ELSS is still your bet to make money from shares

For many people, the stock market reaching an all time high is not an event to cheer, but it is something to dread. They believe in the ancient theory that whatever goes up must come down. Sure, it holds truth for the stock market, too. But pulling out your investment from the market because it is at a record high or deciding against investing won’t be such a great idea. For example, here is what this new entrant to the stock market plans to do. He wants to stop his monthly investment in a tax planning scheme from a mutual fund. He has also decided against investing Rs 5,000 for funding the education of his five-year-old daughter. According to him, he wants to wait till the market reaches a ‘decent level’. Decent, for him, is sensex touching 12,000. Something that perhaps may not happen in the next decade, according to Dalal Street Pundits. Well, according to investment experts, tax planning schemes or ELSS (equity linked savings scheme) is the newcomer’s best bet to enter the stock market even at higher levels. They want him to continue with his investment. For those who come late, you can invest up to Rs 1 lakh in an ELSS to claim tax deduction under section 80C of the Income Tax Act. For the people looking to invest in the equity market, it is the best option available as it acts on the similar lines of equity diversified schemes, but for a small difference. ELSS has a lock-in period of three years, which give fund managers more freedom to make superior returns in the longer term. ELSS have performed well, giving an yearly return of 38.81%. Here is a look at some of the ELSS to invest with a long term prospect. Principal Personal Tax Saver, which has given highest oneyear return of 73%, looks good, but its has a very high risk element attached to it. On the other hand, schemes like Magnum Taxgain, Franklin India Taxshield, HDFC Taxsaver among others have been giving return from 30-45% with risk below average. And schemes with average risk and average return of 50% are Birla Sun Life Tax Relief '96 and Canequity-Tax Saver. Finally, depending on your risk taking appetite, pick a scheme of your choice.