I am investing in Reliance Growth, HDFC Top 200, Birla Sun Life Midcap and IDFC Premier Equity Plan A via SIPs of Rs 2,000 each. I want to continue investing for 5-7 years. Please give your comments about my fund selection, and suggest options if you think I should change any of them. I also invest Rs 2,000 every month in Reliance Gold, should I continue investing here? Also tell me about the pension plan options that are available today.
-Pankaj
Three of your funds – HDFC Top 200, Birla Sun Life Midcap and IDFC Premier Equity – are good funds. The fourth one, Reliance Growth, is an average fund, but you shouldn’t sell it as yet. While it hasn’t performed well of late, we think that the recent surge in the markets will help in improving this fund’s performance. You can evaluate Reliance Growth’s performance again after 4-6 months. Meanwhile, continue with the SIPs in all of your funds.
Regarding your investments in Reliance Gold, we believe that gold has become a speculative investment. While the past 6-7 years has seen a major rise in the price of gold, it has also changed the way gold investments are made. It is now possible to invest in gold in the paper form, which has created a bigger demand for gold. We think that there could be a fall in gold prices when the global markets get steady again. Hence, we don’t think that gold is a productive long-term asset.
Coming to your third question, the National Pension System (NPS) devised by the PFRDA is a good investment option. It is mandatory for the central government employees who have joined duty after 1st April 2004. If you haven’t opened an NPS account as yet, please do so and invest in it regularly. NPS is the least expensive and most transparent pension vehicle that is available today.
This article was originally published on March 09, 2012.
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