SOME OFTEN ASKED QUESTIONS BY YOUNG INVESTORS OF INDIA

ALL INVESTORS ARE INQUISITIVE . THEY HAVE LOTS OF QUESTIONS IN THEIR MIND. Some ASK OPENLY BUT A FEW DO NOT ASK DIRECTLY BUT WAIT FOR SOMEONE TO ASK THE QUESTIONS ON THEIR BEHALF. HERE ARE SOME OF THE OFTEN ASKED QUESTIONS. ACCOMPANYING ANSWERS ALSO GIVEN HEREUNDER. BUT MORE KNOWLEDGEABLE CAN ANSWER IT BETTER. WE WELCOME WELL THOUGHT OUT ANSWER AS MEASURE OF SERVICE TO NEW YOUNG INVESTORS. HERE WE GO:


QUESTION:

WHETHER INVESTMENT IN DIVERSIFIED MUTUAL FUND IS BETTER THAN ULIP ?

ANSWER :

Ulip and Diversified Mutual fund are belong to two different class of asset base : Ulip is not an investment product.It is an insurance product.So itis a costly product compared to any mutual fund.Ulip is very good if taken for longer period say tfor ten to fifteen years.It is ideal for saving money for children's education or marriage.In short term it does not give adequate return.So if ulip is redeemed within three to four years there is every possibility of incurring loss . Diversified Mutual fund is investment product and is less costly. Now a days ther4e is no entry load.ther4e are exit load if redeemed before one year. The administration charges are lower at around 2 to 2.%5 only. So somebody wants to invest for four to five years only it should be Diversified equity fund. Ulip also provide security which mutual fund does not give. ULIP is good for long term planing.



QUESTION :

SHOULD WE TAKE INSURANCE COVER FIRST OR INVEST IN MUTUAL FUND FIRST ?

ANSXWER :

THIS ISSUE WOULD DEPEND ON THE REQUI8REMENT OF THRE PERSON CONCERNED. iN CASE THE PERSON HAS GOT FAMILY RESPOSNSIBILITY HE NEEDS TO TAKE INSURANCE SURELY. bUT IN CASE PERSON DOES NOT HAVE HAVE FAMILY OBLIGATION HE CAN OPT FOR INVESTMENT FIRST. INSURANJCE IS NOT AN INVESTMENT .iT PROVIDES SECURITY AND SAFETY OF THE FAMILY. THIS IS VERY IMPORTANT SOCIAL REQUIREMENTS FOR A PERSON WHO IS 'kARTA". A BACHELOR, WITHOUT FAMILY OBLIGATION, CAN START HIS LIFE WITH INVESTMENT OPTION .BUT AS SOON AS HE GETS MARRIED AND CHILDREN ARE BORN HE NEEDS TO PROTECT THE FAMILY WITH INSURANCE OPTION.


QUESTION ;

FOR ANY INVESTMENT ON WHOM SHOULD WE DEPEND. ? SHOULD WE DEPEND ON AGENTS, BROKERS OR SHOULD WE STUDY OURSELVES ?

ANSWER :

The best thing is to study yourself. The money belongs to you. You are the best person to protect your own money. Knowledge is power. So you need to acquire knowldge. In case due your professional business or due to lack of opportunity you cannot study you should depend on educated and wise professional advisers. All regurlar brokers and agents may not be as reliable as you want.So you need to selct your own reliable professional adv8sors. Some of the good banks have their own investment department. You can depend on tHem. You can depend on qualified, knowledgabl;e Chartered accountant or economists. but the best is study and then to invest.



QUESTION;

HOW MUCH ONE SHOULD INVEST ?

ANSWER:

THERE IS NO DEFINITE ANSWER TO THIS QUESTION. AFTER MEETING YOUR FAMILY OBLIGATION WHATEVER AMOUNT IS AVAILABLE CAN BE INVESTED AFTER SETTING ASIDE A PORTION OF IF FOR EMERGENCY REQUIREMENTS. May PEOPLE SAVE AROUND 30% OF THEIR ANNUAL EARNING.


QUESTION ;

WHERE SHOULD WE INVEST IN SHARES, MUTUAL FUND OR IN GOLD ?

ANSWER ;

EVERYONE SHOULD BEGINNING INVESTING REGULARLY IN BANK, FOLLOWED BY IN PPF AND SMALL SAVING SCHEMES. SLOWY INVESTMENT SHOULD BE MADE IN DIVERSIFIED MUTUAL FUND AND LATER IN SHARES. NONE SHOULD BEGIN INVESTING IN SHARE MARKET.IT WOULD BE DANGEROUS.


QUESTION:

HOW LONG SHOULD ONE PLAN TO INVEST IN MUTUAL FUND OR IN SHARE ?


aNSWER:

nONE NEED TO INVEST IN EQUITY FOR A SHORT TERM. IT WOULD BE SUICIDAL TO INVEST FOR ONE YEAR OR TWO YEARS. ANY INVESTMENT IN EQUITY SHOULD BE MADE IF THE PERSON CONCERNED CAN KEEP THE MONEY INVESTED AT LEAST FOR FOUR TO FIVE YEARS.

QUESTION ;

WHICH ARE THE BEST FUND WHERE INVESTMENT COULD BE MADE NOW:

ANSWER:
tHIS WOULD BE TOLD TO YOU BY YOUR PERSONAL financial ADVISERS. YOU CAN STUDY REGULARLY PERSONNEL FINANCE PAGE OF BUSINESS STANDARD, ECONOMIC TIMES AND IN ASSAM TRIBUNE AND IN THE HINDU. MOSTLY EVERY MONDAY ARTICLES ON INVESTMENT APPEARS ON THESE NEWS PAPERS. YOU CAN ALSO READ MONEY MAGAZINE OF OUTLOOK AND VIEW CNBC TV. YOU CAN ALSO VISIT "VALUE RESEARCH.CM" AND 'MONEY CONTROL.COM" AND SELECT FIVE STAR AND FOUR STAR FUNDS.

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