investment

Mutual Funds or ETFs?

Exchange-traded funds are baskets of securities, much like mutual funds. Unlike mutual funds, ETFs are bought and sold throughout the day. That gives buyers and sellers more control, whereas mutual fund orders are only processed after the market close, based on the day’s final prices. The Growth of ETFs has been volatile. In 1990’s there were just 29 and near to end of 2016 there were 1,700 investing in various stocks and bonds and other securities. ETFs and Mutual funds are a lot in common. Both of them pursue a specific investment goal. Both offer diversification also both manage costs but depending on their investment objectives. What are the structural differences? Mutual funds accumulate a pool of money and invest to pursue objectives stated in fund’s prospectus. All the resulti...

Ever Heard Of This Investment Risk?

Investors are aware that investing in capital markets may present any number of risks such as Interest rate risks, company risk, market risk etc. Risk is not a separable companion for long-term growth. Some of the risks can be mitigated by the method of diversification. Also you may face another less known risk as an investor for which neither the market compensate you nor can it easily be reduced by diversification.  Yet it might be the biggest challenge to the sustainability of your retirement income. This risk is called the SEQUENCE OF RETURNS RISK. The uncertainty of the order of returns which an investor shall receive over a period of time refers to sequence of returns risk. “Never try to walk across a river just because it has an average depth of four feet”. For an example- say a mar...

How to Double Your Investment?

There’s something that intrigues most investors by the idea of doubling one’s money. Doubling your money is a realistic goal that investors must always be moving towards, as well as something that can lure people into impulsive mistakes regarding investing. Here we shall look at the right and the wrong ways to invest for huge returns. THE SUPERIOR WAY- EARN IT SLOWLY To double your money, the most tested way over a reasonable time is to invest your money in a solid, non-speculative portfolio that diversifies between investment grade bonds and blue chip stocks. The portfolio won’t get doubled in a year, but will surely do eventually. The old rule of 72 helps you calculate the time it would take for your investment to get doubled if its growth compound itself. According to rule 72 you got to...

How can Diversification Help you?

Diversification is an important mean to manage risk. But, it does not guarantee against a loss. The key is to identify investments that perform different under various market conditions. It will be diversified between bonds, stocks and cash alternatives. How diversification works For an instance, say a stock portfolio included a mechanics company, a car manufacturer and a diesel service firm. Here, even though the portfolio has spread risks it may not be considered as a good diversified portfolio as all of them are connected to one Mechanical industry. So, switch to different portfolios such as a mechanics company, a computer company and a drug manufacturer. The concept of diversification is one reason as to why mutual funds are so popular among the investors. Ways to diversify your invest...

Your Emergency Fund- Is It enough?

Have you ever experienced one of those days wherein the water heater stops heating, dishwasher stops washing & your family ends up on a first-name basis with the nurse at urgent care. Then, as you are driving to work you see smoke seeping out from under your hood. Bad things happen to the best of us, & instead of spacing themselves out, they almost always come in waves. It is important to have a financial life preserver, in form of an emergency cash fund. Many people know that an emergency fund is an important resource but at the same time they area nit sure about how much to save or where to keep the money. Others wonder how they can find any extra cash to sock away. HOW MUCH MONEY? How much is enough to set a target amount for starting an emergency fund?  Unfortunately, there is ...

Mistakes You Should Avoid To Help Your Money Grow Through S I P

A Systematic Investment Plan allows investments (small amounts) at regular intervals to yield high returns over a long period of time. SIPs help you build your wealth gradually without hurting your financial commitments rather than just investing a lump sum amount. It has the power of averaging and compounding which makes it a smart investment option- There are some common mistakes investors make:-   Deciding huge amount for investing Investors make a mistake on not calculating their present and future financial capabilities before committing high investment amount. + What to do? Set a realistic amount for monthly SIP investments by evaluating your financial condition such as present and future salaries, expenses and contingencies. Investing for one year It is an extremely small durat...

How Do You Choose The Right Mutual Fund?

  Saving and Investment for future security is at most important for each and every individual. For several people, busy lifestyle and lack of proper information might create a problem in selecting the right investment product. Mutual funds help you to get out of this hindrance. Mutual funds provide skilled investment management for people at a reasonable value. Here are a few tips for selecting mutual funds: Fund house: You need to choose a fund house on which you’ve got enough faith to invest your money and not adjust in a scheme of your choice. Identify fund houses that have a powerful presence within the financial world and provide funds that have consistent record.   Achieve goals of investment: Investments are made in such a way that it makes sure your savings enhance your ...

Reasons Why Investing in Mutual Funds In Nothing Like Gambling

  Very often, we come across peers and friends who believe that investing in mutual funds is likely to be gambling. Let’s have a look on the differences between investing and gambling. TIME SENSITIVE: Gambling like betting over a sports match or a casino lasts only as long as the event does. You cannot recover your money you lost during the respected event. On other hand, investing is a long term process where you have chances of making profits over the years over your initial investment. DIVERSIFICATION: While in gambling, there is no such risk-mitigation strategies applied. Whereas, mutual funds’ investments help you diversify your money. RECOVERY: If at gambling you lose money with an unlucky hand, you lose all of it at once which has no recovery option. Whereas when mutual funds a...

Start Small and Grow Big

Dream Big, Start Small, Stay Focused and Keep Going Forward Ever thought of saving from your salary? Ever managed to do it? If not, here is a plan for you to develop the habit of saving and investment – SAVE INSURE INVEST !! Let’s start small – Rs.500 It is an amount you can save easily and get started with investing. Rs.500 is the minimum amount to start an SIP(systematic investment plan). Start investing Start investing in an SIP with a debt mutual fund as it let’s you withdraw the amount at a day’s notice and also provides better returns if the money is left dol in your savings account. Stay invested regularly Set a fixed date for an SIP every month so that you don’t end up spending money. Keep the process on for about 6 months to 1 year and later sta...

Reasons Why You Should Start Planning For Your Personal Finance

Personal finance includes all the financial decisions and activities of an individual or household, including budgeting, insurance, mortgage planning, savings and retirement planning. It is basically application of principles of various monetary decisions of an individual or family unit. For planning your personal finance, you need to know what importance it plays in building wealth. UNDERSTANDING THE BASICS OF PERSONAL FINANCE: Balancing your checkbook, making of personal budget, investment techniques and creation of emergency funds, these all makes up your personal finance basics and you need it to master it all.  BANDING TOGETHER YOUR GOALS WITH YOUR PERSONAL FINANCE PLANS: Planning your finance in such a way that it collaborates with your goals. Personal financial planning is made out ...

How To Keep The Bull Market Healthy

A bull market is a financial market of a group of securities in which prices are rising or are expected to rise. The term “bull market” is most often used to refer to the stock market but can be applied to anything that is traded, such as bonds, currencies and commodities. A level and direction of interest rate are important to dedicate to healthy bull market low and a rising rates indicate the growth of the market and also states as to how good a market is high dollar as an “outlier” requiring close monitoring given its disruptive role in the commodity market crash in 2014 while believing that we are in a “Commodity super cycle bear market.” Profit being the pulse of the market is erratic and must be regained.  Avoiding small caps for 2 weeks and select...

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