Comments on: Tax saving with safety locked in

By: Rahul Rawat

Rahul Rawat — Fri, 01 Jan 2010 17:43:03 +0000

Hi! I am falling short of Rs27000 for my 1lac investment u/s 80c. Can someone guide me with best tax saving & high return investment options. I have already invested ICICI life stage RP plan, HDFC standard LIC & LIC. Pls suggest some investment options aprt from these.

I was thinking of investing some amount in Gold ETF & some in ELSS. Pls suggest.

By: Manish Sinha

Manish Sinha — Tue, 10 Mar 2009 08:08:28 +0000

There is this general perception that ELSS are meant mostly for young investors who have a long term perspective. This line of thought can be called as Blind Investment. The average return that ELSS can offer in the long term under more than healthy market conditions is never going to be more than 12% p.a. When PPF, Bank deposits, Post Offices, etc. offer guaranteed return of almost 10% annually in the long run by the power of compounding, what else except “greed” motivates us to invest in the Capital Markat.

By: Praveen Trehan

Praveen Trehan — Tue, 10 Mar 2009 04:32:33 +0000

Anil,
You are right that gold ETF are easier to trade and safe.
But does it gives you gold when you redeem it? No
The ETF funds are not 100% backed by physical gold. They keep only 20-30% of physical gold. ETF nav is only goverend by gold prices.

What if the fund house managing gold ETF fails? Think of a worst case scenario… Because the fund house does not keep the 100% physical gold of equivalent value of ETF fund. If there is redemption pressure on the fund house, it may not be able to give u back the money?

Bottom line: buy some physical gold also, don’t invest into Gold ETF as a substitute of buying gold

By: Kartik

Kartik — Thu, 05 Mar 2009 08:59:08 +0000

it may not be advisable to aggressively invest in Gold, already there is lot of speculation going on there & its downslide may begin sooner than later.

also under the current worldwide economic situation it would be advisable to go heavy on govt backed investment instruments at least in the short term.

all the common logic that you should invest in ELSS if your are young doesnt hold ground….
just imagine if you are young & invested heavily in ELSS & also face job insecurity… you may not have a good chance to live long enough to enjoy your old age…

as they say in the long run everyone is dead… so even youngsters are advised to invest sensibly in safe investment options giving preference to govt backed instruments.

By: Anil Chaddha

Anil Chaddha — Tue, 03 Mar 2009 17:51:37 +0000

Rajesh
Why not Gold ETFs?
Why are you buying gold coins.. ETFs are safer to hold, easy to invest and sell and more tax efficient as well.

By: rajesh

rajesh — Tue, 03 Mar 2009 15:22:39 +0000

I think a balance of post office / govt. bank based/backed, ELSS funds and Gold (coins which can sold back even though this does not help tax savings) are very good investment options.

And always keep a balanced investment with both risk (high returns) & low risk (low returns) so by this way your gains would even out and you will have fair earnings

That how i am investing for the past 3 1/2 years and i dont loose sleep if my high risk investment’s current year earnings goes down as i making a good earnings in gold this year

- Rajesh

By: Ram

Ram — Fri, 27 Feb 2009 14:19:49 +0000

Tony, if you are young and are planning your married life and kids and retirement start investing in mutual funds.
If you are old and nearing retirement .. invest in safe options ..

Good luck.. hope you become a crorepati soon.

By: Tony

Tony — Fri, 27 Feb 2009 13:20:07 +0000

Guess I need to start investing. Ram Prasad must be owning a fleet of taxis by now.

By: Ram Gopal Jaikishan

Ram Gopal Jaikishan — Fri, 27 Feb 2009 09:37:35 +0000

Well, safety is important.. but I still believe one should buy ELSS funds if they are planning their future.. Equities are going to help the portfolio… but yes.. I agree that some debt component is essential always.