DSIJ.in JULY 22 - AUG 4, 2019 I DALAL STREET INVESTMENT JOURNAL (^129)
Keep Your
Finances Simple
I
have a friend who is a firm believer of insurance products.
He buys a new insurance policy every year and sometimes
even two policies in a year. Now, he has more than 10
insurance policies. The only problem is that he believes
them as an investment product and the life cover that he is getting
out of it is an additional benefit. He has accumulated different
species of insurance products such as endowment, money back
and ULIP.
The chances are high that you might also know someone who is
mixing investment with insurance and is risking his financial
well-being. You need to understand that insurance is a risk
management product and not an investment. We should go for a
comprehensive insurance plan rather buying it in a piecemeal
manner. Otherwise, we don't get the best insurance value for the
money.
Our cover story this time has dealt with the subject of insurance
and investment very objectively. It clearly highlights how big you
lose by mixing insurance and investment. Three separate case
studies are taken where different insurance products are
compared with mutual fund investments along with their tax
consequences. This is to drive home the point that we need to
keep both investment and insurance separate. This will help you
remain in control of your finances.
In one of our special reports on sector funds, we have covered
how these funds can be used by an investor to spice up their
overall portfolio returns. Nonetheless, it requires an active
management of the fund because every year or so, a new sector
emerges as a winner on whom you should be riding.
You are putting your hard-earned money in different financial
products and, therefore, it is important that you get the most out
of it. The key to this is to keep it simple.
SHASHIKANT
MF Page - 01
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Vol. 34. No. 17 • JULY 22 - AUG 4, 2019
Content
Cover Story
2
MF Page
Life insurance In
Investment Portfolio?
Special Report
8
MF Page
Strategies To Invest In
Sector Funds
MF Select 14
MF Page
Financial Planning
6
MF Page
Getting Your
Asset Allocation Right
I enjoyed reading the articles in your magazine, specifically the
MF Query Board, which helped me make a right investment
decision. In your next issue, can you cover the impact of the
latest budget on mutual funds?
- Parmeet Kaur
Editor Responds: Thank you for writing to us. The latest union
budget has done little for mutual funds. It has proposed to include
exchange-traded funds (ETFs) investing in central public sector
enterprises (CPSEs) in the Section 80C bucket under the equity-
linked savings scheme (ELSS) category. Beyond this, there was
nothing directly related to MFs in this budget. Hence, it is difficult
to do a bigger story on the impact of the budget on MFs.Budget and Mutual Fund