[narayan]

Originally Posted by hothatchaway

Please share the online process.

you can do it via camsonline. create an ID first if you dont have. Then you can switch online.

[thoma]

Originally Posted by smartcat

There is approximately 60% probability of our stock index going up by the end of the year

So its OK if your gains go down a bit, as long as you don't need the money.

That's the catch, I might need the money this year. Maybe I'll use some other and save this for real long term, not sure.

Is there a limit for 'long term' after which the growth wanes off?

Anyway thanks for the pointers.

[SmartCat]

Originally Posted by thoma

Is there a limit for 'long term' after which the growth wanes off?

Increase in Nifty/Sensex and company earnings growth is a bit like the Hare and Tortoise story. Nifty/Sensex can suddenly take off like a rabbit but later, it will wait or probably go to sleep for years together for the tortoise (earnings growth) to catch up. That is, company earnings growth is more or less stable (5 to 20% per year) while Nifty/Sensex is volatile.

That's why everybody parrots the SIP strategy. If you invest lumpsum, it is quite likely that you will invest at the top. And then you have to wait for the earnings to catch up.

[srikanthns]

I posted some time back about my investment in Franklin Bluechip under performing for the past 3 years compared to Bench mark as well as its peers and asked whether i should redeem.
Now I slightly modified that action: Doing an STP from FI Bluechip to Franklin India PRIMA!
Is this a correct strategy to reclaim some of the lost returns?

[bullrun87]

Originally Posted by srikanthns

I posted some time back about my investment in Franklin Bluechip under performing for the past 3 years compared to Bench mark as well as its peers and asked whether i should redeem.
Now I slightly modified that action: Doing an STP from FI Bluechip to Franklin India PRIMA!
Is this a correct strategy to reclaim some of the lost returns?

You are shifting from a large cap fund to a mid cap fund. This switch will make your portfolio riskier and skew the large/ mid cap ratio of your equity holdings in favor of mid caps. One must invest atleast 50 percent of equity portfolio in large caps for stability. If franklin bluechip was your only source of large cap holdings then you should not switch to a mid cap fund and instead choose another large cap fund. I recommend an index fund like UTI index fund nifty 50 plan.

[Latheesh]

Help!
I have some cash which I do not need for next 5 years at least. Is there any other alternatives to FD (with slightly better after tax returns?)

[sunilch]

Originally Posted by Latheesh

Help!
I have some cash which I do not need for next 5 years at least. Is there any other alternatives to FD (with slightly better after tax returns?)

Equity Arbitrage Funds are worth exploring. Flexible to withdraw in case of emergency need and not too risky (very very unlikely to loose capital).

[pradkumar]

You can think about a liquid fund or a short term debt fund. Liquid funds will give you a return of around 7.5% and you get indexation benefits if you hold on to them for more than 3 years.

If you are looking at debt funds, be sure to look at good credit rating. Here is an example: https://www.valueresearchonline.com/...hemecode=11308

Watch this video for FDs vs. debt funds.

https://www.youtube.com/watch?v=4TJd9KQEL5Q

Debt funds are easy to exit and you get your money in T+1 days.

Thanks,

Pradeep

Originally Posted by Latheesh

Help!
I have some cash which I do not need for next 5 years at least. Is there any other alternatives to FD (with slightly better after tax returns?)

[DigitalOne]

John Bogle, Vanguard founder and low-cost investing pioneer, dies at 89

[Sri Vathsa]

Originally Posted by pradkumar

You can think about a liquid fund or a short term debt fund......

If you are looking at debt funds, be sure to look at good credit rating.

How can anyone be sure about the rating agencies after il&fs drama?

Most of these rating agencies get paid by the very company whom they are evaluating, some of these debt funds lost anywhere between 3 to 7 percent because of exposure to 'AAA' rated il&fs.

If you want a risk free and safe return, fixed deposit is the way to go or if you have an account with zerodha they offer a way to invest in government bonds, which is fixed tenure and guaranteed by govt of India (please note: I have never invested in these govt bonds until now, its fairly new for me and I am still studying various aspects of it) there might be some brokerage charges for investing in these bonds.


https://m.economictimes.com/mf/mf-ne...w/66475202.cms

https://thewire.in/business/ilfs-moo...ting-companies

[pradkumar]

Hi,

Although there are accredited credit rating agencies, I don't think any fund manager would blindly go by ratings alone. They do their own diligence.

Essentially, fund managers try to assess whether a company has sustainable cash flows for the next 3-5 years or at least through the period for which they are buying the bond.

Before the IL&FS fiasco, there was Amtek Auto downgrade. Amtek Auto was rated AA- by CARE and A+ by Brickworks before it suffered losses, ran into financial problems and was downgraded by both the agencies. One can assume that AAA bonds cannot be suddenly downgraded to default grade. Therefore, look for maximum AAA bonds in the portfolio. As an example (I am not promoting this fund), HDFC Short Term, has 89% of its portfolio in AAA. HDFC being a conservative fund house, I expect their diligence to be on the safer side.

Agreed, that it doesn't provide the safety of FDs. However, after taxes, FDs barely provide above the inflation rate. Debt funds, on the other hand, offer indexation benefits.

Thanks,

Pradeep

Originally Posted by Sri Vathsa

How can anyone be sure about the rating agencies after il&fs drama?

Most of these rating agencies get paid by the very company whom they are evaluating, some of these debt funds lost anywhere between 3 to 7 percent because of exposure to 'AAA' rated il&fs.

If you want a risk free and safe return, fixed deposit is the way to go or if you have an account with zerodha they offer a way to invest in government bonds, which is fixed tenure and guaranteed by govt of India (please note: I have never invested in these govt bonds until now, its fairly new for me and I am still studying various aspects of it) there might be some brokerage charges for investing in these bonds.


https://m.economictimes.com/mf/mf-ne...w/66475202.cms

https://thewire.in/business/ilfs-moo...ting-companies

[rovingeye]

Debt fund investors alert!

"ICRA puts 6 mutual fund schemes under watch with negative implications"

https://www.financialexpress.com/mon.../1451237/lite/

[pradkumar]

My bad! I gave an example of a fund that has almost 89% of its portfolio in AAA rated paper and that fund is now under watch for rating action.

https://economictimes.indiatimes.com...w/67636946.cms

https://economictimes.indiatimes.com...w/67651382.cms

Pradeep

Originally Posted by pradkumar

Hi,

Although there are accredited credit rating agencies, I don't think any fund manager would blindly go by ratings alone. They do their own diligence.

Essentially, fund managers try to assess whether a company has sustainable cash flows for the next 3-5 years or at least through the period for which they are buying the bond.

Before the IL&FS fiasco, there was Amtek Auto downgrade. Amtek Auto was rated AA- by CARE and A+ by Brickworks before it suffered losses, ran into financial problems and was downgraded by both the agencies. One can assume that AAA bonds cannot be suddenly downgraded to default grade. Therefore, look for maximum AAA bonds in the portfolio. As an example (I am not promoting this fund), HDFC Short Term, has 89% of its portfolio in AAA. HDFC being a conservative fund house, I expect their diligence to be on the safer side.

Agreed, that it doesn't provide the safety of FDs. However, after taxes, FDs barely provide above the inflation rate. Debt funds, on the other hand, offer indexation benefits.

Thanks,

Pradeep

[roadjourno]

Originally Posted by rovingeye

Debt fund investors alert!

"ICRA puts 6 mutual fund schemes under watch with negative implications"

https://www.financialexpress.com/mon.../1451237/lite/

I have large amount invested in HDFC Short Term Debt Fund. Is it time to move it out from there ? Please advise

[SmartCat]

Originally Posted by roadjourno

I have large amount invested in HDFC Short Term Debt Fund. Is it time to move it out from there ? Please advise

Relax. The exposure to IL&FS SPV is just 0.5% of assets.