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How have we managed risk

Profit booking at peak

	Conducted only for long term assets
	Not done for short term assets since it adds to cost

Diversification into avenues that are less risky

	Real Estate Funds
	Capital Protection funds
	Gold funds

We had conducted a seminar in Nov 07; where we spoke about diversification into these avenues, diversification of ESOPs and using debt to enhance returns

Regular alerts on ESOPs given to customers in major tech companies like Wipro, Infosys, Satyam – one of the key reasons for the negative outlook was our concern on the US

What’s on your mind?

I have a lot of investments in MNC Mutual Funds and Insurance?

	Both these avenues have among the strongest regulators
	Strength of the Indian regulatory framework seen today – there is no subprime in India
	High capital adequacy norms, MF assets cannot be misuse

Are MNC/Indian Banks Risky?

	We are confident of RBI measures to protect the Indian Investor
	Useful not to keep very high balances in MNC banks

Turmoil has affected my ULIPs as well? What should I do now?

	ULIPs with allocation into Equity Funds will see downtrend
	Increase allocation to equities and maintain a 20% exposure into Debt post-such switch

When is the right time to switch, when will market bottom out?

	Switches are normally conducted in phases, closer to support levels
	Such investments will provide substantial returns over a 5 Yr period

What’s on your mind?

What is the liquidity problem in MFs

	Due to tightening of liquidity, corporates are having to draw down on their liquid funds
	Strength of the Indian regulatory framework seen today – there is no subprime in India
	For a long term investor, this is not a significant cause of concern
	There are options in bank Certificate of Deposits and Govt Bonds

Is ‘Indian Economy’ busted, any tips to surviving the current turmoil?

	Relatively, India is likely to do better than most other economies
	Predominantly domestic driven – lower risk
	The market is a leading indicator to economic downturn, but discounts this in advance
	Sleep over bad times, like many of us have done with our ESOPs- markets come back strongly (especially if you have a diversified portfolio)
	Focus on your needs – that is why most of us have done our investments

What about Real Estate?

	Real Estate prices have weakened. About 12% - 15% correction is expected further
	For self-stay one take a longer term view due to tax benefits and don’t be in a hurry
	For Invt. purposes you can wait for about 6-24 Mths and conduct investment

Gold has run up, has it peaked yet? Is Gold still a good option?

	Gold has still about 15% from earlier peak
	Gold is complementary to equity and does well at very negative times
	We expect a supernormal return cycle in gold in this decade like what we saw in oil

Take advantage of the opportunity
	Continue your SIPs- that is one of the best investment options for an individual

	Weekly STPs are the best bet for lumpsum investments

	Stay diversified, especially avenues that are negatively correlated

	Continue to focus on your needs

	Use tax efficient debt funds instead of bank deposits – there are options that invest in bank deposits and even govt bonds

	Switch into equity over phases and benefit from the slumps

	Do not Panic! It’s investments at these points which will help you benefit in the long term

Structured Real Estate

Overseas funds- a major fund source to real estate in India

Got return of 20-24%, mainly through the equity route

With tightening liquidity, developers are likely to turn to domestic funding – not preferred earlier due to higher cost

We see an opportunity in attractive debt funding

	No impact of downturn in sector due to debt funding route
	Security in form of physical real estate to be conservative

The returns would be attractive in current environment

	Eg A 22% return, Rs 1cr would become Rs 1.7cr in 30 months
	On maturity can be redeployed into Real Estate / Equity when they are likely to start delivering returns

Right Horizons would create required structures

	Keeping in mind safety and tax efficiency
	Provide oversight and monitoring

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