Fund Switching Advice on Diwali 2012

Dear Policy Holders,

Wish you a very happy Diwali.

I also take this occasion to suggest by way of fund switching advice in respect of the policy funds held by you. There has a very turbulent year gone by. The political development as well as economic and financial developments, here and abroad, have been quite unnerving but by God 's grace those who have been following the advice coming to you through this site has kept you in good stead. Its time to be slightly bolder now for decent gains in coming two years or so. I would now suggest the following:

-the aggressive amongst you may now keep switch 80% of fund in to Growth Fund/Equity Fund and rest in Secured Fund.

-the moderates require it to maintin in ratio of 60% in Growth/Equity Funds and 40% in Secured/Stable Funds.

-the conservative and older people should be staying in Growth/Equity Funds to the extent of 40% and rest in Secured/Stable Funds.

You may have noticed that markets in India have shown pretty good strength at lower levels, in this light we may expect that down ward pressure from this level of markets will be only limited.

Wishing you all best,

Krishna Kumar Khandelwal

Dear Policy Holders,
 
Please refer to my last two posts about fund switching. I have been advising for staying in equity investment through Growth Fund and other such funds to the maximum extent of your risk appetite. The reason was precisely this that the markets were unduly under pressure and were poised for a rebound any time whenever any trigger appeared on the scene. This would not have left any chance to get in to equities in good time as the moves were expected to be fast. This has precisely happened when just after the RBI's move to reduce the CRR by 50bps was welcomed by the markets. This allowed release of Rs 32000 crores to seep into banking system without any cost to banks.

Now since the interest rates have still not been brought down and are expected to be dealt with in the next RBI exercise, the markets are now losing ground. The markets were also helped by international events and global market performance. We are however at a critical juncture due to the forthcoming budget and the political equation change on account of the assembly elections five states. In light of this I would suggest that the equity exposure should be now 65pc for the aggressive and young, 50pc for the moderates and only 40pc for the conservative. The conservatives are advised to keep reducing their exposure by 10pc with every 5pc rise (Nifty is now just above 5400) from here.

With best wishes,

 Krishnakumar Khandelwal

Fund switching advice for ULIPs on Diwali 2011

Dear Policyholders,

I am addressing you after a long gap. In fact the economic scenario has remained fluid and no rational assessment was possible due to concerns having roots overseas. Only the basic strength of Indian economy and more particularly the bigger Indian corporates gives me courage to tell you once more that equity investment is a better option and hence you should be more inclined to keep your funds in equities in accordance with your age and risk profile. This means that the younger of you may remain in equity pocket as younger people have longer period for letting the investment fructify.

It may seem to you that right when the interest rate is going up I have been telling you what I told above. I need to explain to you the situation and the main points guiding me have been the following :

A) the RBI has been busy raising the Repo and Rverse Repo rate due mainly to address the inflationary situation. They have done it lastly today itself by 25 bps and the Repo and Reverse Repo stand at 8.5pc and 7.5pc while the CRR has been kept unchanged at 6 pc. In my vew the rate increases in medium term do not adversely affect the corporates. The possibility of readjustment right after the moderation of inflation leaves scope of good appreciation in equity prices. You may well appreciate that while rates have been going up the collective performance of corporates has still shown positive growth over the past quarters since the rate hikes have been taking place.

B) the market is flat since Oct 2007 ie it stays at the same level now as was the level in Oct 2007. But, the important point is that the sales have nearly doubled , the profits have also nearly doubled while the Price to Book Value ratio has come down under 2.9 from above 4 in Oct 2007. Typically the net-worth of companies acts as support for Indian corporates as the this counters inflation in a beautiful way. This should be understood against the back-drop of Indian economy's still nascent state which has an enormous room for growth given the demographic advantage and the ever increasing proportion of population actively participating in recountable economic activity. This ensures robust GDP growth for some more time to come besides making capital as more precious asset than bullion etc.

C) it has been observed that the Indian equities go up in geometric progression after a long period of lull (extending beyond four-five years). This is partly due to lack of depth and partly due to design by some market participants. In view of this those who miss the bus don't have any safe chance of boarding it later. So safety lies in remaining invested in equities at the moment and being prepared to see some temporary dilution of values which may happen due to some developments in world markets or some precipitate govt action. Being ready to forego the interest earning is another aspect but it gets neutralized due to the nominal returns on equities being the same as the bank interest (it means that since the PE ratio at present is under twelve the nominal return on investment remains at over eight percent).

D) there is little chance of your being in absolutely wrong sort of equities as the fund managers of HDFC Life have shown capacity to choose only the right scrips.

Every thing said above has to be understood fully by you and I would be ready to explain the points that you may have to further discuss. The responsibility of your decision lies with you only and my advice may be taken as just a broad guidance.

I wish you all a very happy Diwali, and wish that collectively we will be able to take India in to an era that is corruption free.

Krishnakumar Khandelwal

Fund Switching Advice as on 3 May 2011

Dear Policyholders,

I last addressed you on 7th April 2011 when the Nifty was at 5891 and advised to be defensive. Today, after the announcement by RBI that repo and reverse repo rates would be raised by 50bps, the market took a beating and the Nifty closed at 5562. This translates into about 6pc falls since my last advice.

Now, considering all factors which I have enumerated below , I would like to ask all to be at least 75pc in equities and some more aggressively inclined may get 100 pc into equities. This means that you may get into 75pc in 'growth fund' and rest in 'stable managed fund' .

As for the reasons behind my above advice, the first is that the PE for Nifty as also for the market at large is now about or under 15. This means that the nominal returns on equities will average more than 6pc per annum. This kind of return in equities should be welcome particularly when the economic growth will not be below 8pc even after downward revision.

The world's other markets have not lost, rather have gained over the month of April '11 .

The sector-wise situation is like this that metals, cement, telecom, IT , infrastructure, power, FMCG, pharma and petroleum sectors will not suffer on account of high interest rate regime and would see some improvement in terms of top line and bottom line in the next twelve months.

The sectors that may see some pressure on margins and drop in sales are auto, consumer durables, realty and cap-goods. The banking sector may have some adverse impact but since they have improved profitability by a wide margin over last two years and are at low PE levels there is only a limited down side in their case.

Since the investment by HDFC Life's (the name has changed now) team is in carefully selected companies, your risk is that much lower.

Also, since the inflation is otherwise eating into money's worth every passing day, an investor can not afford to miss the bus when the equities go up. This necessitates the greater equity investment for long term investors which is the profile of most of the young policy-holders.

I have explained to you matters in greater detail so that you may take an informed decision but please keep in mind that ultimately it's your own decision and risks in equity investing should be understood before hand.

Wishing you all happy times ahead,

Krishnakumar Khandelwal

Fund Switching Advice as on 7 Apr 2011

Dear Policyholders,

The matters have turned out as explained all through since Jan '11 . The markets have shown the resilience but there are a few late development that may take shine away from the markets .

I have always told you that funds under ULIPs should be subjected to risks only very carefully as there is a provision to fine tune the same in accordance. I advise you to come into balanced fund without delay and let some time pass before we review the situation.

The conservative may get into 'defensive fund' .

The result season is commencing shortly and the future course of market will be analysed afterwards.

For reference Nifty closed today at 5891 .

Wishing all best,

Krishna Kumar Khandelwal

Scope of good returns in 2011-12

Dear Policyholders,

I think almost all my policyholders having ULIPs are pleased due to the rate of return on their investments together with other benefits ie tax savings, risk-cover, benefits under sectin 80 C, facility of nomination, ease of investing, keeping debt/equity ratio at the desired level in accordance with the prevailing situation through free switching option and liquidity. This has demonstrated that the ULIPs are the best investment and insurance products.

Since after my advice to you on 29 Jan 2011 (which you may go through and refresh memory), much happened. The budget, the RBI action, the Japanese disaster, the West Asian turmoil and the local political events happened during the intervening period. The markets have not dented much although. This is because of the little room on the down-side and I in fact conveyed the same idea in previous posts.

I think there is now enough scope of getting good returns in financial year 2011-12. For reference Nifty closed at 5480 after having seen the sub-5300 level since Jan 11. It means that those who have moved to equities in greater proportion as per advice have entered at right time and patience would reward them.

I take this occasion to remind you that the ULIP holders since before  2010, have a provision under policy to top-up at minimal cost of 1 pc . All of you must top-up funds on your policies if the funds are available because these funds will not be tied-up due to absence of lock-in already (or small period left) and may participate in the debt/equity investment as per choice.

Please write to me for any specific query.

With best wishes to you and your family members,

Krishnakumar Khandelwal

Fund switching advice as on 28 Jan 2011

Dear Policyholders,

The market was down by a considerable margin when Nifty closed at 5604 . This is the same level beyond which the Nifty had scaled up to 6200 since the Sept month of 2010. This was the point where I had not allowed you to remain in equity pocket due to my concern for safety. Since almost 6 months have passed and the latest round of results shows growth in sales and profits intact.

In light of above, now you may raise the bar for investing in 'growth fund' even entirely and in accordance with you risk profile. The FY  is to close in two months and the dividends will come to investors in next three months. This will improve your position by roughly 2.5pc. So, by discounting the Nifty by cost of money, your entry will be equal to entering market at almost 4800 level in Feb 10, which by the way the lowest point for the calender year 2010.

Historically speaking, the Sensex was formed in 1978-79 and was given par value of 100. Since then it has doubled itself eight times (taking in to account the dividends recd. also ) ie doubling in every three years on an average. It has not doubled in the last three years, on the contrary it is lower by some 10 pc from the level prevailing in Jan '08. I agree that much has changed in the times since then but in a way it has changed for the better in terms of equity values in nominal terms ie in terms of value in rupee terms as the currencies have diluted all over the world. Since the value of counter has diminished ie of rupee, why should you not discount the hard assets the companies had then and added since then. This itself suggests that what you buy today is far more cheap than we think. If Onions and Potatoes can be costly why rest of the things would not, if milk and cheese will be costly why rest would not, if petrol and power will be costly why rest would not, if gold and silver will be costly why rest would not and most of all if the incomes will be more why the companies would not make more money through their operations. So, my dear friend, be absolutely comfortable in betting in market which only can keep your money's worth intact which is losing value where ever you keep it deposited, even in the bank's vaults or banks coffers.

Please, however, don't blame me for any short term hiccups that you may encounter but I have told you all above in the hope that you do not miss the bigger run that may come any time without warning and the potential for which is created in times of bad mood prevailing for reasons beyond economic sense due to political and other environmental considerations.

With best wishes,

Krishnakumar Khandelwal

Fund Switching Advice as on 25 Nov 2010

Dear Policy Holders,

The time has come when I have to advise you as under in respect of 'fund switching':

The aggressive amongst you should come in to 'growth fund' to the extent of 75pc and rest in 'secured fund'.

The moderates should be keeping funds in 'growth fund' and 'secured fund' in ratio of 50:50.

The defensive should maintain funds in 'defensive fund' entirely.

This advice has been occasioned by my observation that market has kept head above water even in the wake of 'koreas'  in a token war and the scams in housing loans by banks and the telecom sector. This has tested the ground for the equities in general and makes me believe that there would be big jump ahead after the consolidation phase. The market has even otherwise lost some 5pc value from the recent top and the present level of Nifty at 5850 is quite OK.

Now I tell you by way of good news that our insurance company has come out with a wonderful product which is a single premium unit linked product without any limitations and also provides you with life risk cover of 1.25 times or 5 times (of the premium) as per your choice and stage of life. It has provision for switching in the same fashion as you enjoy with your present ULIPs. The other good point is that it has curtailed the commission to adviser to a minimal level and has transferred the benefit to policy holders ie now your premium will be invested directly in to fund of your choice to the extent of 97.5pc. Since it is single premium product your worries about future capacity of paying premium need not be there any more. You will still have option to top-up to the extent you want it upon availability of investible funds in your hands. The benefits do not stop here but extends in the form of your right to withdraw money from your policy at will , in full or parts, once the policy has completed full five years. The eligibility of entry is right from age 18 to 65. The term is fixed as ten years. There would be no medical examination for those who opt for 1.25 times risk cover. There are numerous more benefits which I would like to tell individually to the ones who have decided to go for it in principle. Please be serious about getting in this policy purchase without wasting time as the good products which are too cheap cost-wise are prone to withdrawal by companies after a successful run and raise charges. I have told enough and it is up to your level of understanding of financial products in a 'common sense' way and after shedding negative tendencies. Needless to say that HDFC group now carries the best reputation not only in India but globally. HDFC SLIC has become number-one private insurer in October '10 in term of business done. Please do not hesitate to contact me for any further detail. The site www.hdfclife.com also enable you to view the brochures and fund performance etc.

 

Krishna Kumar Khandelwal

Fund Switching Advice as on 4 Nov 2010

Dear Policyholder,

The time has come when you do the following :

Aggressive : May get in to 'balance fund'.

Moderate and Conservative : May get in to 'defensive fund' .

This comes after the Q II results confirming the good times for the industry in general and the RBI 's policy measures not being too hurtful in its latest review on Tuesday, the 2nd of November 2010. Also the US Fed is readying to pump in a lot more liquidity in coming times which indicates that capital flows are going to remain positive.

No gainsaying that the funds saved through insurance / pension polices are long term funds and playful treatment is a big No in nursing these funds.

Wishing you very happy Diwali Times,
Krishna Kumar Khandelwal

Dear Policyholders,
   I am addressing again after about a month which has seen indices go up very fast and the Nifty has now reached a high level of above 5900. I have noticed pointers which indicate that a correction of about 5 to 10 % is on cards. Respecting this very observation I now advise you to transfer funds entirely in to 'secured fund' . This is for all three ie for the conservative, the moderates and also for the aggressive. 
  The RBI has raised the policy rates by a small margin but the bond prices are down and if you enter the secured fund now you also have a chance of appreciation in the bond values when the interest rates are revised downward and I expect it to happen after about six months from now. It is not that stocks have a bleak future but the risk-reward equation is at such point that the prudent investors keep funds in safe pocket and this applies more for the insurance and pension plan funds as they are for long term goals. My resolve is to advise you in way which takes care of safety as well as of decent growth. I am happy that this has been practically achieved since the time I began to advise you in these columns.
   The new plans have been introduced by companies as per the IRDA guidelines but what I find is that the charges like policy fee and fund management have been raised and the fund allocation charges in the first two years have been brought down. The fund-switching also will cost in future policies as against free switching for 24 times in a year in respect of plans sold to you so far. This makes the old plans worth more than gold, therefore please ensure that you keep paying the premium without fail and also keep topping up with every rupee that you save only on the ULIPs you already hold. You are aware that there is no withdrawal restriction or charge on your presently held policies (in a few cases the withdrawal is possible after three years, so check your policy issue date). Its only you who will have the cake and eat it too. 
  So, rejoice and enjoy your most valuable investment asset to the hilt. If you neglect to take full advantage, you are only going to damage the cause of fund growth and tax saving and hassle free management of funds.
Wishing you all the best,
Krishnakumar Khandelwal

Fund Switching Advice as on 23 Aug 2010

Dear Policy Holders,
  Its time to take stock of situation in Indian equity markets and readjust out funds in different pockets. The Nifty as also other indices have seen good run up during the month of August '10. Although at this time in the year we should be getting readied to fully invest in equities as the period beginning after Ganesh Chaturthi or Dussera moves the markets up due to release of money in the hands of businesses along with profits, part of which finds way back in to govt coffers by the end of Financial Year. The floating surplus pushes up the demand for investible securities including equities. The insurance companies sell more policies in the six month of Oct-Mar. The ULIPs remain the most preferred option. All this augurs well for the markets but I am going to advice in a reverse way, due mainly to the disturbing factor of down moves in foreign markets on one hand and due to Indian markets being at three year high at this wrong point during the year which sees some downward pressure usually. Since some thing has not happened in an ordinary way, we have also to be slightly more cautious. I therefore advise you to do the following :
a) the aggressive should park entire fund value in Balance Managed Fund.
b) the moderates should get there funds into Defensive Fund.
c) the conservative should be opting for Stable Managed Fund only.
  As per the IRDA guidelines, newer products will be announced by HDFC SLIC as also other companies wef from 1 Sep 2010. After studying them, I will give you my assessment and tell you merits of the same.
Thanking you,

Krishna Kumar Khandelwal

ULIPs under regulation solely by IRDA

Dear Policyholders,
  The ULIP related controversy has ended with Govt of India issuing a notification regarding ULIPs that this product will remain under regulation solely by IRDA.You may recall that when the SEBI had tried to be spoilsport for the most successful product with Insurance Companies, I had given you the word of assurance that SEBI would not be successful in its attempt. In fact SEBI's move was in bad taste and it seemed to me that it was acting at the behest of some lobby but how can one surely say so. So, now when the ULIPs are not under cloud anymore, you should be making use of this wonderful product for your investment needs.
  I am happy to report the Growth Fund (Life) Unit's NAV has crossed 80 point mark on 21st June '10 . This is exactly 4 times the par value Rs 20 in Jan 04 when Nifty was at 2000 level. To have quadrupled the value in just 6 1/2 years is a remarkable feat. It translates in to return of almost 23% per year on compounded basis. Where else in the world such an achievement may have been made. This is superior to returns in any other asset class over the same period including Realty and Bullion.
  To further enhance your returns, I give fund switching advice from time to time which might have helped you. You may, however, master about the fund decision and my advice is no compulsion. You should be taking into account your own risk appetite and impressions about the possibilities before you resort to fund-switching. However, i am at your service at all times.
Krishna Kumar Khandelwal

Fund Switching Advice as on 17 Jun 2010

Dear Policyholders,
  I am happy to report at the time when we markets have steadily gone up for last seven days and Nifty closed at 5233. This is way up over the 4800 level when I had asked you to switch in to 'growth fund' entirely. There is now a possibility of RBI increasing the benchmark rates . The interest rate rise is a dampener for markets normally bur the advance tax instalments paid by corporates are higher this June compared to last year. This gives us some comfort and we need not go entirely out of the equity investment in rush. However, the occasional profit booking is never a bad idea. With this at the back of mind I give you the following advice:
a) the aggressive should now have 50% in 'growth fund' and 50% in 'defensive fund'.
b) the moderate should now switch into 'balanced fund entirely'.
c) the conservative may now come back to safety by switching in to 'defensive fund' entirely.
  I do hope that you have been enjoying the fund switching exercise as it surely has let you improve returns which no other asset class has given. Since this comes without costs and taxes, it is to be enjoyed more enthusiastically.
  I am sure that some of you have some points about which they are absolutely clear, I call upon those to contact me at my mobile nos. 09376168780 / 09724313034 or else contact khandelwal.kkinsurance@gmail.com 
Krishna Kumar Khandelwal

Fund Switching Advice as on 26 May 2010

Dear Policyholders,
  You may have wondered as to why I have not addressed you about fund switching while the markets have been in turmoil of late. The reason is that on one hand I do not attach much importance to Europe's troubles as far as Indian equity markets are concerned and on the other is the fact the funds managers of HDFC SLIC have been doing a great job of taking the value of 'growth units' high even in the kind of market that we see today.
  As a proof of what said about unit values, I may point out to you that 'growth fund (life products) unit NAV was Rs 68.17 on 6 Nov 2009 when the Nifty was at 4800 level and the NAV of the same is Rs. 72.91 on 25 May 2010 when Nifty closed at 4806. This shows the clear advantage of about 6% ie Rs 4.71 per unit.
  Since the Nifty is not at an attractive level and scope of further slide is limited, I am inclined to give the following advice about fund switching:
A) the aggressives should now switch into Growth Fund entirely.
B) the moderates also should now come into Growth Fund entirely.
C) the conservatives should now have their investment in Balance Fund entirely.
  Those who have Wealth Maximiser products should invest in Large Cap Fund Mid Cap Fund.
  I hope you have had very handsome rewards for choosing to opt for HDFC SLIC's ULIPs . Those who have investible funds in hand may buy more such policies before 30 Jun 2010 as there would be longer lock in period for withdrawal of funds. Pension Plan would have no provision of early encashment and would be converted to annuity, however, one third of the corpus would still come to you in cash upon maturity.
  Please feel free for asking for matters specific in your own case.
  Thanking you,
Krishna Kumar Khandelwal

Fund Switching Advice as on 19 Apr 2010

Dear Policyholder,
The Nifty has corrected lately and the result season is on. I would advise you to now do as under:
a) the aggressive may now switch in to 'growth fund' to the extent of 80% and rest in 'secured fund'.
b) the moderates should now switch into 'balanced fund' entirely.
c) the conservatives should switch into 'defensive fund' entirely.
Wish you good returns in F.Y. 2010-11.
Krishna Kumar Khandelwal

Fund Switching Advice as on 19 Mar 2010

Dear Policy Holders,

The time has come when I would like to address you about the fund switching. Since last advice, a lot of appreciation has taken place in the market. You may now do the following:

a) The aggressive investors should now come in to Secured Fund to the extent of 80% and into Growth Fund to the extent of 20%.

b) The moderate and the conservative policy holders should now be maintaining their entire fund in Defensive Fund.

The Nifty has closed above 5250 today and rewarded you handsomely. The next advice would be coming to you after the further developments have been observed and analysed.


Krishna Kumar Khandelwal

Fund Switching Advice as on 5 Feb 2010

Dear Policy Holders,

It was a day which was feared but it offers an opportunity to get invested in equities to a greater extent. You may now do the following in respect of your funds :

A) The aggressive may now switch entirely in to 'Growth Fund'.

B) The moderates may now switch into 'Balanced Fund'.

C) The conservative may remain in 'Defensive Fund'.

The Oct-Dec 09 has turned out some good, some not so good and some poor results, still the overall sales growth and profit growth have been healthy. The budget may throw up some unpleasant measures but not much of it and the indices have already corrected on this account. There is therefore a possibility of markets consolidating at this level of Nifty (4700) and move upwards.

With best wishes,

Krishnakumar Khandelwal

Fund Switching Advice as on 1 Jan 2010

Dear Policy Holders,

My last advice about switching to 100 per cent growth/equity fund when Nifty was 4550 , has delivered dream returns in a short term. The time has come to be slightly prudent for those who are aggressive. For those who are conservatives or moderates should be slightly more aggressive with their expectations of returns. I say this on account of very special times in the field of equity investments. A slight fear about equity investment in times of normal levels of prices is always there and this is what the aggressive should keep in mind. On the contrary, when the time has come when there is more than 50% possibility of big and broad upward moves in equity universe in not so distant future then it is the occasion to shed the overly cautious attitude and make a bigger opening in the investment edifice for the equity gains to flow in.

With above as back ground I recommend the following about the fund switching (the Nifty closed at 5201 on 31st Dec 09):

- the Aggressive should now switch 40% in to Secured Fund and 60% in to Growth fund.

-the Moderates should switch 60% in Secured Fund and 40% in Growth Fund.

-the Conservatives should be switching 80% in to Secured Fund and 20% in Growth Fund and raise the ratio of Growth fund by 5% every month.

Please stick to above till further advice. The change in environment will remain under my keen observation and the next advice would be promptly coming as soon as there is a need for switching for safety or for gains.

I welcome feedback and offer clarification readily, so you may interact with me at your pleasure.

Wishing you a very rewarding 2010 to all of you,

Krishna Kumar Khandelwal

Fund Switching Advice as on 3 Nov 2009

Dear Policy Holders,

I am addressing you once again about 'Fund Switch Advice' after 12 Sep 09.
Today has been a day of big fall on global cues. The Indian Inc has performed alright in the quarter ended Sep 09 and hence when the Nifty closed at around 4550, it is time that you exercise you switching option in the following manner:

- the aggressive investors should switch in to 'Growth Fund' entirely and patiently wait for further advice.

- the moderate investors should be switching in to 'Balance Fund' entirely.

- the conservative investors should be switching in to 'Defensive Fund' entirely.

You are aware that HDFCSLIC allows you to switch 24 times in a year, without charges. This is a great advantage, also no taxes are involved if you book profit under the exercise.

If any of you has any point to clarify, I am available at Mobile nos. +919724313034/++919376168780. My mail address is khandelwal.kkinsurance@gmail.com. Your queries are always welcome.

With best wishes,

Krishnakumar Khandelwal

P.S. You have a facility of topping up funds on your existing policy and your investment to the extent of 99% goes direct into investment in your desired fund. You must use this facility to the fullest extent. The withdrawals are permitted and hence your liquidity remains intact. Your topped up amount will qualify for rebate under section 80C.

If you have PPF account than please pay in minimum amount there to keep the account current. You should be aware that the fund grow faster in ULIPs you already have.

Some of you may have larger amounts to invest. You may write to me and I will suggest a ULIP meeting your precise requirements and at minimal cost.

Fund Switching Advice as on 12 Sep 2009

Dear Policy Holders,

You were addressed last 18 May 09 when the Nifty was at 4323. Since then almost four months have passed and the Nifty has advanced by about 500 points (about 12 pc up). The time has come when I share with you some concerns. I take it that funds in long term insurance plans should not be subjected to speculative risks but the aim should remain to keep out performing the other asset classes.

Of the policy holders, who are in their ripe years have to be more conservative, who are in middle years should be following the middle path and lastly, the young ones should be mostly keeping funds in 'growth fund' or 'equity fund' (this means that equity oriented funds should be preferred).

The present economic situation and the concerns of RBI governor about inflation indicate that the coming times may be seeing some contraction in money supply. This should prove to be slightly adverse for the share markets. In the long run, however, I do not perceive any big threat to markets. The prudent approach would be to switch funds as given below:

- the aggressive should switch in to 'balanced fund' entirely.

- the moderates should be switching in to 'defensive fund' entirely.

- the conservatives should be coming to safety of 'secured fund' entirely and switch 5 pc of the fund value in 'growth fund' in each of the coming calender month.

The ones who have any confusion may write to me or talk over phone.

As most of you may be having larger investable surplus on your hands, I invite you to discuss the matter and know as to how best and at minimal cost your future goal may be achieved. Please keep in mind that your savings have to be grown in a manner where there is safety and where are returns capable of beating inflation. If this is not ensured, you may encounter difficulties in your years after retirement. This is particularly important for the people who are going to live for long years after retirement. Since nobody can know one's life span, it is only the way to take some steps in time to ward off financial incapability in old and older age.

We are all lucky to now have host of plans to take care of our needs, even health and disease related needs, please give me an opportunity to discuss them with you in person.

HariOm,
Krishna Kumar Khandelwal