tag:blogger.com,1999:blog-32550466503586001652024-03-06T06:13:41.815+05:30The Wealth ArchitectsWe Design Your Financial DestinySanjay Mataihttp://www.blogger.com/profile/09447447865916667523noreply@blogger.comBlogger879110tag:blogger.com,1999:blog-3255046650358600165.post-59970415007800753852023-09-21T13:47:00.000+05:302023-09-21T13:47:59.260+05:307 Key Tips For A Day Trader<p><i></i></p><div class="separator" style="clear: both; text-align: center;"><i><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhN59P0_Hy8pe-P02Vj-5JTZtDH4wVH4BWPOabbXtgInDOGSSzu5e1k2Nlv0aEfLFcsGxRum2a3CuRrE0GPM91vWH3XAXrjcQ4vH6XfP19wS5gHhkOoJ9V8SJEmtSN9DVKH7-RWn6ftAjjz8ofay6muvAKzGx2KBhfC93YIBCY2gIoLVRSzFYQ1JTuaTnQ/s1280/fear-of-losing-money-in-stocks.jpg" style="margin-left: 1em; margin-right: 1em;"><img alt="day-trading-tips" border="0" data-original-height="708" data-original-width="1280" height="280" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhN59P0_Hy8pe-P02Vj-5JTZtDH4wVH4BWPOabbXtgInDOGSSzu5e1k2Nlv0aEfLFcsGxRum2a3CuRrE0GPM91vWH3XAXrjcQ4vH6XfP19wS5gHhkOoJ9V8SJEmtSN9DVKH7-RWn6ftAjjz8ofay6muvAKzGx2KBhfC93YIBCY2gIoLVRSzFYQ1JTuaTnQ/w640-h354/fear-of-losing-money-in-stocks.jpg" title="Day Trading Tips" width="512" /></a></i></div><i><br /><b>Disclaimer</b>: Day trading is highly injurious to your financial health. This blog, therefore, strongly advocates AGAINST day trading. However, if someone simply can't resist the temptation, s/he must follow some important rules to minimze the damage.</i><br /><br /><br />Day trading is a thrilling yet challenging endeavor that requires a unique set of skills, discipline, and strategies. It involves buying and selling shares within the same trading day, aiming to profit from short-term price fluctuations.<br /><br />While the allure of quick profits can be enticing, day trading can also be risky and demanding.<br /><br />To navigate this fast-paced world successfully, day traders need a solid foundation of knowledge and a well-defined approach.<br /><br />In this article, we will discuss seven key tips that can help day traders succeed in the dynamic world of day trading.<br /><br /><b><span style="color: #cc0000;">1. Education and Research</span></b><br />The first and most crucial step for any aspiring day trader is to invest in education and thorough research. Day trading is not a get-rich-quick scheme; it's a skill that must be honed over time. Start by understanding the basics of the financial markets, including stocks, forex, and commodities. Learn about trading strategies, technical analysis, and fundamental analysis.<br /><br />Additionally, consider enrolling in trading courses or seminars led by experienced professionals. Many reputable online platforms offer comprehensive day trading courses that cover everything from market mechanics to risk management. Stay updated with financial news and market trends, as this knowledge will be instrumental in making informed trading decisions.<br /><br /><b><span style="color: #cc0000;">2. Develop a Trading Plan</span></b><br />Successful day traders do not approach the markets haphazardly; they have a well-thought-out trading plan. Your trading plan should outline your goals, risk tolerance, and strategies. It should also specify your entry and exit criteria, as well as the amount of capital you're willing to risk on each trade.<br /><br />Establishing a trading plan helps you stay disciplined and avoid impulsive decisions, which can lead to significant losses. It's essential to stick to your plan, even in the face of emotional turbulence that often accompanies trading.<br /><br /><b><span style="color: #cc0000;">3. Risk Management</span></b><br />Day trading involves inherent risks, and protecting your capital should be a top priority. Risk management is the key to longevity in day trading. One commonly recommended rule is the "1% rule," which advises risking no more than 1% of your trading capital on a single trade. This rule helps protect your capital from substantial losses and ensures you have enough funds to continue trading.<br /><br />Another aspect of risk management is setting stop-loss orders. These are predetermined points at which you will sell a position if the trade goes against you. Stop-loss orders are crucial for limiting potential losses and preventing a small setback from turning into a disaster.<br /><br /><b><span style="color: #cc0000;">4. Choose the Right Broker</span></b><br />Selecting the right brokerage platform is vital for day traders. Look for a broker that offers competitive commissions, a reliable trading platform, and excellent customer support. The trading platform should be user-friendly and equipped with essential tools like real-time market data, technical analysis charts, and order execution capabilities.<br /><br />Additionally, consider the broker's access to various financial markets, as day traders often diversify their portfolios across different assets to spread risk. Ensure that the broker you choose aligns with your trading goals and strategies.<br /><br /><b><span style="color: #cc0000;">5. Practice with a Demo Account</span></b><br />Before risking real capital, practice your day trading strategies with a demo account. Most reputable brokers offer demo accounts that allow you to trade with virtual money, simulating real market conditions. This practice helps you familiarize yourself with the trading platform and test your strategies without incurring losses.<br /><br />Start with a demo account to gain confidence and fine-tune your trading techniques. Keep in mind that success in a demo environment doesn't guarantee success in the live market, but it's a crucial step in your preparation.<br /><br /><b><span style="color: #cc0000;">6. Embrace Continuous Learning</span></b><br />The financial markets are dynamic, and what worked yesterday may not work tomorrow. Therefore, successful day traders must embrace continuous learning and adaptation. Stay open to new strategies and technologies that can improve your trading performance.<br /><br />Attend webinars, read books, and follow experienced traders on social media or trading forums to stay informed about the latest developments in day trading. Consider keeping a trading journal to record your trades and analyze your performance regularly. This practice can help you identify patterns, strengths, and weaknesses in your strategy.<br /><br /><b><span style="color: #cc0000;">7. Manage Emotions</span></b><br />Emotions can be the downfall of many day traders. The volatility and pressure of day trading can lead to impulsive decisions driven by fear or greed. To be a successful day trader, you must learn to manage your emotions effectively.<br /><br />One way to do this is by setting clear trading rules and sticking to them. Avoid chasing the market or trying to make up for losses with larger bets. Instead, take breaks when needed and practice relaxation techniques to stay focused and calm during trading hours.<br /><br /><b>Conclusion</b><br />Day trading offers the potential for significant financial rewards, but it comes with substantial risks. To succeed in this demanding field, day traders must prioritize education, discipline, and risk management. By developing a solid trading plan, continuously improving your skills, and staying emotionally resilient, you can increase your chances of thriving as a day trader.<br /><br />Remember that success in day trading takes time, dedication, and a commitment to learning from both successes and failures.<br /><br /><p></p>Sanjay Mataihttp://www.blogger.com/profile/09447447865916667523noreply@blogger.comtag:blogger.com,1999:blog-3255046650358600165.post-70104254040639925652023-09-07T10:22:00.000+05:302023-09-07T10:22:15.844+05:30How Many Funds Make an Ideal Portfolio?<p> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjsdJWfTUl6lzKHxCdngg8VZzcuSQKr3sest0I34u_VqECUqPDNP2KMipXs_Peezqmmn7s1EPympwewP7ddaR537jHIfMnsMBLqw_4i5JBryWbqXbiPZMEOF4IYf81AgUReSUPpNgAek_vXXE5eC77mbhH8TooJnKv5Fkeel2JYIn9B-tX_4AW_60ArI3g/s1280/health-insurance-importance.jpg" style="margin-left: 1em; margin-right: 1em;"><img alt="ideal-mutual-fund-portfolio" border="0" data-original-height="853" data-original-width="1280" height="340" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjsdJWfTUl6lzKHxCdngg8VZzcuSQKr3sest0I34u_VqECUqPDNP2KMipXs_Peezqmmn7s1EPympwewP7ddaR537jHIfMnsMBLqw_4i5JBryWbqXbiPZMEOF4IYf81AgUReSUPpNgAek_vXXE5eC77mbhH8TooJnKv5Fkeel2JYIn9B-tX_4AW_60ArI3g/w640-h426/health-insurance-importance.jpg" title="Ideal Mutual Fund Portfolio" width="512" /></a></div><p></p><p><span style="font-family: inherit;"><span><br /><b>Introduction<br /></b></span><span>Building a well-diversified investment portfolio is crucial for long-term financial success.<br /></span><span><br />One common question that investors often ask is how many funds they should include in their portfolio.<br /></span><span><br />While there is no one-size-fits-all answer, this article aims to explore the factors to consider when determining the ideal number of funds for an investment portfolio.<br /></span><span><br /><b>Understanding Diversification<br /></b></span><span>Diversification is a risk management strategy that involves spreading investments across different asset classes, sectors, and geographical regions. The primary goal is to reduce exposure to any single investment and minimize the potential impact of market volatility.<br /></span><span><br />When constructing a diversified portfolio, investors should typically select funds that offer exposure to different types of assets, such as stocks, bonds, real estate, and commodities.<br /></span><span><br /><b>Factors to Consider</b><br /></span><span><b><span style="color: #990000;">1. Investment Goals:</span></b> The number of funds in a portfolio should align with your investment goals. For example, a long-term investor focused on wealth accumulation may choose a larger number of funds to capture diverse growth opportunities. On the other hand, a conservative investor with capital preservation as the main objective might opt for a smaller number of funds with lower risk profiles.<br /></span><span><br /><span style="color: #990000;"><b>2. Risk Tolerance:</b></span> Your tolerance for risk plays a significant role in determining the number of funds in your portfolio. Aggressive investors willing to take on higher risk may have a larger number of funds, including those with exposure to emerging markets or small-cap stocks. Conversely, conservative investors may prefer a more limited number of funds, with a focus on stable and established companies.<br /></span><span><br /><b><span style="color: #990000;">3. Time and Effort:</span></b> Managing a portfolio can require time and effort. Consider how much time you can dedicate to researching, monitoring, and rebalancing your investments. If you have limited time or lack the necessary expertise, a smaller number of funds or index/exchange-traded funds (ETF) might be more suitable.<br /></span><span><br /><b><span style="color: #990000;">4. Fund Overlap:</span></b> It is essential to evaluate the overlap between funds in your portfolio. Investing in multiple funds that hold similar securities may lead to overexposure and defeat the purpose of diversification. Analyze the underlying holdings and asset allocations of each fund to ensure they complement one another.<br /></span><span><br /><b><span style="color: #990000;">5. Cost Considerations:</span></b> Each fund comes with expenses, including management fees and other administrative costs. As the number of funds increases, so does the overall cost of managing the portfolio. It is important to weigh the benefits of diversification against the associated expenses to ensure they align with your investment strategy.<br /></span><span><br /><b>Finding the Balance</b><br /></span><span>Achieving the right balance in portfolio diversification is key. It is often recommended to strike a balance between the benefits of diversification and the complexity of managing multiple funds. Here are some approaches to consider:<br /></span><span><br /><b><span style="color: #990000;">a. Core-Satellite Approach:</span></b> This strategy involves a core portfolio of broad-based funds that provide exposure to major asset classes, complemented by satellite funds that focus on specific sectors or investment themes. The core funds provide stability and long-term growth potential, while satellite funds offer additional diversification and the potential for higher returns.<br /></span><span><br /><span style="color: #990000;"><b>b. Passive Funds:</b></span> Investing in index funds and/or ETFs can simplify the process. These funds pool money from multiple investors and invest so as to mimic the underlying index e.g. Nifty 50, Sensex 30, Nifty Next 50 etc. Since they track the index they don't need active fund management, thereby saving you the time and effort of selecting and monitoring actively-managed funds.<br /></span><span><br /><b><span style="color: #990000;">c. Hybrid Funds:</span></b> Another option is investing in asset allocation funds, also known as hybrid funds. These funds invest in a given mix of equity, debt and gold and automatically adjust their asset allocation from time to time based market performance. They provide a one-stop solution for diversification, as they invest in a mix of different asset classes.<br /></span><span><br /><b>Conclusion</b><br /></span></span><span><span style="font-family: inherit;">While, there is no definitive answer to how many funds make an ideal portfolio, following the aforesaid approach, you can create an portfolio that is 'ideal' for you that can help you comfortably achieve your financial goals.<br /></span><br /></span></p>Sanjay Mataihttp://www.blogger.com/profile/09447447865916667523noreply@blogger.comtag:blogger.com,1999:blog-3255046650358600165.post-67178187175990011652023-05-22T12:27:00.000+05:302023-05-22T12:27:13.881+05:30A Short n Quick Guide on Withdrawal of Rs.2000 Banknotes<p><span style="font-family: arial;"></span></p><div class="separator" style="clear: both; text-align: center;"><span style="font-family: arial;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLK_cQ8SCqSo5znAfCAASAbhFdRt0h6CN42Ib_r4XeaGVqG__jvkhpgyaNSy9S4oHzjF2yEeAbmqWTJhRsZiK6w7U6DAquK5X6WUyOm-I_Yb1u9xEDCocCiBGtJ-Zl_rJ0wEYNJyv5xWi-wydEDYuj60e6qysrJ8xJHgu5wWUx1EFMi57ehhfhZYrf/s640/rs.2000-note-front.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="rs-2000-currency-note" border="0" data-original-height="339" data-original-width="640" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLK_cQ8SCqSo5znAfCAASAbhFdRt0h6CN42Ib_r4XeaGVqG__jvkhpgyaNSy9S4oHzjF2yEeAbmqWTJhRsZiK6w7U6DAquK5X6WUyOm-I_Yb1u9xEDCocCiBGtJ-Zl_rJ0wEYNJyv5xWi-wydEDYuj60e6qysrJ8xJHgu5wWUx1EFMi57ehhfhZYrf/w400-h213/rs.2000-note-front.jpg" title="Rs.2000 Currency Note" width="400" /></a></span></div><span style="font-family: arial;"><br />In a surprising move, the Reserve Bank of India (RBI) has recently announced the <a href="https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=55707" target="_blank">withdrawal of Rs.2000 banknotes from circulation</a>.<br /></span><span style="font-family: arial;"><br />This has left many people wondering about the appropriate course of action, if they possess these currency notes.<br /></span><span style="font-family: arial;"><br />So here's a short and quick guide on what you should do if you currently hold Rs.2000 banknotes, to ensure a smooth transition and minimal inconvenience.<br /></span><span style="font-family: arial;"><br />1. The banknotes of Rs.2000 denomination continue to be legal tender. So you can still use them for day-to-day transactions.<br /></span><span style="font-family: arial;"><br />2. RBI has stipulated September 30, 2023 as the deadline, by which date you must deposit / exchange these banknotes. So there's no need urgency and hence you need not panic.<br /></span><span style="font-family: arial;"><br />3. You can either deposit the Rs.2000 banknotes into your bank accounts and/or exchange them for banknotes of other denominations.<br /></span><span style="font-family: arial;"><br />4. The process of deposit / exchange begins from May 23, 2023.<br /></span><span style="font-family: arial;"><br />5. The facility to exchange is available at any bank branch, even if you don't have your account in that particular branch.<br /></span><span style="font-family: arial;"><br />6. There is no limit on the amount of Rs.2000 banknotes that you can deposit in your account (in complaince with the KYC norms and other statutory requirements, if any).<br /></span><span style="font-family: arial;"><br />7. However, if you wish to exchange them for other denominations, there is a limit of Rs.20,000 i.e. 10 notes at a time. But you can rejoin the queue, if have more than 10 notes to exchange. (For exchange through Banking Correspondents, the limit is 2 notes i.e. Rs.4000 per day.)<br /></span><span style="font-family: arial;"><br />8. The exchange is free of cost and no fee is payable by you.<br /></span><span style="font-family: arial;"><br />9. Nor do you have to fill up any slip, or provide any identification like Aadhaar etc. for exchanging the Rs.2000 banknotes.<br /></span><span style="font-family: arial;"><br />10. The fate of undeposited or unexchanged Rs.2000 banknotes after Sept 30th is not yet known. So far RBI has not clarified this point.<br /><br /></span><p></p>Sanjay Mataihttp://www.blogger.com/profile/09447447865916667523noreply@blogger.comtag:blogger.com,1999:blog-3255046650358600165.post-47148478666412415232023-05-19T11:40:00.000+05:302023-05-19T11:40:25.348+05:307 Must-Read Books on Personal Finance and Investments<p><span style="font-family: arial;"></span></p><div class="separator" style="clear: both; text-align: center;"><span style="font-family: arial;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7XnsUQp8_85EVanGpzQtY6pCzUq5ztqEktDNRorSvM7VYKXRZ00u_yrugff7qPUw7_w_n-3FmkrGvCYDh9ba8ArHdJOM3rOgrz1nmLW0fGPiJAMMlUGcPT06SG_D51nsW_o8zdu-GD1NotjQhsTz1D-yrJw4iKn3v8uyd2bJKdIh_twPgJxyzta68/s1280/financial-literate.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="7-must-read-books-on-personal-finance" border="0" data-original-height="959" data-original-width="1280" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7XnsUQp8_85EVanGpzQtY6pCzUq5ztqEktDNRorSvM7VYKXRZ00u_yrugff7qPUw7_w_n-3FmkrGvCYDh9ba8ArHdJOM3rOgrz1nmLW0fGPiJAMMlUGcPT06SG_D51nsW_o8zdu-GD1NotjQhsTz1D-yrJw4iKn3v8uyd2bJKdIh_twPgJxyzta68/w400-h300/financial-literate.jpg" title="7 Must-Read Books on Personal Finance" width="400" /></a></span></div><span style="font-family: arial;"><br />Personal finance and investments are universal topics that affect individuals worldwide, regardless of their geographical location.<br /></span><span style="font-family: arial;"><br />By combining insights from different perspectives, we can gain a well-rounded understanding of managing our finances in an increasingly globalized world.<br /></span><span style="font-family: arial;"><br />So, let's embark on this enlightening journey and discover valuable wisdom from both sides of the globe!<br /></span><span style="font-family: arial;"><br /><b>1. "<a href="<a target="_blank" href="https://www.amazon.in/Intelligent-Investor-English-Paperback-2013/dp/0062312685/ref=sr_1_3?crid=3E9Y8D0L9KMKM&amp;keywords=the+intelligent+investor+by+benjamin+graham&amp;qid=1684474578&amp;sprefix=the+int%252Caps%252C667&amp;sr=8-3&_encoding=UTF8&tag=wealth0dd-21&linkCode=ur2&linkId=6e435c48201484ccbb7eecc823f0b7ca&camp=3638&creative=24630">The Intelligent Investor</a>" target="_blank">The Intelligent Investor</a>" by Benjamin Graham</b><br /></span><span style="font-family: arial;">No list on personal finance and investments would be complete without Benjamin Graham's timeless classic, "The Intelligent Investor." This book, revered by investors worldwide, emphasizes the importance of value investing and understanding market behavior. Graham's insights on stock selection, risk management, and the concept of a margin of safety remain as relevant today as they were when the book was first published in 1949.<br /></span><span style="font-family: arial;"><br /><b>2. "<a href="<a target="_blank" href="https://www.amazon.in/Rich-Dad-Poor-Middle-Anniversary/dp/1612681131/ref=sr_1_3?crid=15JXSWSDWIRC1&amp;keywords=rich+dad+poor+dad&amp;qid=1684474835&amp;sprefix=rich+dad%252Caps%252C464&amp;sr=8-3&_encoding=UTF8&tag=wealth0dd-21&linkCode=ur2&linkId=c53476f73dd706cbeef8c2c039b4a454&camp=3638&creative=24630">Rich Dad Poor Dad</a>" target="_blank">Rich Dad Poor Dad</a>" by Robert T. Kiyosaki</b><br /></span><span style="font-family: arial;">Robert T. Kiyosaki's "Rich Dad Poor Dad" has captivated readers globally with its unique approach to financial education. Drawing from his own experiences, Kiyosaki shares valuable lessons about financial independence and building wealth. By highlighting the difference between his "rich dad" and "poor dad's" mindsets, Kiyosaki challenges conventional notions of money and encourages readers to embrace entrepreneurship and investment as paths to financial success.<br /></span><span style="font-family: arial;"><br /><b>3. "<a href="<a target="_blank" href="https://www.amazon.in/Psychology-Money-Morgan-Housel/dp/9390166268/ref=sr_1_3?crid=2N8MF8G1ZIS48&amp;keywords=the+psychology+of+money&amp;qid=1684474905&amp;sprefix=The+Psychology+of+Money%252Caps%252C611&amp;sr=8-3&_encoding=UTF8&tag=wealth0dd-21&linkCode=ur2&linkId=825c44479823d13d57a8d7602124057e&camp=3638&creative=24630">The Psychology of Money</a>" target="_blank">The Psychology of Money</a>" by Morgan Housel</b><br /></span><span style="font-family: arial;">Moving beyond the technical aspects of finance, "The Psychology of Money" by Morgan Housel delves into the behavioral and psychological aspects that influence our financial decisions. With engaging anecdotes and thought-provoking insights, Housel explores the role of human emotions, biases, and social pressures in our relationship with money. This book offers a refreshing perspective on personal finance and helps readers develop a healthier mindset towards wealth and investments.<br /></span><span style="font-family: arial;"><br /><b>4. "<a href="<a target="_blank" href="https://www.amazon.in/Little-Book-Common-Sense-Investing/dp/1119404509/ref=sr_1_3?crid=2Z81ZF63ITTD3&amp;keywords=The+Little+Book+of+Common+Sense+Investing&amp;qid=1684474986&amp;sprefix=the+little+book+of+common+sense+investing%252Caps%252C516&amp;sr=8-3&_encoding=UTF8&tag=wealth0dd-21&linkCode=ur2&linkId=503625e9d2c5d62422c62c342d0cd646&camp=3638&creative=24630">The Little Book of Common Sense Investing</a>" target="_blank">The Little Book of Common Sense Investing</a>" by John C. Bogle</b><br /></span><span style="font-family: arial;">John C. Bogle, the founder of Vanguard Group, presents a compelling case for passive investing in "The Little Book of Common Sense Investing." Bogle advocates for low-cost index funds as a reliable investment strategy for long-term wealth accumulation. By focusing on the simplicity of index investing and avoiding the pitfalls of active management, Bogle empowers readers to make informed decisions and achieve steady returns over time.<br /></span><span style="font-family: arial;"><br /><b>5. "<a href="<a target="_blank" href="https://www.amazon.in/Millionaire-Next-Door-Surprising-Anniversary/dp/9387496465/ref=sr_1_3?crid=2ODAICFSGOP7W&amp;keywords=the+millionaire+next+door&amp;qid=1684475054&amp;sprefix=The+Millionaire+Next+Door%252Caps%252C589&amp;sr=8-3&_encoding=UTF8&tag=wealth0dd-21&linkCode=ur2&linkId=011772fbc4f148d8363a55fd8fa9209d&camp=3638&creative=24630">The Millionaire Next Door</a>" target="_blank">The Millionaire Next Door</a>" by Thomas J. Stanley and William D. Danko</b><br /></span><span style="font-family: arial;">"The Millionaire Next Door" by Thomas J. Stanley and William D. Danko challenges preconceived notions of wealth and reveals surprising insights about self-made millionaires. The authors conducted extensive research to uncover common traits and habits among affluent individuals who quietly amassed wealth over time. This eye-opening book encourages readers to adopt a frugal lifestyle, prioritize savings, and make conscious decisions to build long-lasting financial security.<br /></span><span style="font-family: arial;"><br /><b>6. "<a href="<a target="_blank" href="https://www.amazon.in/Think-Grow-Rich-21st-CENTURY/dp/9389931525/ref=sr_1_3?crid=2JAOBVHOC4BD&amp;keywords=think+and+grow+rich&amp;qid=1684475122&amp;sprefix=Think+and+Grow+Rich%252Caps%252C519&amp;sr=8-3&_encoding=UTF8&tag=wealth0dd-21&linkCode=ur2&linkId=ba921d162e65a0d02b06133df947ee96&camp=3638&creative=24630">Think and Grow Rich</a>" target="_blank">Think and Grow Rich</a>" by Napoleon Hill</b><br /></span><span style="font-family: arial;">Originally published in 1937, "Think and Grow Rich" by Napoleon Hill remains a classic in the realm of personal development and wealth creation. Hill interviewed numerous successful individuals of his time, including Andrew Carnegie and Thomas Edison, to distill their wisdom into a practical guide for achieving financial abundance. By emphasizing the power of positive thinking, goal setting, and persistence, Hill inspires readers to unleash their potential and attract prosperity.<br /></span><span style="font-family: arial;"><br /><b>7. "<a href="<a target="_blank" href="https://www.amazon.in/Richest-Engineer-Abhishek-Kumar/dp/9381506876/ref=sr_1_1?crid=1VUG1WBWHU5RV&amp;keywords=the+richest+engineer+by+abhishek+kumar&amp;qid=1684475192&amp;sprefix=The+Richest+Engineer%2522%252Caps%252C603&amp;sr=8-1&_encoding=UTF8&tag=wealth0dd-21&linkCode=ur2&linkId=ed47ae453619d27174fb589a4245402b&camp=3638&creative=24630">The Richest Engineer"</a>" target="_blank">The Richest Engineer</a>" by Abhishek Kumar</b><br /></span><span style="font-family: arial;">Bringing an Indian perspective to personal finance, "The Richest Engineer" by Abhishek Kumar provides valuable insights for individuals looking to optimize their financial journey. Kumar, an engineer-turned-entrepreneur, shares practical strategies and principles to create a robust financial foundation.<br /></span><span style="font-family: arial;"><br />As Benjamin Franklin once quoted, “<i>An investment in knowledge pays the best interest.</i>”<br /></span><span style="font-family: arial;"><br />So, before you invest your hard-money in buying assets, spend a fraction of your money in buying the time-tested knowledge and wisdom.<br /></span><span style="font-family: arial;"><br />With almost an infinte 'return on investment', it would be the best investment you would ever make.<br /><br /></span><br /><p></p>Sanjay Mataihttp://www.blogger.com/profile/09447447865916667523noreply@blogger.comtag:blogger.com,1999:blog-3255046650358600165.post-62638462716849403652023-04-20T13:45:00.000+05:302023-04-20T13:45:58.750+05:30Do Debt MFs Still Score Over Bank FDs? Check out.<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiydBEqdWzwS9oAhi9C5SjpCrDPvtGgMTTCB-RB7hLzKTlwXQAucaRLr0fnyPN2105mQh_P2cWIqzlZ5FNFG7NRQeoWWoIAPKaECD2SKiITbVMAlpOwRkc6jWCA72YWBG-YNJi-_lohHtxXKvieIZN-u6kEplhv-rpozThVIe_Tbh1f0_Q7Zvz9MFOr/s1280/debt-fund-or-fixed-deposit.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="debt-mf-vs-bank-fd" border="0" data-original-height="678" data-original-width="1280" height="341" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiydBEqdWzwS9oAhi9C5SjpCrDPvtGgMTTCB-RB7hLzKTlwXQAucaRLr0fnyPN2105mQh_P2cWIqzlZ5FNFG7NRQeoWWoIAPKaECD2SKiITbVMAlpOwRkc6jWCA72YWBG-YNJi-_lohHtxXKvieIZN-u6kEplhv-rpozThVIe_Tbh1f0_Q7Zvz9MFOr/w640-h341/debt-fund-or-fixed-deposit.png" title="Debt MF vs Bank FD" width="640" /></a></div><br /><span style="font-family: arial;">Interest on Bank Fixed Deposits is taxable as per one's income tax slab rate.<br /></span><span style="font-family: arial;"><br />Vis-a-vis this, till Mar 31, 2023 the <u>long term capital gains</u> (holding period more than 3 years) on Debt Mutual Funds was taxed @20% with indexation benefit.<br /></span><span style="font-family: arial;"><br />[<i>Note: Like Banks FDs, the <u>short term capital gains</u> (holding period upto 3 years) on Debt MFs was taxable as per one's income tax slab rate.</i>]<br /></span><span style="font-family: arial;"><br />Therefore, there was massive tax advantage when a person in the higher tax brackets invested in Debt MFs as compared to the Bank FDs, and held it for more than 3 years.<br /></span><span style="font-family: arial;"><br />Sadly, w.e.f. April 1, 2023, this huge tax benefit on Debt MFs is gone. Now, like Banks FDs, the capital gains (irrespective of the holding period) would be taxed as per one's income tax slab rate.<br /></span><span style="font-family: arial;"><br />This is a big blow for the Debt Funds.<br /></span><span style="font-family: arial;"><br />However, even if Bank FDs and Debt MFs are now at par as far as the taxation is concerned, Debt MFs continue to score over Banks FDs on many other counts.<br /></span><span style="font-family: arial;"><br />Therefore, it would still be advantageous to invest in Debt MFs as compared to the Bank FDs.<br /></span><span style="font-family: arial;"><br />Let's explore:<br /></span><span style="font-family: arial;"><br /><b>1. Deferred Tax Liability</b><br /></span><span style="font-family: arial;">In case of Bank FDs, the tax is payable every year on the interest accrued. So, assuming you do a 5-year fixed deposit with cumulative option, you will have to pay tax on the interest earned every year; even though you will get the interest only after 5 years at the time of maturity.<br /></span><span style="font-family: arial;"><br />However, in case of Debt Funds, you have to pay tax only when you redeem your investment. So, assuming you opt for the Growth Option and don't make any withdrawals for say 10 years, you have to pay no tax for these 10 years; even though the value of your investment is going up every year.<br /></span><span style="font-family: arial;"><br /><b>2. No loss on early encashment</b><br /></span><span style="font-family: arial;">Suppose you do a 5-year FD. But for some reason you have to withdraw the money after only say 6 months. Then, your interest income will be calculated on the 6-monthly rate of interest and not the contracted 5-year rate of interest. Since short-tenure rates are typically 1-3% lower than long-tenure rates, you will end up earning much lower income on premature encashment of a Bank FD.<br /></span><span style="font-family: arial;"><br />With Debt Funds, this is not the case. Whatever increase has happened in the NAV, you will get the same WITHOUT ANY REDUCTION. So, with Debt Funds, you have the flexibility to withdraw your money any time, without worrying about any loss in your interest earnings.<br /></span><span style="font-family: arial;"><br /><b>3. No penalty on early encashment</b><br /></span><span style="font-family: arial;">Normally, banks levy a 0.5-1% penalty — over and above the reduction in the applicable rate of interest discussed in point 2 above — in case you encash your Bank FD before maturity.<br /></span><span style="font-family: arial;"><br />Most Debt Funds do not charge any such penalty (known as exit load in MF terminology) on early encashment. Some Debt Funds do have an exit load. But this too is applicable for a limited period only (ranging from 1 week to 6 months/1 year). So, typically, if you have chosen your funds judiciously, you can withdraw your money WITHOUT ANY DEDUCTION.<br /></span><span style="font-family: arial;"><br /><b>4. Ease of partial withdrawal</b><br /></span><span style="font-family: arial;">Bank FDs generally do not have the option of part withdrawal. So even if your requirement is less, you have break the entire FD. Consquently, you lose a lot with a Bank FD.<br /></span><span style="font-family: arial;"><br />There is no such problem with the Debt MFs. You can redeem part no. of units (without any loss of interest or penalty) and the balance units continue to remain invested (and keep growing).<br /></span><span style="font-family: arial;"><br /><b>5. Opportunity to claim set-off</b><br /></span><span style="font-family: arial;">Interest earned on Bank FDs is treated as Income from Other Sources. It gets added to your total income and taxed accordingly.<br /></span><span style="font-family: arial;"><br />Income from Debt MFs is treated as capital gains. This gives you an opportunity to claim a set-off in case you have made a capital loss elsewhere say in some equity share. Thus, with Debt MFs, you have the the option to bring down your tax liability to the extent you have any loss to set-off.<br /></span><span style="font-family: arial;"><br /><br />In short, despite the setback of losing the indexation benefit, many other advantages of investing in Debt MFs continue to give them an edge over the Bank FDs.<br /><br /></span><p></p>Sanjay Mataihttp://www.blogger.com/profile/09447447865916667523noreply@blogger.comtag:blogger.com,1999:blog-3255046650358600165.post-62865946034229108682023-04-05T17:19:00.002+05:302023-04-08T13:48:17.957+05:30PO Small Savings Schemes Apr-Jun'23 Interest Rates<span style="font-family: arial;"><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh66s9MZk7Mq8czLYq31FXHs79vH2bv03bpzZmcP5U-bQwKWFGUpY5IpgLYSHCObH-gNW4V_qLK-f_uVw2lxgu4IxlrJlQRfN_9DMYhNQiSM6z-0iFA-dugBNyHOEW_jPY4Y1yuqH1VQpqA7HK1VPCYQneqNp26ei2S4umtmj32bwWHuthHRSWHv4aW/s275/small-savings-schemes.png" style="margin-left: auto; margin-right: auto;"><img alt="post-office-small-savings-schemes" border="0" data-original-height="183" data-original-width="275" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh66s9MZk7Mq8czLYq31FXHs79vH2bv03bpzZmcP5U-bQwKWFGUpY5IpgLYSHCObH-gNW4V_qLK-f_uVw2lxgu4IxlrJlQRfN_9DMYhNQiSM6z-0iFA-dugBNyHOEW_jPY4Y1yuqH1VQpqA7HK1VPCYQneqNp26ei2S4umtmj32bwWHuthHRSWHv4aW/w400-h266/small-savings-schemes.png" title="Post Office Small Savings Scheme" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"></td></tr></tbody></table><br />The Department of Economic Affairs, Ministry of Finance has announced the revised interest rates on the Post Office Small Savings Schemes for the first quarter of the Financial Year 2023-24.<br /><br />Thankfully, there is a sharp increase in the rates of most the schemes. The only disappointment is the PPF — a very popular investment among Indians — where the rate remains unchanged.<br /><br />This will definitely bring smiles to the investors in Small Savings Schemes, They have been suffering a steep increase in their monthly household budgets on account of inflation; besides the massive jump in the home loan EMIs due to rising interest rates on loans.<br /><br />The decision to raise the interest rates was notified vide <a href="https://dea.gov.in/sites/default/files/RoI_Q12023-24_0.pdf" target="_blank">Office Memorandum F.No.1/4/2019-NS dated March 31, 202</a>3 on the subject 'Revision of interest rates for Small Savings Schemes'.<br /><br />(By now you would surely be aware that, as per the present policy, interest rates on Small Savings Schemes are reset periodically on a quarterly basis.)<br /><br />Accordingly, the interest rates on various Post Office Small Savings Schemes for the first quarter of the Financial Year 2023-24 — i.e. Apr 1st to Jun 30th, 2023 — are detailed below:<br /><br /><b>Public Provident Fund (PPF)</b>: Unchanged at 7.1% p.a. [compounded annually]<br /><br /><b>5-year National Saving Certificate (NSC)</b>: Up from 7.0% to 7.7% p.a. [compounded annually]</span><span style="font-family: arial;"><br /><br /><b>Monthly Income Scheme</b>: Up from 7.1% to 7.4% p.a. [monthly compounding and paid out]<br /><br /><b>Senior Citizens Savings Scheme</b>: Up from 8.0% to 8.2% p.a. [quarterly compounding and paid out]<br /><br /><b>Time Deposits</b><br /><u>1-year Deposit</u>: Up from 6.6% p.a. to 6.8% p.a.<br /><u>2-year Deposit</u>: Up from 6.8% p.a. to 6.9% p.a.<br /><u>3-year Deposit</u>: Up from 6.9% p.a. to 7.0% p.a.<br /><u>5-year Deposit</u>: Up from 7.0% p.a. to 7.5% p.a.<br /><i>(All on quarterly compounding basis)</i><br /><br /><b>5-year Recurring Deposit</b>: Up from 5.8% p.a. to 6.2% [compounded quarterly]<br /><br /><b>Kisan Vikas Patra</b>: Up from 7.2% p.a. to 7.5% p.a. [compounded annually]<br />(The scheme will now double your money in 9 years 7 months, as against 10 years earlier)<br /><br /><b>Sukanya Samriddhi Scheme</b>: Up from 7.6% p.a. to 8.0% [compounded annually]<br /><br /><b>Savings Deposit</b>: No change at 4% p.a. [compounded annually]<br /><br /><br /><i><b><span style="color: #cc0000;">Note</span></b></i>:<br /><i>1. The revised interest rates apply only to the "new accounts" opened during the respective period (except PPF and Sukanya Samriddhi Scheme, where the new rate is applied on the outstanding account balance).<br /><br />2. For the existing accounts under all other schemes, the contracted interest rate remains unchanged until maturity.
</i><br /><br /></span>Sanjay Mataihttp://www.blogger.com/profile/09447447865916667523noreply@blogger.comtag:blogger.com,1999:blog-3255046650358600165.post-84384320328509969362022-12-02T12:44:00.001+05:302022-12-05T12:52:34.925+05:30How To Invest In The Indian Stock Market From The US<p><span style="font-family: arial;"></span></p><div class="separator" style="clear: both; text-align: center;"><span style="font-family: arial;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXpFjVI78TbMCMRFRzRqXuk2BtvwkBWQcEwZ2UEJRORazW6GXd3bHxYQ9A0wqQ9c37AAvoIKY08dtqSBlZVZFIiYTcLtz6XICXc5Y2l04D_IarfhkK4FdbX8WaP8K4A3K6T6efccE0YlUBv3fBTfCs0esjK0Qd2xOhZcGxTdPrELUOrIXfuI7mQXN1/s769/invest-in-india-from-us.png" style="margin-left: 1em; margin-right: 1em;"><img alt="invest-in-indian-stock-market-from-us" border="0" data-original-height="500" data-original-width="769" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXpFjVI78TbMCMRFRzRqXuk2BtvwkBWQcEwZ2UEJRORazW6GXd3bHxYQ9A0wqQ9c37AAvoIKY08dtqSBlZVZFIiYTcLtz6XICXc5Y2l04D_IarfhkK4FdbX8WaP8K4A3K6T6efccE0YlUBv3fBTfCs0esjK0Qd2xOhZcGxTdPrELUOrIXfuI7mQXN1/w400-h260/invest-in-india-from-us.png" title="Invest in Indian Stock Market From US" width="550" /></a></span></div><span style="font-family: arial;"><br /><i>This guest post is contributed by choiceindia.com</i><br /></span><span style="font-family: arial;"><br />Stocks may be the most acceptable option for you if you're an NRI looking for the best investment opportunities in India. After the United States and Japan, India has the third-largest investor base worldwide. For NRIs who wish to engage in Indian stock markets under the Portfolio Investment Scheme (PIS), which is governed by the RBI, the Foreign Exchange Management Act (FEMA) has set forth several regulations.<br /></span><span style="font-family: arial;"><br />Being a Person of Indian Origin (PIO) or an Indian citizen residing outside India qualifies you as an NRI. There should be a minimum of 60 days and 182 days throughout your stay in India during a given fiscal year. You will still be recognised as an NRI if you meet this requirement, even if you spent 365 days or more in India over the previous four fiscal years. You may also qualify for NRI status if you are sent abroad for a period longer than six months.<br /></span><span style="font-family: arial;"><br /><span style="font-size: medium;"><b>How to Make Stock Market Investments Using PIS?</b></span><br /></span><span style="font-family: arial;">You can only have one PIS Account (Portfolio Investment scheme) for stock market investment if you're an NRI and create a Non-Resident External (NRE) Account with a bank that has received approval from the RBI. You can deposit money in any currency and withdraw it in rupees by using this account since the money you deposit is converted to rupees when it is placed there. An NRE account can be opened in a variety of formats, including savings and current or recurring deposits that are also subject to exchange rate changes.<br /></span><span style="font-family: arial;"><br /><span style="font-size: medium;"><b>After creating an NRE account, these are the next steps to follow</b></span><br /></span><span style="font-family: arial;">The actions listed below must be followed to invest in Indian stock markets:<br /></span><p></p><ul style="text-align: left;"><li><span style="font-family: arial;">You must mention your SEBI-registered broker's name when registering a PIS Account.</span></li><li><span style="font-family: arial;">A PIS approval letter will be issued by the bank and must be provided to the broker.</span></li><li><span style="font-family: arial;">The broker now allows you to open a free Demat Account and Trading Account.</span></li></ul><span style="font-family: arial;"><br /><span style="font-size: medium;"><b>PIS Account: What it Means?</b></span><br /></span><span style="font-family: arial;">The Portfolio Investment scheme (PIS) Account, which is connected to the Trading Account and Demat Account and serves as residents of India's equivalent of a bank account, is where NRIs invest their money.<br /></span><span style="font-family: arial;"><br /><span style="font-size: medium;"><b>How to Open a Share Market Account?</b></span><br /></span><span style="font-family: arial;">If you are thinking <a href="https://choiceindia.com/blog/how-to-open-share-market-account/" target="_blank">how to open a share market account in India</a> from the US? To open a share market account, the following important documents must be submitted by the <a href="https://choiceindia.com/nri-demat-account" target="_blank">NRI Demat account</a> holder to set up a trading cum Demat account. Once these documents have been provided and validated, the broker can proceed with processing the application for trading and Demat account:<br /><ul style="text-align: left;"><li><span style="font-family: arial;">PINS letter (Portfolio Investment Scheme), FEMA declaration, and a copy of the PAN card are all attached. The FEMA Declaration is crucial for confirming the source of funding.</span></li><li><span style="font-family: arial;">NRIs must produce copies of their foreign passports, Indian passports, PIO cards, OCI cards, and other documents. Officials from the embassy can notarize photocopies.</span></li><li><span style="font-family: arial;">For the bank's records, the NRI must provide documentation of their international address and a bank cheque that has been cashed from their international account.</span></li><li><span style="font-family: arial;">Before opening the trading and Demat account, the NRI will also need to sign and execute a FATCA (Foreign Account Tax Compliance Act) declaration as part of the PMLA (Prevention of Money Laundering Act, 2002).</span></li></ul></span><span style="font-family: arial;"><br /><span style="font-size: medium;"><b>Additional information that an NRI Demat account holder should be aware of</b></span><br /><ul style="text-align: left;"><li><span style="font-family: arial;">NRIs are only permitted to trade on a delivery basis in stock markets; they are not permitted to trade intraday.</span></li><li><span style="font-family: arial;">An NRI may purchase convertible debentures and shares of Indian corporations through stock exchanges, but the total amount of investment is limited.</span></li><li><span style="font-family: arial;">By a directive from the RBI, an NRI is also prohibited from investing in particular equities and industries.</span></li></ul></span><span style="font-family: arial;"><br /><span style="font-size: medium;"><b>The Bottom Line</b></span><br /></span><span style="font-family: arial;">With a steady increase in foreign investment over the years, India is one of the top emerging markets globally. Investing in the Indian stock market could be a wise choice if you're trying to diversify your investment portfolio by purchasing foreign stocks. As a result, using the PIS platform, which is under the control of the RBI, NRIs can participate in Indian stock markets.<br /></span><span style="font-family: arial;"><br />It is crucial to open an NRI Demat account with a reputable financial partner before investing in the Indian stock market. You have access to various investment options, devoted relationship managers, and a simple online account setup process through Choice India NRI financial advising services.<br /><br /></span><p></p>Sanjay Mataihttp://www.blogger.com/profile/09447447865916667523noreply@blogger.comtag:blogger.com,1999:blog-3255046650358600165.post-57313507830458559972022-01-31T10:55:00.000+05:302022-01-31T10:55:12.755+05:30Gold Loan Industry Development Phases<p><span style="font-family: arial;"><i>This guest post is contributed by Renisha Chainani, Head - Research, Augmont Goldtech Pvt. Ltd.</i><br /></span><span style="font-family: arial;"><br />Gold has not only maintained its status of "store of value" for over 5,000 years but also preserved its purchasing power. Gold is a highly liquid asset and customers can easily use it to satisfy their liquidity needs. Loans are provided by lenders who secure gold assets as collateral. In India, the gold loan market is big business compared with the rest of the world. India is one of Gold's largest consumers with an estimated cumulative stock approaching 25000 tonnes, of which 65 percent belong to the rural population<sup>1</sup>. Because of the household jewellerys' emotional value, people rarely sell their gold to meet their immediate financial needs. However, people pledge their ornaments as collateral, as an alternative, and secure short-term loans.<br /></span><span style="font-family: arial;"><br />At a broad level, the lenders of <a href="https://www.augmont.com/gold-loan" rel="sponsored" target="_blank">gold loans</a> are classified into two main categories: Organised and Unorganised. Because gold loans are granted against the gold pledged by borrowers, the amount of gold available to customers is a key parameter when determining the size of gold loans on the market. For centuries, money lenders and pawnbrokers have provided gold loans to people from all walks of life. Currently, the Unorganized Gold Loan market in India is estimated to be close to 65 percent of the total market for gold loans. Unorganized players provide quick gold loans with little documentation but at a very high-interest rate, with their local market knowledge. Customers are at risk of exploitation by these players because they are totally unregulated.<br /></span><span style="font-family: arial;"><br />Until two decades ago, most of the lending was through pawnbrokers and money lenders in the unorganized sector. However, this scenario is changing with the arrival of organized players in the sector, such as banks and non-bank finance companies (NBFCs), which now command over 60 percent of the market. The organized market for gold loans has grown by more than 30 percent between 2010 and 2019<sup>2</sup>.<br /></span><span style="font-family: arial;"><br />Outstanding total gold loans in the organized sector in 2019 are estimated at 5.5 percent of India's total household gold holdings, indicating a low market penetration. Gold loan demand is projected to hit new heights, however, with the ease in monetizing gold and enhanced economic development in rural India. In the meantime, the organized market for gold loans comprising banks (public, private, small finance and co-operative), Non-Banking Financial Company (NBFCs) and Nidhi companies contribute to nearly 35 percent of the Indian gold loan market.</span></p><p><span style="font-family: arial;"><br /></span><span style="font-family: arial;"></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgJCd_OBcIRSQGVHNzsOTDASXCnmOb97q1yIIVF35ufg6XopUw_jnTujKhqowFfE7VEylxTmAtryfMIPcqege_HiVs9JR-e_yOlAMNVdE0lj4Wn-iggyBE5J7VpELC4pVoo6AgTEfVc_iHPMaSWbrPV3vUeSMgqGE_3J5xl0Tk6nHjhpggiQpYFGbgb=s928" style="margin-left: 1em; margin-right: 1em;"><img alt="gold-loan-industry" border="0" data-original-height="250" data-original-width="928" height="172" src="https://blogger.googleusercontent.com/img/a/AVvXsEgJCd_OBcIRSQGVHNzsOTDASXCnmOb97q1yIIVF35ufg6XopUw_jnTujKhqowFfE7VEylxTmAtryfMIPcqege_HiVs9JR-e_yOlAMNVdE0lj4Wn-iggyBE5J7VpELC4pVoo6AgTEfVc_iHPMaSWbrPV3vUeSMgqGE_3J5xl0Tk6nHjhpggiQpYFGbgb=w640-h172" title="Gold Loan Industry" width="640" /></a></div><br /><span style="font-family: arial;">Owing to its large network, quicker turnaround time, higher Loan-to-value (LTV) ratios and the opportunity to service non-bankable customers, NBFCs were a big driving force behind this development. The comparative advantage in this industry is that the average tenure in gold loans is at an average of 4-5 months<sup>3</sup>, which means strong receivables for them. Even under these economic slowdown conditions, they can manage their growth cycle with dynamic quantitative management by lowering the LTV and loan advances.</span><br /><span style="font-family: arial;"><br /><b>Gold Loan Industry Phases</b><br /></span><span style="font-family: arial;"><br /><b><i>Phase 1 (2006-2011) – High growth<sup>4</sup> </i></b><br /></span><span style="font-family: arial;">• The Branch network grew 7x.<br /></span><span style="font-family: arial;">• Higher LTV up to 85%.<br /></span><span style="font-family: arial;">• Gold prices rose 150% in five years.<br /></span><span style="font-family: arial;">• Lower cost of funds because of eligibility under priority sector lending.<br /></span><span style="font-family: arial;">• Rise of India’s middle class, consumerism and urbanization<br /></span><span style="font-family: arial;">• Support from buoyant economic growth.<br /></span><span style="font-family: arial;"><br /><b><i>Phase 2 (2012-2013) – Regulatory tightening</i></b><br /></span><span style="font-family: arial;">• RBI removed the priority sector tag from the sector in March 2012, which led to higher borrowing costs.<br /></span><span style="font-family: arial;">• RBI capped LTV to 60% in March 2012, which weakened competitive positioning. <br /></span><span style="font-family: arial;">• Higher LTV-focused customers moved to moneylenders, whereas interest-sensitive customers moved to banks.<br /></span><span style="font-family: arial;">• Gold prices fell 25% in two years.<br /></span><span style="font-family: arial;">• RBI prohibited the grant of loans against bullion/primary gold and gold coins.<br /></span><span style="font-family: arial;">• RBI prohibited the inclusion of making changes in the value of the jewellery.<br /></span><span style="font-family: arial;">• RBI placed a limit on banks’ exposure to a single gold NBFC to 7.5% from 10.0% earlier.<br /></span><span style="font-family: arial;"><br /><b><i>Phase 3 (2014-2015) – Regulatory easing and Growth</i></b><br /></span><span style="font-family: arial;">• Tier I capital requirement was increased to 12% in April 2014<br /></span><span style="font-family: arial;">• RBI increased the cap on LTV to 75% in September 2013.<br /></span><span style="font-family: arial;">• RBI capped banks’ LTV also to 75%, thereby creating a level playing field.<br /></span><span style="font-family: arial;">• Stability in gold prices since then.<br /></span><span style="font-family: arial;">• Introduction of non-gold products by gold loan NBFCs.<br /></span><span style="font-family: arial;">• Operating leverage kicking in.<br /></span><span style="font-family: arial;">• Key players started leveraging technology (online gold loan), personalized loan schemes, improved branding and targeted marketing<br /></span><span style="font-family: arial;"><br /><b><i>Phase 4 (2016-2017) – Demonetization hiccups</i></b><br /></span><span style="font-family: arial;">• Demonetization and GST related hiccups<br /></span><span style="font-family: arial;">• A transitory slowdown in the gold loan business <br /></span><span style="font-family: arial;">• Higher delinquencies and write-off in microfinance business<br /></span><span style="font-family: arial;">• Cash crunch in the market led to an immediate shortfall in business<br /></span><span style="font-family: arial;">• Weakness in the rural economy<br /></span><span style="font-family: arial;"><br /><b><i>Phase 5 (2018-2019) – NBFC Liquidity Stress<sup>5</sup> </i></b><br /></span><span style="font-family: arial;">• The NBFC liquidity stress led to a slowdown in disbursals among small players as they were fund starved<br /></span><span style="font-family: arial;">• The cost of funds for large gold loan players and banks remained relatively stable but increased for smaller players<br /></span><span style="font-family: arial;">• The prevailing liquidity crunch in India means that the demand for gold loans remains strong as consumers are looking to meet their short-term fund requirements<br /></span><span style="font-family: arial;">• The emergence of new-age fintech and online gold loan companies is transforming the way traditional way of doing the gold loan business to a highly digitised model.<br /></span><span style="font-family: arial;"><br /><b><i>Phase 6 (2020-2021) – COVID-19 pandemic doubles the AUM</i></b><br /></span><span style="font-family: arial;">• Gold prices rose 15% in 2020 and 2021, due to safe-haven buying amid COVID-19 fears.<br /></span><span style="font-family: arial;">• Gold loan business shines as economic stress grows amid the pandemic. Fears of recession, Liquidity crisis, Nationwide Lockdown, Travel Restriction, Work from Home or Layoffs for employees lead to companies operating with 50% staff.<br /></span><span style="font-family: arial;">• Early in August 2020, the RBI announced an increase in the loan-to-value ratio on gold loans given by banks (from 75 percent to 90 percent) up to March 31, 2021, to provide relief to borrowers affected by the pandemic.<br /></span><span style="font-family: arial;">• Gold loans business AUM doubles and perform better than other credit products amid people seeking refuge in a slowdown, rising gold prices, the risk profiles of borrowers deteriorating and lenders becoming risk-averse.<br /></span><span style="font-family: arial;"><br /><br /><span style="font-size: small;"><sup>1</sup> Retrieved from <a href="https://bfsi.economictimes.indiatimes.com/news/nbfc/nbfc-crisis-didnt-bother-us-muthoot-finance/69967990">https://bfsi.economictimes.indiatimes.com/news/nbfc/nbfc-crisis-didnt-bother-us-muthoot-finance/69967990</a><br /></span></span><span style="font-size: small;"><span style="font-family: arial;"><sup>2</sup> Retrieved from <a href="https://www.moneycontrol.com/news/business/markets/the-glittering-nbfc-gold-loan-sector-promising-future-4480421.html">https://www.moneycontrol.com/news/business/markets/the-glittering-nbfc-gold-loan-sector-promising-future-4480421.html</a><br /></span><span style="font-family: arial;"><sup>3</sup> Retrieved from <a href="https://bfsi.economictimes.indiatimes.com/news/nbfc/nbfc-crisis-didnt-bother-us-muthoot-finance/69967990">https://bfsi.economictimes.indiatimes.com/news/nbfc/nbfc-crisis-didnt-bother-us-muthoot-finance/69967990</a><br /></span><span style="font-family: arial;"><sup>4</sup> Retrieved from <a href="http://www.idbidirect.in/IDBIAdmin/Pdf/Gold%20Finance_Sector%20Report_270318_Retail-27-March-2018-1319447120.pdf">http://www.idbidirect.in/IDBIAdmin/Pdf/Gold%20Finance_Sector%20Report_270318_Retail-27-March-2018-1319447120.pdf</a><br /></span></span><span style="font-family: arial;"><span style="font-size: small;"><sup>5</sup> Retrieved from <a href="https://assets.kpmg/content/dam/kpmg/in/pdf/2020/01/return-of-gold-financiers-in-organised-lending-market.pdf">https://assets.kpmg/content/dam/kpmg/in/pdf/2020/01/return-of-gold-financiers-in-organised-lending-market.pdf</a></span><br /></span><span style="font-family: arial;"><br /><br /><b>Author Bio:</b><br /></span><i><span style="font-family: arial;">• Renisha Chainani has rich research experience of over 15 years and expertise in Fundamental, Technical, Sentimental, and Intermarket Analysis in Bullion, Commodities, and FOREX.<br /></span><span style="font-family: arial;">• Before joining Augmont, she was associated with IIMA-IGPC and was heading the Commodities research desk at India’s top broking companies like Edelweiss Securities, Globe Capital, and Monarch Networth Capital Ltd.<br /></span><span style="font-family: arial;">• She holds an MBA(Finance) degree and is currently pursuing a Ph.D. in Gold Markets from Gujarat University.<br /></span><span style="font-family: arial;">• Mrs. Chainani has published various research papers in renowned international journals and her articles in print media.<br /></span></i><span style="font-family: arial;"><i>• She has been a prominent guest speaker on business news TV channels like CNBC TV 18, CNBC Awaaz, Zee Business, ET Now, etc for the last 8 years to share her views on Bullion and Commodities Markets</i><br /></span><span style="font-family: arial;"><br /><br />[Disclaimer: This is a Sponsored Post.]<br /><br /></span><p></p>Sanjay Mataihttp://www.blogger.com/profile/09447447865916667523noreply@blogger.comtag:blogger.com,1999:blog-3255046650358600165.post-23847579151938708032021-10-06T10:36:00.000+05:302021-10-06T10:36:10.983+05:30The 40% Problem When You Invest In National Pension (NPS)<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOSBAS22qILaZelxC-3Y821ho-Pimbmqwnk8jgRGiVmgudy_bdZQLUGaVkQGa_SgK7jve812E_k4WsDE-1HHOTX2aQLR4qJAGJqQkjlZbQRHU5C-GWzvLXz0GnB-riPmKmneScJeeEz3E/s1280/nps-40-percent-problem.jpg" style="margin-left: 1em; margin-right: 1em;"><img alt="nps-40-percent-problem" border="0" data-original-height="853" data-original-width="1280" height="270" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOSBAS22qILaZelxC-3Y821ho-Pimbmqwnk8jgRGiVmgudy_bdZQLUGaVkQGa_SgK7jve812E_k4WsDE-1HHOTX2aQLR4qJAGJqQkjlZbQRHU5C-GWzvLXz0GnB-riPmKmneScJeeEz3E/w640-h426/nps-40-percent-problem.jpg" title="NPS The 40% Problem" width="450" /></a></div><br /><span style="font-family: arial;">Many people are attracted towards NPS (National Pension System) primarily for one reason... EXTRA TAX SAVINGS.</span><p></p><p><span style="font-family: arial;"><br />Firstly, you can invest an 'additional' amount — over and above the Rs.1.50 lakhs limit u/s 80C — in the NPS and claim <b>extra tax deduction of up to a sum of Rs.50,000</b> per year; giving you a total deduction of Rs.2 lakhs.<br /></span><span style="font-family: arial;"><br />Secondly, your employer can contribute up to 10% of your salary (Basic + DA) in the NPS. This <b>contribution from the employer is NOT INCLUDED</b> in your taxable income for the year.<br /></span><span style="font-family: arial;"><br />This, double tax savings bonanza, is quite tempting indeed. More importantly, this tax incentive is specific to NPS only, and not available for any other investment/income.<br /></span><span style="font-family: arial;"><br />Plus, of course, you don't have to worry about whether your savings will last your lifetime or not. There's the <i><u>comfort of guaranteed, safe and assured income after retirement</u></i> till the very end of your (or even your spouse's) life. You can sleep peacefully, knowing that you will never run out of money.<br /></span><span style="font-family: arial;"><br /><span style="background-color: #fcff01;">However, there's one major issue that has not received people's due and adequate attention.</span><br /></span><span style="font-family: arial;"><br />And that could turn out to be a serious problem post-retirement:<br /></span><span style="font-family: arial;"><br />As you would be aware, on retirement you are ALLOWED to WITHDRAW maximum 60% of the accumulated corpus. <b>The balance 40% will be LOCKED-IN in an Annuity Plan FOREVER</b>.<br /></span><span style="font-family: arial;"><br /><span style="background-color: #fcff01;">It is this 40% that requires a deeper analysis.</span><br /></span><span style="font-family: arial;"><br />Let's take a simple example:<br /></span><span style="font-family: arial;"><br />Suppose, you invest Rs.50,000 additional amount every year in the NPS for tax-saving purposes. There is no employer's contribution.<br /></span><span style="font-family: arial;"><br /><i>Assumptions</i>:<br /></span><span style="font-family: arial;"><u>Time till retirement</u>: 20 years<br /></span><span style="font-family: arial;"><u>Average return during accumulation</u>: 10% p.a.<br /></span><span style="font-family: arial;"><u>Annuity rate of return</u>: 6% p.a.<br /></span><span style="font-family: arial;"><br />If that be so, you would have invested Rs.10 lakhs over 20 years. The accumulated corpus after 20 years would roughly be around Rs.30 lakhs. Of this,<br />(a) you could withdraw 60% i.e. Rs.18 lakhs <b>(TAX-FREE)</b> and<br />(b) the balance 40% i.e. Rs.12 lakhs will compulsorily be invested in an Annuity Plan, which will give you an income of around Rs.72,000 p.a. <b>(TAXABLE)</b>.<br /></span><span style="font-family: arial;"><br /><b><span style="color: #cc0000; font-size: medium;">1st problem: Merely tax deferment</span></b><br /></span><span style="font-family: arial;">Effectively speaking, you saved tax on Rs.50,000. But now you will have to pay tax on Rs.72,000. Assuming, your tax bracket remains the same, you would be worse off by investing in the NPS.<br /></span><span style="font-family: arial;"><br />Instead, if you saved this Rs.50,000 in say hybrid funds, you will not get any tax benefit now. But, your withdrawals would attract very little or no tax at all, due to the indexation benefit on the long-term capital gains.<br /></span><span style="font-family: arial;"><br />So, the question you need to answer is:<br /></span><span style="font-family: arial;">Would you like to<br /></span><span style="font-family: arial;">a. Save Tax Now (in NPS) and Pay Tax Later (in Annuity)<br /></span><span style="font-family: arial;">OR<br /></span><span style="font-family: arial;">b. Pay Tax Now (on a smaller amount) and Save Tax Later (on a bigger amount)?<br /></span><span style="font-family: arial;"><br /><b><span style="color: #cc0000; font-size: medium;">2nd problem: Low Returns</span></b><br /></span><span style="font-family: arial;">Typically, the rate of return in an Annuity Plan is quite low...in fact, <span style="background-color: #fcff01;">lower than even the prevailing bank FD rates</span>.<br /></span><span style="font-family: arial;"><br />Whereas debt funds will, in all probability, deliver somewhat better returns than the bank FD rates.<br /></span><span style="font-family: arial;"><br />So, even on a pre-tax basis, there is a strong likelihood of earning below-par returns FOREVER if you take the NPS-Annuity route. And, if you account for the <u>annuity pension's tax inefficiency</u>, the gap increases further.<br /></span><span style="font-family: arial;"><br />Earning such low returns, year after year for decades, is most definitely a serious issue.<br /></span><span style="font-family: arial;"><br />Besides, Rs.72,000 p.a. means just Rs.6000 per month. This, 20-30 years later, won't buy you even a day's groceries. So NPS alone cannot be the answer to your Retirement Planning. You have to think of alternatives too.<br /></span><span style="font-family: arial;"><br /><b><span style="color: #cc0000; font-size: medium;">3rd problem: Fixed return forever</span></b><br /></span><span style="font-family: arial;">The rate of return, applicable at the time of buying the annuity, will not change throughout the lifetime. You (your spouse) will receive the SAME AMOUNT year after year for probably decades.<br /></span><span style="font-family: arial;"><br />Therefore, you will NOT get the benefit of any increase in the interest rates thereafter.<br /></span><span style="font-family: arial;"><br />Of course, you are also protected against the risk of falling interest rates.<br /></span><span style="font-family: arial;"><br />If the rates are at historically high levels, maybe it's fine if the returns are fixed forever. But, if the interest rates are low (as at present), this would be a serious issue.<br /></span><span style="font-family: arial;"><br /><b><span style="color: #cc0000; font-size: medium;">4th problem: Zero Liquidity</span></b><br /></span><span style="font-family: arial;">You have NO ACCESS whatsoever to this Rs.12 lakhs. Annuity plans do not allow premature withdrawal at all. (Depending on the type of annuity plan you choose, there would either be no return of principal amount, or your nominee will be returned the principal amount after your death.)<br /></span><span style="font-family: arial;"><br />If you retire at say 60 and live till 80-85, you have around 20-25 years of post-retirement period. This is too long a time period. Anything can happen in these 2-3 decades. There could be any number of reasons when you would wish you could withdraw at least some amount.<br /></span><span style="font-family: arial;"><br />Maybe you need to finance your children’s education.<br /></span><span style="font-family: arial;">Maybe you have a critical illness in the family.<br /></span><span style="font-family: arial;">Maybe you move to your hometown and have to buy a house.<br /></span><span style="font-family: arial;">Maybe you need capital to start a business post-retirement.<br /></span><span style="font-family: arial;">Maybe you have settled abroad and would like to shift all your investments out of India.<br /></span><span style="font-family: arial;"><br />You cannot depend on the Annuity Plan to bail you out in these difficult circumstances. It will not give you even a SINGLE rupee out of YOUR corpus.<br /></span><span style="font-family: arial;"><br />This loss of access to a fairly large part of the capital is another issue, which has not been given deep thought.<br /></span><span style="font-family: arial;"><br />And, if we add employers' contribution to this, the problem becomes enormous.<br /></span><span style="font-family: arial;"><br />Say, in addition to your Rs.50,000 additional investment, the employer too contributes Rs.50,000 to the NPS. In which case, the amount locked-in in the Annuity would be around Rs.24 lakhs. And, while you save tax on Rs.1 lakh now, post-retirement you will have to pay tax on around Rs.1.44 lakhs.<br /></span><span style="font-family: arial;"><br />The more the investment, the bigger the problem.<br /></span><span style="font-family: arial;"><br /><b><span style="font-size: medium;">Concluding:</span></b><br /></span><span style="font-family: arial;">Don't be lured by the additional tax saving offered by the National Pension System. In fact, it's not tax saving, it's merely postponing the tax liability (unlike say EPF, which is a genuine tax saving).<br /></span><span style="font-family: arial;"><br />Don't be lured by a lifetime of assured income offered by the Annuity Plan. The post-tax returns will be much below par.<br /></span><span style="font-family: arial;"><br />And, as discussed, NPS alone would be totally inadequate. You would need other options too for a comfortable and stress-free retirement. If that be so, why even think of NPS, given its multiple problems?<br /></span><span style="font-family: arial;"><br />You can do a much better job yourself, without any serious efforts or requiring any serious financial knowledge.<br /></span><span style="font-family: arial;"><br />Think about it. Seriously.<br /><br /></span></p>Sanjay Mataihttp://www.blogger.com/profile/09447447865916667523noreply@blogger.comtag:blogger.com,1999:blog-3255046650358600165.post-69405652041181029732021-09-14T10:49:00.001+05:302021-09-17T10:16:55.644+05:30This is How You Will NOT Lose Money in The Stock Market<p></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifl_9j-sEhbStDRvGOPlA8KNq_Hr2zZ-HlBFJOudaFEpemeZqXbym1Vw82auRt67XjBvsE0sj4NUQLjcgur1Vit67XGFNUeJvhspQorEdGYQ7kaJ__rNG5VLPe8tLii42m7jfbY0Xzd1A/s1280/fear-of-losing-money-in-stocks.jpg" style="margin-left: auto; margin-right: auto;"><img alt="fear-of-losing-money-in-stocks" border="0" data-original-height="708" data-original-width="1280" height="280" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifl_9j-sEhbStDRvGOPlA8KNq_Hr2zZ-HlBFJOudaFEpemeZqXbym1Vw82auRt67XjBvsE0sj4NUQLjcgur1Vit67XGFNUeJvhspQorEdGYQ7kaJ__rNG5VLPe8tLii42m7jfbY0Xzd1A/w400-h221/fear-of-losing-money-in-stocks.jpg" title="Fear of losing money in Stocks" width="500" /></a></td></tr><tr><td class="tr-caption" style="text-align: right;"><br /></td></tr></tbody></table><span style="font-family: arial;">Recently, there has been a sharp surge in the 'new' equity investors. However, still more than 90% of the Indians don't invest in the stock market. Reason? FEAR OF LOSS.</span><p></p><p><span style="font-family: arial;"><br />I invest in equity. Does it mean that I am okay with losing money? No, definitely not!<br /></span><span style="font-family: arial;"><br />On the contrary, like everyone else, I too HATE losing money... but with a difference.<br /></span><span style="font-family: arial;"><br /><i>I hate losing money in low-return and tax-inefficient investments like Fixed Deposits.<br /></i></span><span style="font-family: arial;"><i>I hate losing money in sub-standard products such as Insurance Policies and Annuities.<br /></i></span><span style="font-family: arial;"><i>I hate losing money in dubious schemes that (falsely) promise to pay high returns.</i><br /></span><span style="font-family: arial;"><br />Therefore, I invest in equities where I can earn superior — in fact, far superior </span><span style="font-family: arial;">— </span><span style="font-family: arial;">returns.</span></p><p><span style="font-family: arial;"><br />Of course, equities are volatile. Forget about returns. There is a "so-called risk" of even losing your CAPITAL. Many investors have indeed become paupers at the stock exchange.<br /></span><span style="font-family: arial;"><br />However:<br /></span><span style="font-family: arial;"><span style="background-color: #fcff01;"><i>The risk is NOT in the stock markets. The risk is with the investors.</i></span><br /></span><span style="font-family: arial;"><br />Say I give you a Mercedes or AUDI or BMW to drive. If (a) you don't know how to drive and/or (b) you don't follow the traffic rules, you will surely crash even the best of the cars. The risk is in YOU, not the CAR.<br /></span><span style="font-family: arial;"><br />Likewise, I tell you the best Mutual Funds or Stocks to buy. If (a) you don't know how to invest and/or (b) you don't follow the investment rules, you will lose money even in the best of the funds/stocks. The risk is in YOU, not the FUNDS/STOCKS.<br /></span><span style="font-family: arial;"><br />However, I know that most of you would be somewhat reluctant to put in the effort required to become financially literate, or be bothered with multiple investment rules.<br /></span><span style="font-family: arial;"><br /><i>Like a tip in the stock market, you want an easy and instant solution.</i><br /></span><span style="font-family: arial;"><br />Thankfully, there's one:<br /></span><span style="font-family: arial;"><br />Without much further ado, let me share with you the <span style="background-color: #fcff01;">simplest </span></span><span style="background-color: #fcff01;"><span style="font-family: arial;">— </span><span style="font-family: arial;">a</span></span><span style="background-color: #fcff01; font-family: arial;">nd the easiest </span><span style="background-color: #fcff01; font-family: arial;">— </span><span style="background-color: #fcff01; font-family: arial;">TRICK of making tons of money in equities, <i>with practically no chance of losing your investment</i></span><span style="font-family: arial;">.</span></p><p><span style="font-family: arial;"><br /><b>First</b>: <u>Hire a good driver</u>. In other words, give your money to the mutual fund manager.<br /></span><span style="font-family: arial;"><br /><b>Second</b>: <u>Along with Money, invest TIME too</u>. In other words, invest your money in equities for 10-15 years.<br /></span><span style="font-family: arial;"><br />Do this and<br />(a) not only the probability of you making a loss will drop to almost ZERO,<br />(b) but you could also end up making really MASSIVE gains.<br /></span><span style="font-family: arial;"><br />I am not saying so. The numbers say so. The <span style="background-color: #fcff01;">data analysis reveals this historical FACT</span>.<br /></span><span style="font-family: arial;"><br />I did some detailed number crunching on the Nifty 50 Index since its birth in July 1990 till Mar 2021 i.e. a long period of 30+ years.<br /></span><span style="font-family: arial;"><br /><span style="color: #cc0000;">a) Suppose I did a SIP of Rs.1000 p.m. for 5 years (i.e. 60 months) starting on any given day (i.e. around 6200+ possible start dates). What was the value of my investment after 5 years?</span><br /></span><span style="font-family: arial;">Here's what the data revealed:<br /></span><span style="font-family: arial;"><u>Amount invested</u>: Rs.60,000<br /></span><span style="font-family: arial;"><u><br />If I was very lucky</u>: My investment value after 5 years would have been Rs.1,74,000 i.e. more than 37% annualized returns.<br /></span><span style="font-family: arial;"><u><br />If I was terribly unlucky</u>: After 5 years my investment would be down to Rs.45,450 i.e. a loss of around 11.50%.<br /></span><span style="font-family: arial;"><u><br />Average Value after 5 years</u>: Rs.81,500 i.e. 11.6% returns<br /></span><span style="font-family: arial;"><u><br />No. of times money lost</u>: 837 out of 6200 i.e. 13.4% chances of losing money<br /></span><span style="font-family: arial;"><br /><span style="color: #cc0000;">b) Suppose I did a SIP of Rs.1000 p.m. for 10 years (i.e. 120 months) starting on any given day (i.e. around 5000+ possible start dates). What was the value of my investment after 10 years?</span><br /></span><span style="font-family: arial;">Here's what the data revealed:<br /></span><span style="font-family: arial;"><u>Amount invested</u>: Rs.1,20,000<br /></span><span style="font-family: arial;"><u><br />If I was very lucky</u>: My investment value after 10 years would have been Rs.5,08,000 i.e. more than 24% annualized returns<br /></span><span style="font-family: arial;"><u><br />If I was terribly unlucky</u>: After 10 years my investment would be down to Rs.1,03,000 i.e. a loss of mere 3%<br /></span><span style="font-family: arial;"><u><br />Average Value after 10 years</u>: Rs.2,30,000 i.e. 11.8% returns<br /></span><span style="font-family: arial;"><u><br />No. of times money lost</u>: 218 out of 5000 i.e. 4.3% chances of losing money<br /></span><span style="font-family: arial;"><br /><b><span style="font-size: medium;">So, what lessons can we learn from such a long history of the Indian stock markets?</span><br /></b></span><span style="font-family: arial;"><b>a.</b> Be it the best of the times or the worst, if you stay invested in the market for 10 years or more, there is very little chance that you will lose money (and even if you do, it will be too small to bother you).<br /></span><span style="font-family: arial;"><br /><b>b.</b> Typically, you can expect around 12% p.a. returns. This is far better than all other investment options. (<u>Plus, the icing on the cake</u>: Much lower tax liability as compared to most of the other investment options.)<br /></span><span style="font-family: arial;"><br /><b>c.</b> Here, I have taken Nifty 50 as an example, which comprises the top 50 companies. Whereas mid-cap and small-cap companies have the potential to deliver even better returns. So, build a well-balanced and diversified portfolio, and you can expect to improve the returns to around 15% or more.<br /></span><span style="font-family: arial;"><br /><u>By the way</u>:<br />Some people would definitely feel... Oh, 10 years! I have to wait for 10 YEARS? They believe that Stock Market is a place where you can double your money in quick time.<br /><br />However:<br /></span><span style="font-family: arial;"><i>Investing for 10+ years is no big deal.<br /></i><br />You are anyway doing it now also (e.g. your insurance policy or the PPF). So why not show the same patience and discipline with equities too!!<br /><br />Just because it is easy to buy and sell equities, doesn't mean you have to do so.<br /><br />Don't play with equities as if it is a T20 match. Instead, look at it as a Test Match. From time to time, It may appear dull and boring. But in the end, it is indeed very rewarding.<br /><br /></span><i>[Image courtesy:<a href="https://pixabay.com/users/geralt-9301/?utm_source=link-attribution&utm_medium=referral&utm_campaign=image&utm_content=203760">Gerd Altmann</a> from <a href="https://pixabay.com/?utm_source=link-attribution&utm_medium=referral&utm_campaign=image&utm_content=203760">Pixabay]</a></i></p>Sanjay Mataihttp://www.blogger.com/profile/09447447865916667523noreply@blogger.com