Sip & mutual funds

This query is : Resolved

Mayank Garg (Querist)
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23 February 2012 how can we invest in sips & gold etf...???
what is rate of retrn based on past exp..
pls let me knw the complete history of sips

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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28 February 2012 what exactly would be a prudent investment option today? Investing in mutual fund SIPs and PPF continue to remain most popular as they offer fixed returns after a certain time. But sticking to a disciplined plan is important if you want greater returns.

Experts believe procrastinating investment plans is the most common mistake parents make. A timely plan equips you with a proper assessment of all the cost factors as also allows you to select schemes and products that ensure maximum returns.

Even for parents who start investing when the children are young, there are a good many chances of getting caught off guard with last-minute expenses. It is quite likely that you end up using the money saved for a rainy day for something you may not have earmarked.

Some little calculations can do the trick for you. While parents may shy away from investing in equities, experts suggest that with a longer time horizon in hand, this could be as lucrative an option. Taking calculated risks will help maximize returns, says Surya Bhatia, managing partner, Asset Managers.

Again, most parents consider a single corpus of investments for children, but wealth managers advise creating different baskets for various categories like education, marriage or maybe helping the children settle down. A financial planner can help ease the task, as multiple investment pools can create management hassles.

In case of insurance, Bhatia believes, parents end up confusing between insurance and investment products. Worse still, most of them opt for covers that go by the name of "children's plans", which are more expensive and often eat into the returns. Besides, they, too, invest in the same instruments - equity or debt, like in the case of mutual fund. Having a diversified investment portfolio will ensure greater returns. However, what is important is to downsize the risk appetite as you approach the time for liquidating your assets.

If you are a risk averse person, investment in mutual funds and gold ETFs is recommended.

"Investment in SIPs and gold ETFs is increasing. With gold prices going through the roof, ETF has an advantage as you can buy in small amounts for a long period of time and then hedge it for physical gold," said Vineet Arora, executive vice-president & head of production and distribution, ICICI Securities. Experts also recommend that parents should opt for schemes like mediclaim for both themselves and the child.