Nagesh-Mutual Fund Advisor/Distributor

23/05/2015

Dear Friends,

In our schools we were taught the languages, Science, Social, Maths, but not anything about finance or money. Though we deal everyday with money. It's disappointing to know that many of them do not have any idea where to make good investments once they start earning. They think that buying LIC policies, gold or real estate as the real investments. Not many know about the equities. They do not know for how much they should buy insurance policy and which policy should be bought. Worst of all they do not know the product name that they have bought. They work so hard for their money but when it comes to finance they do not even spend a few hours to know which one is the best for investing. They don't even attempt to know about them though most of them are available on the internet, the public libraries. They spend most of their free time on the facebook, whatsapp during their weekends. If these people do not know much about the equities then how can they teach them to their children. Our Educational System should be blamed for this. They should include finance right from Class 3 or 5. Children should be taught about the income, the expenses, later on as a first step they should be taught how to invest in RDs and then slowly should be moved to the world of equities. I started investing in RDs while I was in 9th standard and came to know about mutual funds when I was around 25 years of age.
1. Do not buy LIC policies as investments or for tax purpose. They provide only 6 to 8% as returns at the time of maturity. Buy only Online Term policy for insurance purpose which is the cheapest form of insurance available. Though online term policies were available from private players, the Bid Daddy has introduced the product last month. LIC eTerm plan. Consider buying this.

2. Buy Health Insurance policy even though your employer has provided one. The policy provided by your employer ceases once you quit your job. What will you do after retirement?. The hospital expenses are skyrocketing. Two weeks back I went for a policy for my mom. Her policy was rejected because she had BP and sugar and none of us knew about this. She walks for an hour everyday and we thought she is healthy. So, if you have any disease you will not be issued a policy. So, please consider buying one when your are healthy.

3. Invest in Mutual Funds for a long term. They have given superb returns over a period of time. HDFC Equity Fund which has been since 20 years has given 21% since inception. In this journey of 20 years, Rs 10,000 has become ~ Rs. 4.7 lacs as at a CAGR of 21.0. A SIP of just Rs 2,000 per month in HDFC Equity Fund since inception (total investment of Rs. 4.8 lacs) has grown to more than Rs. 1 crore by March 2015. Market has fallen from its highs more than 5 times during these 20 years and in spite of this volatility the fund has performed really well. Though this fund has given 21% returns I keep on saying be satisfied with 15% returns per annum and anything above that should be treated as BONUS. I have taken only the case of HDFC Equity but there are many funds which are doing really well.

4. Consider investing in Gold, Real Estate thereafter.

Have you ever thought from where LIC pays the interest amount to you. The premium collected by you is invested in stock markets. They get huge money as returns but pays only 6 to 8% to you on maturity. LIC is the Big Daddy of Stock Market. When they can invest and reap super profits why don't you all consider investing directly into stock markets through Mutual Funds or buying Shares. You make money, why allow LIC to make money and give a scrap to you. Think over friends. Start teaching your kids about finance at an early age.

30/04/2015

Dear Friends,
Be Ready with Cash. There is PROBABILITY of more downside to the market. This will be a chance to enter into Good Quality Stocks or Mutual Funds if you have missed in the past one year. I keep on re-iterating, people shop more when there is a huge discount of their favorite brands. Act in the same way when investing. Buy MORE when the markets fall. That is the time you make money. People who have already started with SIP during the past one or two year need not worry about the fall. This is very common in stock market. Continue to invest with your SIPs. People who have not started yet, this is the time to enter with SIPs.

27/03/2015

ELSS to Build Wealth

The below article is from Valueresearchonline.com.

It's the equity element that gives ELSS it's unique wealth-creation abilities.

How to get sustained high returns is one of the most frequent asked question from the field of finance. The answer is simple; invest systematically and over time, the impact of compounding will help in generating returns. This easy to follow approach is applicable to every type of investor; the low risk taker to those who can take more risk. The outcome for both will be the same; the difference being a low risk taker will take longer time to build a large kitty over the one who is a willing risk taker.
To illustrate this method, we built five different scenarios taking into account investments in four different instruments: the PPF, the average of equity funds over a 20-year history, and the Sensex Total Return Index, which is nothing but Sensex which also includes dividends.
In each instance we took R1.5 lakh as annual investment, because this is the upper limit of what one needs to deploy each year to claim deduction under Section 80C to save on income tax. We took the actual data over the past 20 years of each these instruments to demonstrate wealth creation. Remember, the last two decade includes phases of ups and downs, scams, global events and events local to India, which collectively factor in the impact of these events to our finances.

26/03/2015

Dear Friends, as expected Markets are coming down. It cannot go in one way. From past one year it went higher because of BJP's win. Market expected quick reforms from the govt but that did not happen. Reforms will take its time, also many of the companies are not reporting good results. Markets went ahead of the fundamentals. There is no positive trigger for the market. From here on, only good corporate results will take it higher. People who thought that they missed the bus when the market was going higher, they have a good chance to enter the market now. A Prudent investor invests when the market is down. They get more units in the mutual funds. More shares if they are investing directly. People who are investing directly into shares now can consider to buy ICICI, SBI which have corrected for more than 20 to 30% from their highs. Remember that these companies have given 20 times your investment in the last 20 years even after so much volatility in the market. This is an opportunity to buy quality companies. A very important point to consider while investing is INVEST MORE when the market corrects or when it is falling that is the time you make money.

02/03/2015

Dear Friends,

Well for the past so many years I was telling you all to invest in mutual funds for the long term to reap good benefits. The Finance Minister has taken a good step to give tax benefits who invests in NPS. So, now people who want to save additional tax benefits, can now invest in NPS (more like a mutual fund) but invests only in Index and Govt Debt, and Bonds. At least, take a step forward and invest in NPS. This might not give stellar returns like a mutual fund but it is BETTER THAN YOUR PF, PPF, NSC, LICs. Invest in 'E' category. In this category, 50% of your money is invested in equities and the rest in govt bonds and debts. As of now, SBI, ICICI and HDFC fund managers are doing well managing our money.

24/02/2015

Friends,

Govt have decided to increase the limit for 80C from 1 lakh to 1.5 lakh. Make use of this opportunity and invest in ELSS (Equity Linked Savings Scheme) which has given excellent returns from past 19 years. You can Google and check out the performance. Below is the performance of HDFC Tax Saver from past 19 years. Rs 3000 invested every month from past 19 years has given 23% CAGR. The amount you would have invested is Rs 6,84,000 (Rs 3000 x 228 months) but by the end of 19th year, this would have gone to Rs 88,76,052. I am pretty sure that none of the investments in PPF, NSC or FDs have given such stellar returns and that too after having volatility in the markets.

98% of the people duplicate their investments under 80C. They anyway pay through PF (which is debt product) but again they go ahead and invest in PPF (which is also a debt product). Both PF and PPF gives only 8.5% returns every year. Instead of putting all the money to PPF or NSC, diversify your investments and reap benefits. But don't expect 23% returns and be satisfied with 15%, anything more than 15% returns should be treated as bonus returns.

17/02/2015

17/02/2015

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17/02/2015

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