Investing: Paras Adenwala

In the midst of an economic slowdown, would gold serve as a good hedge? Considering gold is at Rs 28,000-level, is there any room for further gain? Should one seek exposure to it now? If yes, through which route?
Yes, these are challenging times. Gold has always been a good investment during such times. It has been the best asset to own since the financial crisis broke out in 2008. It is possible it may correct a bit, before the rally resumes. It would be worthwhile to wait for this correction. A gold exchange-traded fund (ETF) is the best medium to invest through.

I have been investing via systematic investment plan (SIP) for over a year (monthly Rs 15,000). I have been advised to switch 20-30 per cent of the investments into daily SIP to gain from the everyday volatility. Do you agree? If yes, is the proportion advised sufficient?
It is always a good idea to increase investment in equities during market corrections. However, instability in most global economies is expected to continue for most part of 2012. Hence, this corrective phase may continue for a while. It may, therefore, be advisable to continue with your current SIP.

Which sectors are likely to benefit from the depreciating rupee? Should I consider investing in these? What should be my strategy?
Sectors that are net exporters stand to benefit from a depreciating currency.

Hence, IT, pharmaceutical, gems & jewellery and so on should benefit. However, bulk of the exports is to the developed countries that are facing economic woes. Hence, benefits of a depreciating currency could be neutralised by possible reduction in volumes, going ahead. More, the valuations of these businesses are at a significant premium to the market. The best strategy would be to hold to your cash and wait for the markets to stabilise. Else, you could invest systematically in mutual funds for 15 months.

I have been investing in mutual funds for seven years for my daughter and have accumulated Rs 12 lakh. She will get married in 2013. I am worried the corpus will get eroded due to the market volatility. Should I withdraw? What should my exit strategy be?
Looking at the uncertain global and local environment, and also considering an important family occasion, it would be advisable to withdraw in two-three instalments by the end of this month.

The proceeds could be re-deployed in bank fixed deposits or debt mutual funds.

The writer is managing director & principal portfolio manager, Capital Portfolio Advisors. Views expressed are his own. Send your queries to yourmoney@bsmail.in