Naresh Narasimhan from Bangalore wants to know why a mutual fund scheme priced at Rs 10 per unit isn’t better than another scheme priced at Rs 50 a unit? Dr Unni from Latur would like to know how to calculate SIP returns on a fund scheme and how much life insurance cover should be enough for him? What’s the limit prescribed for tax exemption under 80G, asks Pune’s Milind Nitsure. Rajeev Menon from Chennai...
The list of questions from our readers is long, diverse and— if we can say so—delightful. Yet if MONEY TODAY resisted from running regular pages on readers’ investment related queries so far, it was for one simple reason. Financial advice, just like medical advice, is far too serious to be sought or given in one sentence or even one paragraph. If you are running a high fever or suspect high blood pressure will you randomly phone a doctor and ask which pill to pop? Or would you seek an appointment and see the doctor for a detailed diagnosis and prescription? More importantly, does the doctor prescribe a treatment based on what you tell him, or does he ask for details before suggesting a treatment plan?
Without a doubt, we would like to be the financial doctor of the latter kind—advise only if we know enough about your financial condition and goals. This is exactly what we do regularly in our immensely popular Portfolio Doctor section: examine one family’s finances thoroughly and offer advice that is of interest to that family, and has lessons for other investors too. Of course, we also carry two pages of Q &A on personal taxation because tax questions require lesser knowledge of the context to be answered. Months of sifting through the readers’ investment related queries opened our eyes to another possibility—of addressing investment queries without compromising on the quality of answers. Many questions we get, including some mentioned above, are so broad that answering them is like conducting a short class on intelligent investing. Doing justice to such questions does not require any knowledge of the reader’s finances. We could take only one question at a time, give a detailed, easy to understand answer, complete with examples and—if need be—calculations. That’s exactly what our new page ‘Query Corner’ is all about.
There are too many investors who could have avoided trouble and losses had they asked basic questions before investing their money. So “Ask Questions” is the best advice we can give you about how to invest wisely.
Rohit Saran
