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Yash Investments. The stock market is filled with individuals who knows the price of everything,But the value of nothi

25/11/2016

SIMPLYING MUTUAL FUNDS TO HELP FULFIL YOUR DREAMS .
1) You need a large sum to invest in mutual funds

Ans. : You need not have a lot of money to start investing in mutual funds. You can start with a sum as low as Rs.500 p.m .by investing through Systematic investment Plans (SIPs).

2)Buying a top-rated mutual fund scheme ensures better returns .

Ans. : Mutual fund ratings are not static as they are based on various parameters which also include fund performance .A fund that is rated highly today, may not necessarily maintain its rating within its category a year later .Investments in mutual funds need to be tracked regularly to evaluate their performance .

3)Investing in mutual funds is the same as investing in stock market .

Ans. : Not all mutual funds invest only in stocks . Mutual funds, given their specific objective invest in a variety of asset classes ranging from stocks, fixed income and even oversea instruments .Thus , there is a fund for every type every type of investors, spanning a risk spectrum of low to high.

You need to time mutual fund investments .
Ans. : For your investments , time spent in the market is more critical than timing the market . Your mutual fund investments can be channelized through SIPs to help you average out your cost of investments irrespective of market movements

22/06/2016

EQUITY VIEW :- The Modi government crossed a milestone of being in power for 2yrs in th month of May 2016. While there has been a lot of debate over how much the government has been able to deliver over the last 2yrs ,one must certainly give them credit for seeking to tackle the issues and bottlenecks ,which have curbed economic growth in the last few years . The markets in India (Large cap Nifty index ) were buoyant in the month of May 2016, marking the third consecutive month of out performance as compared to global peers.The large cap Nifty Index rose by 3.95% in INR terms while the Midcap index rose by 0.73% in INR terms .
One key factor driving the market in then month of May has been the marginally positive outcome of the Q4Y16 result season. After a considerable period of time , companies have reported improvement in sales momentum and it does appear that the pace of earnings downgrades would slow hereon. A factor now to watch out for will be the onset and the progress of the monsoons which would have a bearing on agriculture growth as well as rural demand .

Kinds of Mutual Funds
09/06/2016

Kinds of Mutual Funds

Amid high market volatility last year, investors took refuge in balanced funds. Net inflows into balanced funds , which ...
02/06/2016

Amid high market volatility last year, investors took refuge in balanced funds. Net inflows into balanced funds , which invest in a mix of equity and debt instruments, more than doubled to Rs 19,743 crore in 2015-16. Steady returns and equity fund-like tax treatment have made them popular. But their more sophisticated cousins, the dynamic asset allocation funds, which have performed better over the past year, haven't got the same attention.

Difference ..

While both balanced and dynamic funds follow an asset allocation approach—investing in debt and equity based on market conditions— they differ in their approach to juggling the asset mix. While balanced funds maintain a steady exposure to equity and debt, dynamic asset allocation funds switch aggressively. They can invest between zero and 100% in equity, depending on the market situation. "The degree of flexibility is much wider in dynamic asset allocation," says Kaustubh Belapurkar, Fund Research, Morningstar India. Balanced funds typically invest at least 65% of their corpus in equity, and the rest in debt. The equity portion varies between 65% and 75%.

The good and the bad ?

While both the categories attempt to contain volatility in returns, dynamic asset allocation funds score over balanced funds in this respect. Across different time frames, they have exhibited a lower standard deviation (around 0.4%)—a measure of volatility in a fund's return. So, even though balanced funds have delivered better returns over longer time frames, these have come at a slightly higher risk—standard deviation of over 0.7%—compared to dynamic fund .

What also works in favour of dynamic funds is they do away with the need to actively monitor and rebalance the portfolio. With rising equity market valuations, these funds will invest a larger portion of the corpus in debt and cash while cutting down on equities. Declining market valuations will automatically trigger ramp up in allocation to equities while slashing exposure to debt. "Dynamic funds are beneficial to those who do not have the stomach for timing the market. Since the fund does the rebalancing automatically, they do not have to worry about where to put their money," says Arun Gopalan, VP, Research, Systematix Shares and Stocks.


Dynamic asset allocation funds, however, fall short on tax efficiency. Equity-oriented balanced funds typically maintain a 65% exposure to equities, and qualify for better tax treatment compared with dynamic funds. Gains realised after one year are tax-free for the investor, even the debt portion incurs no tax. However, most dynamic asset allocation funds follow the Fund of Funds structure— where the fund invests in other equity and debt funds—so are taxed as non-equity funds, irrespective of their level of exposure to equities. For other schemes, which invest directly in stocks and bonds, the taxation depends on the average level of exposure to equities during the year. If at the time of exiting the scheme, it has maintained, on an average, 65% of its corpus in equities for that particular year, the scheme is treated as an equity fund for taxation purpose. Otherwise, any realised gains are taxed along the lines of a debt fund, making the scheme taxinefficient.

Another problem with dynamic funds is that their investing models are not alike. "The different approaches may be difficult to understand," says Lakshmi Iyer, CIO, Debt and Head of Products at Kotak Mutual Fund. While most switch between equity and debt, based on the relative valuation of the two segments, they use different metrics to gauge the extent to which markets are under-or over-valued. For instance, Franklin India Dynamic PE Ratio and Principal Smart Equity decides allocation based on the PE multiple of the underlying index, ICICI Prudential Dynamic Fund goes by the Nifty's price-to-book value and DSP BlackRock Dynamic Asset Allocation Fund considers the 10-year government bond yield over earnings yield of the Nifty.

Dynamic or balanced?

Given their flexible structure, dynamic asset allocation funds should be best suited to capture market opportunities, but the aggressive rebalancing sometimes acts as a handicap for the funds as they cannot capture the market upside effectively. That is why experts say balanced funds are a better choice for managing risk for most investors. "Investors would be better off with a flexible allocation within a narrower band with a plain vanilla balanced funds are a better choice for managing risk for most investors. "Investors would be better off with a flexible allocation within a narrower band with a plain vanilla balanced fund," says Belapurkar.

29/05/2016

You would hear your mutual fund advisors recommending that you hold equity funds for the long term; typically five years or more. Ever wondered what happens, especially when you invest lump sums and exit over a shorter period of say one or three years? Chances are that you may have been left with lower money than you invested!
We ran some numbers to check this with indices as well as mutual funds with a long track record to see if staying long is the only way to build wealth. The numbers revealed the following: staying reasonably long is a must; but with equity mutual funds, you have to also stay invested with the right funds. Else, your wealth building can be sub-optimal.
Seven years for indices
We first ran the rolling returns of some key indices over 1, 3, 5, and 7-year time frames. Rolling returns help capture the returns you would have got had you invested on any day over this time frame.
The returns are calculated everyday for the time buckets over a 10-year period between March 2006 and March 2016. The finding below is self explanatory. With the Nifty, you would have ended with negative returns, a fourth of the time, had you tried to take your equity money within a one-year period. The chances are worse with the mid-cap index.

There was a 2 per cent chance (based on when you invested) that you ended with negative returns even over a 5-year time frame with the Nifty. When did this negative 5-year returns period occur? It was between the peak of January 2008 and January 2013, and also October, November or December 2007 (run up to the peak) to similar months in 2012. In other words, investing in a peak market may leave you with negative returns even five years hence, especially if you had invested as a lump sum.
Over a 7-year period, this probability becomes zero.
But what if we stayed invested for the long term? What are the chances of building wealth? We looked at the probability of these indices delivering 10 per cent and 15 per cent annually over the same time frames of 1, 3, 5, and 7 years.

The above data provides a couple of interesting inferences:
• The mid-cap index struggles to consistently deliver over 10 per cent returns. While the Nifty 50 delivered 10 per cent or more annual returns 76 per cent of the times over a 7-year time frame, the BSE Midcap could deliver alike only on 45 per cent of the occasions.
• Delivering 15 per cent annual returns consistently is not easy. The Nifty managed this 50 per cent of the occasions over a 7-year time frame; the mid-cap index could do so only a third of the time.
• But interestingly, the mid-cap index delivered 15 per cent returns on more occasions on a one-year basis (47 per cent of the time) than it did over 5 and 7-year periods. Simply put, mid-caps deliver high returns over shorter time frames.
This is why when you pick a mid-cap fund based on its one-year record, you may well go wrong. What does the above data tell you besides the fact that investing is for the long term?
• One, you have to keep your expectations moderate when you invest in equities over the medium term. For instance while the Nifty delivered 10 per cent or more returns over a 5-year period, two-thirds of the time, it had only a 50 per cent chance of delivering 15 per cent annual returns. Hence, if you are building your goal based on time frames, be reasonable in your expectations.
• Two, you don’t have to necessarily load up a lot on mid-caps to make your portfolio click. While mid-caps, no doubt, deliver more, they don’t do so consistently. Their ability to deliver 10 per cent or 15 per cent annual returns over longer time frames pales when compared with large-cap or diversified indices.
• Three, the data shows that a broad-market index like S&P BSE 500 has done relatively well in terms of consistently delivering over 15 per cent annual returns. This index is a mix of large-caps and mid-caps. Its performance suggests that a combination of large and mid-cap funds, or just a multi-cap fund, can perform better for you than going overboard on one segment of market cap.

27/05/2016

Stay true to your risk appetite - Based on the investment objective, underlying securities and investment methodology, every mutual fund scheme carries different amount of risks. While equity funds have the highest risk, liquid funds carry the least. Choose a scheme that matches your own risk appetite.

26/05/2016

There are various tax saving investment options available to an individual to save tax u/s 80C of the Income Tax Act. One of the best ways to grow money along with saving tax is to invest in Equity linked Savings Scheme. Generally people rush to make tax-saving investments at the end of the year which often results in flawed decisions.

Investments in ELSS should be treated differently from other tax saving investment options such as PF, NSC, Tax saving Fixed Deposit etc, which offers fixed rate of returns. Being an equity investment, it is exposed to market risks and its performance depends to a large extent on the points of entry and exit.

Here are the things you should know and keep it in mind before making investment in ELSS.

25/05/2016

Retirement happens to be one of the most important life-stage goals, if not the most important! Yet, most of us do not plan prudently to ensure we have a happy and hassle-free post-retirement life.
Retirement is a fairly long-term goal, which requires careful considerations and planning.
A 30-30 rule of thumb says an individual earns for 30 years, to provide for 30 years of post-retirement life where the individual’s income would have stopped, yet the need to maintain similar life style exists.
Have you planned for your retirement yet?

Why Mutual Funds ?
25/05/2016

Why Mutual Funds ?

25/05/2016

why SIP ?

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