invest in DSP BlackRock Small & Mid Cap Fund? This fund invests predominantly in mid-cap stocks but takes a sizeable exposure in small-caps as well. The focus is on nascent companies with high growth potential. The fund manager places emphasis on quality and avoids inferior businesses even if these look tempting from a valuation perspective. Over the past year, the fund portfolio has grown, having added to some of the underperforming sectors like chemicals and healthcare. Its portfolio churn has come down significantly. The heavily diversified portfolio is run completely agnostic of its benchmark index— most bets are from outside the index—which can at times lead to bouts of underperformance as seen in the recent years....
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now