1. Investment Planning
and Strategy -
Role of Professionals
CA K.Raghu
Central Council Member

2. Investment Scenario
Investment Scenario (2010-2011)
 300 million plus middle class - growing to 580
million plus in 2025
 Large English-speaking population by 2011, will
be the largest English-speaking country
 Largest democracy in the World (1.1 billion
strong)
 Favorable Demographics (54% 0-25 years)
 Free and Lively media, well-established
independent legal system, and free fair elections
 Investment-friendly, liberalized economy

3. Value Add Services – By
practicing professionals in
Investment Planning
 CA’s have intimate knowledge of clients
financial transactions
 Opportunity to provide value-added services
in Investment Planning and Strategy
 Personalised wealth mapping services
 Assist in meeting clients shor term/medium
term /long term investment goals

4. What you need to do ?
 Evaluate various investment options like
 Insurance, Mutual Funds, Equity Shares,
Bonds, Debentures
 Knowledge of the Capital Markets

5. Is there such a thing like a
perfect investment?
 What the best investment is that will
maximise returns or
 What is the best mutual fund or
 What is the best stock portfolio?
In other words there is a perpetual search
for the most perfect investment.

6. India”s Growth Story
 India – Most favoured destination for
overseas companies
 $ 1 trillion economy – Taken 60 yrs
 Next one trillion will take only 6 years
 Provides tremendous prosperity amongst
Indians
 Urgent need for professionals to capture this
rapid growth

7. Essential requirements for a
Good Investment
Complete Safety
The original investment must remain intact.
Bank fixed deposits (FD), Government
bonds, other bonds and similar fixed interest
type investments offer this benefit .

8. Essential requirements for a
Good Investment
High rate of return
The returns on the investment should be such
that it beats inflation by at least 5 to 10% and
thus we are able to create real wealth for
ourselves. it is real estate, stocks, equity
mutual funds that qualify in this category but
then safety of capital is compromised.

9. Essential requirements for a
Good Investment
High Liquidity
The investment must be such that we can exit
anytime we like without having to worry about
associated penalties.

10. Essential requirements for a
Good Investment
No or minimal transaction costs
An investment that does not have entry cost
or has minimal associated transaction costs
can have a huge impact on the ongoing
profitability of that investment.

11. Essential requirements for a
Good Investment
No taxes or minimal taxes
Ideally the returns from our investments
must be completely free of any tax liability.
No need for knowledge
The investment must be completely easy to
understand and should not require special
knowledge.

12. Essential requirements for a
Good Investment
Completely passive
The investment does not need active
management. Real estate qualifies here but
then liquidity has to be compromised with and
transactions cost can be exceedingly high.

13. Essential requirements for a
Good Investment
Shortest time frame
An investment that moves like a rocket
and makes you rich really fast like ‘a
double in a year’ type. You could be a
trader in derivatives but then safety of
capital is out of question.

14. Investment Strategy
 Develop a habit of small savings
 Save for a rainy day since future is uncertain
 Pay your liabilities as soon as possible
 Plan for your retirement
 Create a source for Passive Income eg.Rental
Income and Dividend income
 Invest in Tax Saving Investment schemes
 Spend less than what you earn
 Take person interest in Investment decisions

15. Investment Mix
Your investment portfolio should take care of
your :
 Current needs of your family
 Children educational needs
 Children’s Marriage
 Buying a House
 Pension during retirement.

16. Tips for Investing Safely and
Rightly
 Don’t make your investment decisions on
hear say.
 Understand risk factors linked to investments
 Review and track your investments
periodically.
 Buy Insurance for coverage and not tax
purposes.
 Take the help of an Investment Consultant

17. Investment Tips for Beginners
 Start saving and investing early in life.
 Prepare an investment roadmap.
 Invest in a diversified portfolio.
 Buy insurance for coverage and not tax purposes.
 Invest in Stocks if you are prepared to take risks.
 Invest in Mutual Funds if you are prepared to take
moderate risks.
 Have an investment discipline.

18. Investment Options
 LifeInsurance
 Post Office Schemes
 Equity Shares
 Mutual Funds
 Company Deposits
 Bank Deposits
 Real Estate
 Gold and Silver

19. Equity Shares
 Capital Appreciation
 Bonus Shares
 Annual Dividend
 Right Shares
 Can be pledged as a security
 Easy liquidity

20. Equity Shares - Problems
 Changing Market Value.
 Uncertain government policies.
 No guarantee of profits.
 Need for constant monitoring
 Oversubscription of IPO’s
 Professional Guidance required for making
right investment in shares.

21. Life Insurance
 Protects you and your family
 Promotes regular savings
 Tax Benefits
 Earn attractive bonus

22. Insurance – Do’s and Don'ts
 Keep your premiums affordable
 Choose a right plan
 Don’t over /under insure
 Pay premiums on time since partly paid policies are
not eligible for bonuses.
 Revive Lapsed policies
 Keep your spouse informed about your Insurance
coverage.
 File all the insurance receipts.
 Ensure you nominate your spouse.
 Consult a good insurance advisor.

23. Post Office Schemes - Options
 Post Office Monthly Income Scheme
 National Savings Certificate
 Kisan Vikas Patra
 Public Provident Fund
 Senior Citizens Saving Schemes
 5 year Recurring Deposit
 Time Deposits

24. Post Office Schemes –
Features
 Backed by Government of India
 Tax Benefits
 Suitable for small investors
 Attractive rate of interest
 Liquidity

25. Mutual Funds
 Professionally managed
 Diversification of risk
 Daily NAV
 High Liquidity
 Tax Concessions
 Freedom of Emotional attachment
 Automatic re-investment of Dividend
 Freedom from Monitoring and housekeeping

26. Bank Deposits
 High Safety
 Low Interest
 High Liquidity
 Easy to manage

27. Bank Deposits - Suggestions
 Keep Small Deposits – Less than One lakh
 Deposits should be in Joint names
 Renew Matured Deposits
 New Tax benefits from FY 2006-2007 –
Rs.1,00,000 under Section 80 C

28. Mutual Funds - Options
 Equity Funds
 Bond Funds
 Balanced Funds
 Tax Exemption Funds
 Liquidity Funds

29. Mutual Funds - Dangers
 No guaranteed return
 Risk of inefficient management

30. Real Estate
 AgriculturalLand
 Farmhouses
 Urban Land
 Residential Property

31. Real Estate -Advantages
 Emotional Satisfaction
 Savings of Rent
 Huge Capital Appreciation
 Tax Incentives
 Easy availability of Home Loans

32. Tax Benefits for Investments
Under Section 80 C – Rs.1,00,000
 Provident Fund
 Public Provident Fund
 Life Insurance
 Pension Funds
 Infrastructure Bonds
 National Savings Certificate
 Kisan Vikas Patra
 Equity Linked Savings Scheme

33. A 5-point Investment Strategy
We present a 5-step investment strategy for
the present scenario.
1. Invest in tax-saving funds
Tax-saving funds in their new (as a part of
Section 80C) avatar have emerged as strong
contenders from the equity-oriented funds
segment.

34. A 5-point investment strategy
2. Invest in large cap funds
It would be a good time to get invested in funds
of the large cap variety; maybe in small amounts
and in select schemes but in line with your
overall risk profile.

35. A 5-point investment strategy
3. Restructure your portfolio
Another opportunity such a scenario throws up
is to dispose off poor quality investments. This
would be a right time to realign the portfolio in
sync with your risk-appetite. Booking a part of
profits would also be a good idea if investment
objectives have been achieved.

36. A 5-point investment strategy
4. Curb your enthusiasm
All the excitement emanating from the markets
notwithstanding, investors must curb their
enthusiasm. They should resist the temptation to
make a quick buck and continue to invest in line
with their risk profile.

37. A 5-point investment strategy
5. Get sound advice
Getting sound investment advice is pertinent
especially in times like we are in today. A good
investment advisor will help you successfully
ride the surge in markets and emerge winner.

38. Conclusion
 World of investments becoming more
interesting, exciting and complicated.
 Proliferation of various Investment schemes
 Investment Planning is a must for every
person..
 Investment Planning thus involves Intelligent
analysis, judicious decision making and a
strong sense of visualisation.