Don't stop SIP; gold good for asset allocation: Anand Rathi

Below is the edited transcript of his interview to CNBC-TV18.

Caller Q: Is it the right time to withdraw money from systematic investment plan (SIP)?

A: In terms of withdrawals, there are a lot of SIPs which are being discontinued with large AMCs. It is a reflection of how dissatisfied the customer would be when we have not made too much money over three-four years. One will get jittery saying that let me discontinue because it is not giving me the fruits which I envisaged when I got in.

One should not discontinue it. Like you said, you want some inflows and you want to redeem. Look at the fund. It has top three-four banks like HDFC, ICICI that form a part of the portfolio. You should wait out for a little more while till the month end.

There is some positive news which is expected. Since you have accumulated over three year period, you must be speaking about Rs 2,000 a month so you have something greater than Rs 50,000.

You can also explore one territory which has been unutilised. Try to create an overdraft on your SIPs. That is one of the best forms of dipping into your savings without tampering with goals. We always suggest a client when he has accumulated assets in the SIP format to take an overdraft from a bank which will almost be 50 percent of the market value.

Since it is an overdraft, when you put the money back in, you are not getting charged on the interest and then whenever you need the money you can utilise it and still not tamper with your goals.

That is a better method than trying to withdraw the accumulated money. In that phase, when you use that money if the market run up or especially you have taken a banking sector fund, you might miss out and lose out patience you have reflected over three years. So, that is my suggestion.

So, you can definitely explore and overdraft facility because these come at cheap prices. They secure against mutual fund units. If you have to redeem it then wait it out, till the month end you should be able to get better prices.

Caller Q: I want to invest Rs 1 lakh to Rs 2 lakh into gold. Is this the right time to do so?

A: One should be certain whether it is an asset allocation or it's more of a trading investment, standalone product. If you are investing as an asset allocation then you should consider investing at this stage.

But if it is more of understanding and trying to have a standalone product, you should wait out a little as there could be some appreciation on the rupee, which could be there in a month or two.

That will definitely bring down the MCX gold or the Indian gold prices because there is a very strong correlation between the rupee depreciation or appreciation vis-à-vis the gold price.

So, net-net if it is asset allocation game, I do not think you should wait. If it is less than 15 percent of your total assets, then you should go in and not wait it out.

If it is standalone investment or a trading which you are looking at, you should wait out till rupee settles down at lower level or rupee appreciates a little. There could be some appreciation on the rupee over couple of months to come.