Strategy for transcations in Mutual Funds..Pls Help!

[Quakerman]

Swana

Thank you so very much for your message

Quakerman

 

[chattogeorge]

HI

I have a lumpsum amount(20lac) to invest. Please advice me on strategy that I should adopt now. My risk apetite is high and Inv horizon is >8years

1. Invest in a portfolio of balanced funds

HDFC PRU
DSPBR BALA
Birla 95
SBI Mag Balanced
I dont have to worry about portfolio rebalancing in every year and also no tax deduction for debt and equity variants if kept more than 1 year..
Invest 5lac in each fund in next correction or start STP into these funds right away?

2. Make a 50:50 equity:debt allocation in

HDFC Top200 HDFC High Int Short term 30%
DSPBR Equity DSP Strategic Bond 30%
Birla Midcap Birla Dyn Bond 20%
IDFC Pre Equity IDFC DYN Bond 20%

And follow a value investment approach by trasfering from debt to equity during each market ocrrections till I reach my required asset allocation pattern of Eqb as 75:25

3. Same allocation as in step 2 but
A P/E based investing approach suggested by Yogesh in IDFC PR Eq and Birla Midcap based on CNX midcap
and for DSPBR EQ and HDFCTop200 follow a STP weekly.


Or if any of the senior members please suggest some technique that works well for a lumpsum investment at this time.

Regards,

George

 

[life2007]

Hello Guys!

Sorry, I was busy and had not visited the forum for some days now! Even now I just had a peek as what is going on.

Thank you for such a complied intelluctual advise. Definitely some food for thought!

Some did get into this not so developed brain, while other were just flying bouncers over my head. I shall come back to you with some more queries based on your suggestions!

I hope we all get benefitted by this discussion! If you look carefully, this point can be interesting for a healthy debate, because we need to channelise our profits in stock market rather than just being on paper and never have a chance to realize it..

Please continue pouring your heads. I will come back soon

Regards

Jeet

 

[yogesh-tiwari]

Here you go..

http://www.traderji.com/mutual-funds-discussion-forum/30205-mf-portfolio-building-2.html#post352768

 

[rckaushal]

Dear Seniors/Gurus,

I am relatively new to MF business. I shall be grateful if someone could help my queries.

What is P/E ratio? Could you kindly through some light about P/E ratio in respect of MFs? Is it common for all MFs or for any particular MF?

Wherefrom we get the information as if a particular MF is midcap or large cap?

I started investing in February 2008. Peak of Market. Right now I am at par of my investments [roughly no profit and no loss]. Having no previous experience I went by the star ratings and kept on investing. Now there are many funds that I have invested in; I want to reshuffle my investment. Kindly advise how to proceed. Right now I dont need my money back. I may need some of it next year or so. Here is my portfolio:

Fund Inv. Amt.

Reliance RSF - Equity (G) 335,573
ICICI Pru Infrastructure (D) 399,322
Reliance Growth Fund - RP (G) 109,000
Reliance Natural Resources (G) 100,049
HDFC Infrastructure Fund (G) 50,000
Reliance Natural Resources (D) 25,013
Kotak 30 (G) 29,962
UTI Opportunities Fund (G) 45,008
Reliance Vision Fund - RP (G) 15,000
Reliance Diver. Power - RP (G) 20,000
ICICI Pru Dynamic Plan (D) 79,893
ICICI Pru Infrastructure (G) 10,002
Sundaram Select Focus - RP (G) 29,815
ICICI Pru Dynamic Plan (G) 4,999
ICICI Pru Fusion Sr-3 RP (G) 50,000
Reliance Banking Fund (G) 67,855
Total invested 1,371,672

Thanks you for reading above.

With warm regards,

Kaushal

 

[chattogeorge]

Hi Kaushal,

P/E ratio is the price to earnings ratio. It gives the value of a stock. The P/E discussed here is with respect to any particular index and you will get the current index p/E from its corresponding website.

But slowly and steadily you have attained a portfolio with a plethora of funds. Each fund itself invest in 20-300 Stocks depending on strategy.
Since you have these much funds it gaves an effect of investing in an index fund. So if you wish to stay invested in these funds I will suggest you to invest in cnxsp500 fund which will cover almost all these in the list. Since you pay 2-2.5% every year for fund managemtn its better to select 4-5 funds and invest in those. Otherwise stick to index fund which carges from .5-1.5% atleast you save this 1% and also time for tracking these funds(if you have ever done this)

Dont chase for ratings as a 5star fund this time wont be a star next year. And also some 5 star funds in valueresearch online wont be a 5* or even a 4* in morning star or reliance money or moneycontrol. So select 4-5 funds based on their performance and stick to those.l

This is only and example I am giveing you, based on you investments now.

All the funds you have selected are good. BUt put together you almost nullified effect of every funds.

Take 2 large cap from Birla SL frontline Eq or HDFC Top 200 or DSP TOP 100 60%
Take 2 midcap from Sundaram SMILE or Birla MIdcap or IDFC Premier Equity. 30%

So Now you have 4 funds.
Add some glitter with Gold Bees. 10%


Start SIP with 2 large cap funds and case of Gold Bees buy sytematically in each dips of gold value but systematically in every month. Add 1 0r 2 dynamic bond funds(dirla dynamic and IDFC dynamic) to this part of the portfolio for asset allocation. Maintain a equity:debt ratio based on your risk. 70:30 for ex. and rebalance every year so that you dont need to pay any capital gains tax or start transfering to dynamic bond funds when you see that nifty pe has crossed 22 and full balance when it cross 25.

For the midcap funds keep money in a debt fund of the corresponding schemes and transfer it to them when the pe of cnx midcap. Refer link to Yogeshs strategy
http://www.traderji.com/mutual-funds-discussion-forum/30205-mf-portfolio-building-2.html#post352768
This one you dont need a asset allocation. You can shift in between maximum and minimum equity as 70 and 30 based on cnx midcap p/e.

Also one advice. People spend lot of hours earning money but are not interestex in spending a few hours in a month to manage the money. So you should look serioously into it and once you learn the basics its only a practise of daily updations of news in websites you trust. As long as we are not traders means mong term investors we should get our basics right for investment to grow. Final investment decision should be your based on your cognizanse and even dont trust on even my advise listed above.Evaluate yourself and then decide based on your apetite.

Regards,

George

 

[rckaushal]

Dear Mr. George,
Thanks you so much for the advice. As you see, I have already invested in two funds viz. Reliance Regular Saving Fund and ICICI infrastructure around 4 lakh each. Should I leave it as it is? If so what is the scope of these funds?
Are these large cap or midcap funds? Wherefrom do we get to know about caps (large/small/mid).I only know that 20-40 bn rs means midcap and 40+ bn rupees means large cap. Is my interpretation correct?

Could you also enlighten the procedure of investing in index funds / cnxsp500 fund ?
Shall be grateful for your esteemed advise.

Warm Regards,

Kaushal

 

[chattogeorge]

As I told you the weightage should be given to large cap fund without a sector bias.

ICICI PRU INfra is a good infra fund and large cap biased.
Reliance RSF is a good fund but how long the performance continue is a fact to think.

Its perfect time to build new portfolio by selling in smaller amounts what you have as and when you make 10-15% profit and put the money when market crash donw another 20-25% through stp or lumpsum. BUt you also need a claculation with tax implications. You have to set goals and build corpus for those then life will be far better from wild savings.

In India we forgot to live in verge of saving for kids future. So proper planning brings lot of fun n satisfaction as we know what we are having and what we can do with that.

You have enough money in equity and I think its not a bad idea to contact a financila planner at this stage as market is in the upswing now. Some bucks and time spend now will be an asset for you.Because you need some more insight into things. This is the perfect time to build or align or tweak you portfolio and if you try to learn by yourself and act fast there are more chances of going wrong. So this time get advise of a financial planner and get advice for atleast what to do for coming 1+ year and then 1 year is good enough for you to get info about stocks , mf and market valuations and then you can adopt do-it-yourself strategy from next year.