tag:blogger.com,1999:blog-24982097267612043692024-03-13T08:58:30.314-07:00My LearningsRitesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.comBlogger125125tag:blogger.com,1999:blog-2498209726761204369.post-54506112745638020882021-04-06T16:54:00.001-07:002021-04-06T16:54:49.157-07:00Over Rs 1 crore! This mutual fund SIP trick will help you double your maturity amount - here is calculation<div><b>While making any investment, an investor's major goal is to become rich as soon as possible. Some of them do achieve their investment goal with the available limited investment tools.</b></div><div><b><br></b></div><div><b>"Successful investors don't do different things, but they do things differently."</b></div><div><b><br></b></div><div><b>Let's take mutual fund investments. A person who is in the nascent phase of career generally chooses a systematic investment plan (SIP), which is one of the most popular parts of mutual fund investment. According to my experience over last 30 years, a mutual fund investment will give at least 10 to 12 per cent return if the investment is for long-term. </b></div><div><b><br></b></div><div><b>However, I am with opinion that after one begins an SIP, one should think of increasing the SIP amount annually in sync with one's salary hike. It will help him or her maximise returns.</b><br></div><div><b><br></b></div><div><b>Speaking on the mutual fund SIP investments, "Mutual Fund is subject to market risk and one should have the appetite to take risk."</b></div><div><b><br></b></div><div><b>In the long-term Equity market linked mutual fund sip will give at least 12 per cent return but when I say long-term, then it should be an investment for not less then 15 years."</b></div><div><b><br></b></div><div><b>let's assume that we starts a mutual fund SIP of Rs 6,000 for 25 years and return for the same period is 12 per cent. Then as per the mutual fund calculator, </b><b>future estimated amount</b><b> will be Rs 1,13,85,811.</b></div><div><b><br></b></div><div><b><div class="separator" style="clear: both; text-align: center;">
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</div>However, we should increase SIP amount annually as salary or income grows. In that case it will be able to maximise money's worth.</b></div><div><b><br></b></div><div><b>Let's see how mutual funds SIP step-up plan will impact future estimated amount after 25 years if the same Rs 6,000 SIP is increased 10 per cent per annum. As per the mutual fund calculator, </b><b>future estimated amount</b><b> after 25 years at 12 per cent returns will be Rs 2,36,92,246.</b></div><div><b><div class="separator" style="clear: both; text-align: center;">
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</div>Out of these Rs Rs 2,36,92,246 </b><b>future estimated</b><b> amount, net investment will be Rs 70,80,988 and rest Rs 1,66,11,258 is gain earned throughout the investment period of 25 years.</b></div><div><b><br></b></div><div><b>So, this 10 per cent step up in the Mutual Funds SIP will jump from Rs 1,13,85,811 to Rs 2,36,92,246, which is more than double from the normal mutual funds SIP investment.</b></div><div><b><br></b></div><div><b>Call me for detailed discussion and information about schemes for achieving such </b><b>future values.</b></div><div><b><br></b></div><div><b>Ritesh Sheth</b></div><div><b>Chartered Wealth manager CWM®</b></div><div><b>9930444099</b></div><div><b>E-mail: riteshdsheth@gmail.com</b></div><div><b><br></b></div><div><b><br></b></div>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-53169550358984329562021-03-27T17:42:00.000-07:002021-03-27T17:42:29.342-07:0010 Reasons You’re Not Rich Yet<p dir="ltr">10 Reasons You’re Not Rich Yet</p>
<p dir="ltr">As a Investment and insurance agent, I have spent many years helping other people overcome financial stumbling blocks so they can become rich. Ironically, the one person I have had the most trouble helping is myself.</p>
<p dir="ltr">Being “rich” can mean different things to different people, but I believe it means having the financial freedom to achieve your goals and live the life you want. </p><p dir="ltr">I am great at giving advice; I am not always so great at taking my own advice (know anyone like that?). So, when it came to helping my clients understand why they weren’t rich yet, the easy part was explaining the culprits, because I was all too familiar with most of them.</p>
<p dir="ltr">Regardless of our upbringing, education, profession or lifestyle, most of us are not where we want to be financially and our reasons are probably more similar than different. The good news is that it is never too late to become rich if you, like me, are ready to own up to the reasons you’re not and do something about it.</p>
<p dir="ltr">Want to know why you aren’t rich yet? Keep reading.</p>
<p dir="ltr">#1: You spend money like you’re already rich.</p>
<p dir="ltr">Sure, it feels good to buy expensive things, whether it’s a luxury car, designer clothes, a big house in the burbs, or a tropical vacation. Even if you don’t necessarily buy pricey items, if you consistently buy stuff you really don’t need, it still adds up fast (Rs.30000 trip to Target for toothpaste?). But the shopping high only lasts until the guilt and regret set in or the credit card bill arrives. Most of us are guilty of living beyond our means and using credit cards more than we should. The problem is that as long as we continue to spend more than we have, we can’t start building wealth. Chronic overspending and high-interest, revolving credit card debt are your worst enemies when it comes to financial success. Spend like you’re poor and you are much more likely to become rich.</p>
<p dir="ltr">#2: You don’t have a plan.</p>
<p dir="ltr">Without clearly defined short, mid and long-term goals, becoming rich will just seem like an unattainable fantasy. And that turns into your go-to excuse for why you shouldn’t bother saving or stop overspending. As we say in the financial industry: those who fail to plan, plan to fail. Creating a financial plan may seem overwhelming or intimidating, but it doesn’t have to be. Whether you do-it-yourself or decide to work with a financial professional, the process simply starts with prioritizing your goals and writing them down. Put that list where you can see it on a regular basis. Visual reminders go a long way in helping us stay on track.</p>
<p dir="ltr">#3: You don’t have an emergency fund.</p>
<p dir="ltr">I know, you’ve heard it a hundred times: you need to have at least six months of income saved in an emergency fund. And yes, it’s much easier said than done. However, I’ve seen too many people (including myself) get hit with a major unplanned expense, whether it’s a car or home repair or a medical bill, or an unexpected job loss, accident or illness that’s led to a drastic reduction in income. When these things happen–and they do, more often than you might think–not having a financial safety cushion can make the situation much, much worse. If you’re forced to rely on credit cards, you’ll end up sinking deeper into debt instead of, yes, saving to become rich.</p>
<p dir="ltr">#4: You started late.</p>
<p dir="ltr">With every year or month that goes by without saving, your chances of becoming rich decrease. Time and compounding interest are your two best friends when it comes to growing money, so wasting them really hurts. Just like exercising, the hardest part of saving is starting. Even if you’re in debt, making little money or have a lot of expenses, you can still always save something — even if it is a small amount. The sooner you get yourself into the habit of saving — regardless of how much — the easier it will be for you to continue and eventually increase those savings. I like to think of saving as a muscle you have to work out and build with practice. Even if you start saving late, you can still become rich if you’re committed enough. But you need to start. Now.</p>
<p dir="ltr">#5: You’d rather complain than commit.</p>
<p dir="ltr">“Life is too expensive.” “I’ll never get out of debt.” “I don’t make enough money.” “Investing is too risky.” I’ve probably heard every excuse for why someone isn’t saving, investing or planning in general, and I’ll admit I’ve used a few of them myself from time to time. It’s easier to be lazy and let bad habits fester than to commit to –and follow through on — changing them. It’s no wonder obesity and debt are epidemics in our country, and that millions of Americans have had to push off retirement. As long as the complaining, excuses and finger-pointing persist, so too will not becoming rich. Instead, take responsibility for your bad habits and focus on what you can do to change them. Then do it.</p>
<p dir="ltr">#6: You live for today in spite of tomorrow.</p>
<p dir="ltr">I get it. It is really hard to think about retirement and other distant fantasies when we have needs and plenty of wants now. The bills have to get paid, the family must be fed, momma needs a vacation — and a new wardrobe to go along with it. The problem is that impulsive and overly-indulgent behavior commonly lead to credit card debt, spending money you might have otherwise saved and, yes, not becoming rich. Do yourself a favor: Ditch the “buy now, worry later” mindset and instead, adopt a “save now, get rich later” mindset.</p>
<p dir="ltr">#7: You’re a one-trick investor.</p>
<p dir="ltr">You might be lucky enough to become rich by betting all your money on one type of investment. Just like you might be lucky enough to win the lottery. But that’s not a strategy for getting rich (at least, not one I’d ever recommend).</p>
<p dir="ltr">One of the worst financial mistakes you can make is putting all your money eggs in one basket. Doing so puts you at too much risk, whether it is being too conservative or too aggressive. Sure, the stock market is on a run and real estate is on an upswing again, but are you prepared for when the tides turn? Because they will. And if you are invested in all fixed-income securities like CDs, bonds and annuities and think you’re safe, inflation should make you think again. Your investment portfolio needs to include a good mix of investments with varied levels of risk and return potential and liquidity (so you can get your money when you need it).</p>
<p dir="ltr">#8: You don’t automate.</p>
<p dir="ltr">Here’s the secret to saving: Automation. Saving is seamless when it’s automatic. Unfortunately, we are not born to be savers. We are impulsive and greedy by nature. Being responsible requires much more discipline. However, automation forces us to be responsible without too much effort. And all it requires is setting up regular transfers from a salary or bank account to a savings or Mutual investment account. Without it, we are much more likely to spend money we could be saving. Even if it is a seemingly small amount that you automate, those steady investments can make a big difference over time. Automate whatever you can whenever you can; just be careful to avoid overdrafting your account and try to increase your savings amount periodically.</p>
<p dir="ltr">#9: You have no sense of urgency.</p>
<p dir="ltr">You might think you don’t need to worry about getting out of debt or saving because someone, or something else will save you. Maybe it’s a pay raise, a new job, an inheritance, a rich spouse, or the lottery you’re counting on. Whatever “it” is, you use it as an excuse to put off taking steps on your own to become rich. The problem is that very little in life is certain. Who knows what will actually happen, or not happen, so why not focus on what you can control now? Save now and save yourself — just in case something, or someone, else won’t.</p>
<p dir="ltr">#10: You’re easily influenced.</p>
<p dir="ltr">Maybe you live with a chronic overspender or a typical day out with your girlfriends involves shopping. Or maybe it’s your inner “Real Housewife” that you sometimes can’t control. We all have negative influences in our lives that threaten our chances of becoming rich. The superficial, materialistic, sensational culture in which we live is probably the biggest one. The suffocating swirl of media that goes along with it makes it ten times worse. The trick is not giving in to temptation. How? Some of it is making conscious choices to avoid putting yourself in vulnerable positions. But most of it is having the willpower to keep the goal of becoming rich in the front of your mind, especially when you are tempted to sabotage yourself.</p>
Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-35352996790205698542021-03-27T17:30:00.001-07:002021-03-27T17:30:34.677-07:00How to choose the right health insurance policyMost financial planners say that having a health insurance plan is the starting point of all financial plans.<div><br></div><div>Even before one starts investing towards one's goals, getting an adequate health insurance cover for self and family helps.</div><div><br></div><div>Here, I look at the various important features and factors of a health insurance policy that may help you zero-in on the right policy.</div><div><br></div><div>Why you should get health cover</div><div>According to few studies done in the past, the medical inflation in India is around 17 per cent annually, much above the general inflation level. The need for adequate health insurance is increasingly becoming important and so is choosing the right health insurance plan.</div><div><br></div><div>Now, at the moment you might be in the pink of health, however, health insurance is not only about illnesses and diseases. It's a universal truth that accidents may occur anytime and at any age. A health cover could come handy in such an event.</div><div><br></div><div>Further, at times, certain ailments remain unknown to us until their symptoms are visible later on in life. Although, not a mandate, a policy bought at an early age and renewed for quite some years without any claim, may help in better claim experience as and when it arises.</div><div><br></div><div>See what kind of health cover is required</div><div>Health insurance plans are broadly categorised as 'indemnity plans' and 'defined-benefit plans'. While, indemnity plans reimburse the hospital expense, defined-benefit plans pay a lump sum amount irrespective of the actual hospital expense.</div><div><br></div><div>The 'indemnity' plans, which could be an individual health insurance (popularly known as mediclaim or family floater policy), should form the core of one's health insurance portfolio. Top it up with a critical illness plan which is a defined-benefit plan and thereafter one may add Hospital Daily Cash plan to meet incidental costs during hospitalisation.</div><div><br></div><div>See which indemnity cover suits you</div><div>Once someone gets convinced that a health insurance plan is a must-have even before starting to invest for life goals, the conundrum to either go for an 'individual health plan' or a 'Family Floater' (FF) arises. "One should consider an individual plan over a family floater cover if one wants an extensive coverage. This also ensures that adverse experience in one policy does not affect others in the family. Balance sum insured for other members may not be adequate at time in case of a family floater policy," </div><div><br></div><div>The 'individual health plan' has to be bought in the name of each individual spouse, children, parents etc. This means, the premium will be as per each individual's age and respective sum insured. Insurer's, however, provide a 10 percent discount on the total premium if more than one member of the family is insured simultaneously. In case of a claim by one member, the sum insured of other members remains intact.</div><div><br></div><div>In a 'Family floater' health insurance plan, more than one member can be covered under the same plan. For instance, both parents and their children can be covered together and only one single premium is to be paid. Under an FF health plan, the entire sum insured can be availed by any or all members and is not restricted to one individual, as is the case in an individual health plan. An FF plan takes advantage of the fact that the possibility of all members of a family falling ill at the same time or within the same year is low.</div><div><br></div><div>Estimate how much of cover is required</div><div>Although there is no fixed rule as to how much health insurance you should have; the coverage should ideally depend on one's residential city, history of family illnesses etc. "For people living in Class A cities (cities like Mumbai), the cover amount should at least be Rs 10 lakh given the high cost of living in metro cities. Not only standard of living, medical treatment is also quite expensive in metro cities compared with smaller towns. For people living in Class B and C cities, the sum insured should be at least Rs 4- 5 lakh," says Mondal.</div><div><br></div><div>Check sub-limit in the plan</div><div>Nowadays, most health insurance plans have sub-limits in them. Sub-limit refers to capping the re-imbursement limit under each or some of such cost-heads. For example, the room-rent may be capped at 1 per cent of the sum insured. So, irrespective of the total sum insured of the policy, one may have to pay out-of-pocket hospital bills unless one sticks to the limit. Some health plans do not have any such sub-limits while few others offer an option to add sub-limits at the time of buying the plan.</div><div><br></div><div>See from when pre-existing ailments are covered</div><div>All health insurance plans cover pre-existing ailments but after a period of 48 months. Few cover them even after 36 months or lesser. However, at the time of buying, it is equally important to disclose the pre-existing ailment, for a smooth claims settlement process. Further, coverage of certain defined and specific ailments have a 'waiting period' of 12 or 24 months, post which they are covered for claim.</div><div><br></div><div>Check for co-payment feature</div><div>It's not necessary that there will be a co-payment feature in all plans but in a senior citizen health insurance plan it could be a mandatory feature. In higher age groups as the premium rates are higher, a co-payment may provide some relief in terms of affordability, as it helps to keep the premium low. Some plans, however, ask for as much as 20 per cent co-payment if the treatment is done at a non-network provider or in a city different from where the plan was bought.</div><div><br></div><div>What you should do</div><div>While choosing a health cover, one should ideally start by comparing plans from 2-3 preferred insurers. Have a close look at the inclusions and exclusions in the most basic plan being offered by them. Do not base your decision solely on the premium, instead prefer simple plans with fewer conditions and restrictions. And remember, every member of the family, irrespective of the age, needs health insurance cover to tide over unforeseen medical exigencies anytime in the future.</div><div><br></div><div><div>I believe that every family should be financially prepared for medical emergencies.</div><div><br></div><div>Getting yourself and your family insured for medical emergencies is the first step toward building your financial future. </div><div><br></div><div>*Bajaj Allianz GIC New Health guard is just Click Away*</div><div><br></div><div>Download Boucher for undustanding terms of coverage: </div><div><br></div><div>https://www.bajajallianz.com/download-documents/health-insurance/health-guard/Health-Guard-Brochure-print.pdf</div><div><br></div><div>*Buy health plan Protect your family today. Just click on below link fill the details and pay the amount and get Health insurance covered*</div><div><br></div><div>https://general.bajajallianz.com/Insurance/healthGuard/loadHgDtls.do?src=CBM_0534909</div><div><br></div><div>For detail discussion you can call or chat any time on 9930444099 Ritesh Sheth CWM®</div></div>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-77847037310006622102021-02-19T17:08:00.000-08:002021-02-19T17:08:46.522-08:00How to control our emotions when investing in mutual funds<p>Every time the market hits an all-time high, many investors get jittery. </p><p>Questions like “should I book profits now?” “Should I stop investing now?” start doing the rounds in social media. This article discusses a simple way to handle our emotions when investing in mutual funds or any capital market-linked product.</p><p>The adage, “show me your friends and I will tell you who you are” can easily be modified to suit investors who ask seek counsel on social media: “ask your question, and I will tell you how well planned you are”. Yes, most people who ask questions in personal finance forums on Facebook want to manage money without a plan (and often get angry when we point out the obvious).</p><p>Members of this group admitted in a poll (held months before the March 2020 crash) that 1st-time investors would never buy MFs if they knew about risks! So poor understanding about the product and unrealistic expectations are the most common reason investors abandon mutual funds, buy every shiny fund they come across etc. </p><p>This lot is beyond redemption and is not the subject of this article.</p><p>Let us focus on investors’ who appreciate </p><p>(1) why they need equity in their long-term portfolio; </p><p>(2) the importance of goal-based investing and asset allocation. </p><p>Many such investors find it hard to stay focused after investing and worry about doing the right thing.</p><p> We shall consider an idea which appears to be an oxymoron at first sight: emotional logic. It is only an idea, and like all ideas hard to implement, however, my hope is at least a few reading this would appreciate its value the next time they think of deviating from their investment plan.</p><p><br></p>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-63776232477520412562021-02-19T17:05:00.001-08:002021-02-19T17:05:03.739-08:00‘I believe equities remain the best asset class for long-term wealth creation’<p><font size="4" face="tahoma, sans-serif"><b>1. </b><b>Why are stock markets hitting new peaks at a time when the GDP is in contraction mode? Is the rally for real?</b></font></p><p class="MsoNormal"><font size="4" face="tahoma, sans-serif">Stock markets are forward looking. They work on anticipation of the current and future economic outlook. The Covid impact on the economy was predicted in March and hence the markets corrected. As we stand today, the recovery theme has played out well as markets saw renewed interest for domestic equities from all market participants, including FPIs and portfolio investors. Earnings have backed investor expectations and we believe markets are poised to remain positive sans Covid.</font></p><p class="MsoNormal"><font size="4" face="tahoma, sans-serif"> </font></p><p><font size="4" face="tahoma, sans-serif"><strong>2. </strong><strong>Why are foreign investors pumping money (over Rs 1,60,000 crore in 2020) into Indian markets?</strong></font></p><p class="MsoNormal"><font size="4" face="tahoma, sans-serif">India has been a standout economy in the global context. Especially in the emerging market world, strong political stability and a robust recovery cycle has been a beacon for international investors. In the post-Covid world, where the world is awash with central bank liquidity, India has been getting a disproportionate share. As an opportunity, India continues to remain an attractive destination for global growth investors since they are increasingly comfortable with the structure of the economy, policy and regulatory framework. The government over the last five years has actively worked to make India more business friendly and this is now paying dividends.</font></p><p class="MsoNormal"><font size="4" face="tahoma, sans-serif"> </font></p><p><font size="4" face="tahoma, sans-serif"><strong>3. My</strong><strong> assessment on the debt market? Have interest rates bottomed out?</strong></font></p><p><font size="4" face="tahoma, sans-serif">Domestic bond yields have followed the operative rate downwards as the RBI and the government have emphasised bringing rates lower through policy action and accommodative monetary policy in an attempt to spur growth. While the money market curve and the 3/5-year space have broadly followed suit, longer dated papers especially corporate bonds have remained somewhat anchored. The recent RBI commentary is a clear indication that the RBI intends to keep rates range bound. Unless we see a huge fiscal consolidation or downward growth or inflation shock, rate cuts look unlikely.</font></p><p><font size="4" face="tahoma, sans-serif">For 2021, I believe investors will be best suited to go up the duration curve which would serve investor needs of a higher risk reward. We anticipate the RBI will maintain rates at current levels over the course of the next year at minimum, post which I believe a gradual rising rate environtent will ensue on the back of a recovery in the economy.</font></p><p class="MsoNormal"><strong><font size="4" face="tahoma, sans-serif"> </font></strong></p><p><font size="4" face="tahoma, sans-serif"><strong>4. </strong><strong> The market, Which is at a record high, safe for us (small investors/Retail investors)?</strong></font></p><p class="MsoNormal"><font size="4" face="tahoma, sans-serif">From a grim March to a euphoric November, equity markets have been on a rollercoaster ride, a reminder that equities are a volatile yet rewarding asset class. Small investors have increasingly participated in equity markets through the mutual fund route and through direct stock investing.</font></p><p class="MsoNormal"><font size="4" face="tahoma, sans-serif">The value of the Sensex and the Nifty is just a number. We have seen this time and time again. As India grows, financial markets will rise commensurately to reflect this growth.</font></p><p class="MsoNormal"><font size="4" face="tahoma, sans-serif">As I always say why investing regularly is important. Timing the market rarely works and hence investing is a continuous process which when followed diligently has rewarded investors over the long term regardless of when they entered the market.</font></p><p class="MsoNormal"><font size="4" face="tahoma, sans-serif"> SIP flows have been a testament to this understanding. For the better half of three years now, I have seen unwavering SIP flows.</font></p><p class="MsoNormal"><font size="4" face="tahoma, sans-serif">One must remember that markets have been volatile during this phase. Investors who stick with their investment commitments have reaped the rewards of staying patient. I believe equities remain the best asset class for long-term wealth creation and should form some part of every investor’s portfolio.</font></p>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-39252941831247509932021-02-17T03:21:00.001-08:002021-02-17T03:21:54.544-08:00Way ahead<div>The month of January 2021 witnessed considerable easing of momentum in equity markets as investors resorted to profit booking after an unprecedented rally in the latter months of 2020. The Nifty 50 index fell by 2.5% to 13,634. Meanwhile, the Nifty MidCap 100 and Nifty SmallCap 100 index rose marginally by 0.8% and 1.6% respectively.</div><div><br></div><div>FIIs scaled back their aggressive investment strategy into the Indian equity markets pouring in Rs. 14,512 crs, the lowest since October 2020. Meanwhile, MFs continued their selling spree removing Rs. 12,980 from the equity markets.</div><div><br></div><div>FIIs scaled back their aggressive investment strategy into the Indian equity markets pouring in Rs. 14,512 crs, the lowest since October 2020. Meanwhile, MFs continued their selling spree removing Rs. 12,980 from the equity markets.</div><div><br></div><div>The union budget announced on Feb 1st 2021, brought with it extreme euphoria as the finance minister chose to take The Path Less Trodden. The budget gave a clear indication of the government's focus on growth through capital expenditure without worrying about the fiscal deficit in addition to adopting cleaner accounting methods.This Budget is historic in a way that breaks the shackles of fiscal constraints. By increasing capital expenditure, the multiplier effect on the economy will be significantly more impactful against the previous route of revenue expenditure which results in limited gains.With significantly lower Covid-19 cases, a well-executed vaccine drive, high level of liquidity in the markets and a pro-growth budget, it is not difficult to be optimistic for 2021. Also providing support were earnings upgrades that continue at an unprecedented pace as activity continues to normalize. Along with the earnings upgrades, India also experienced upgrades to GDP estimates. As per RBI, the GDP for FY22 is set to grow at 10.5%, albeit on a lower base.On the global front, While the UK is struggling to stay afloat due to the rapid spread of the new variant of the virus, the US economy is rejoicing due to the Biden administration coming to power. China remains the fastest growing economy in the world and is projected to be the only country to post a positive growth this fiscal. There are clear signs of economic progression as oil prices are nearing long term average levels and a slight retracement in gold prices, indicating revival of risk appetite among investors.The focus for us has been to deploy the remaining corpus, and we are in the process of actively evaluating opportunities for the same. Current equity market valuations at 41.4x look exorbitant and discount even the highest level of growth expectations. The current Quarter earnings YoY growth for Nifty is at 16.16%(34 out of 50 companies’ results are published). Due to the lack of any margin of safety, we advise investors to remain cautious and take advantage of any correction from this point on for long term investments.On the Fixed Income front, a higher-than-expected fiscal deficit announced in the budget leading to a higher-than-expected borrowing program to the tune of 12 lac crores led to an uptick in the 10-year G-sec rate by 11 bps to 6.06%. Presently, we are of the opinion that the heightened borrowing by the government will not affect India’s credit rating or ability to service timely repayments of loans. Much depends on how the government engages with rating agencies and divests in a timely manner. With CPI inflation finally cooling to 4.59% after months of breaching its upper limit of 6%, the real returns to a foreign portfolio investor continues to look attractive.We believe that the yield curve is likely to remain steep this year. Due to the crash in yields for ultra-short term, we believe any investment for a period of 1-2 years should be made in Arbitrage funds due to the pickup of spreads in the category. Banking and PSU debt funds can be considered for a greater than 2-year investment period.</div>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-33137357677292884742021-02-01T15:21:00.001-08:002021-02-01T15:21:03.285-08:00ULIPs now taxable like mutual funds!<p>Finance Bill 2021-22 has proposed to tax gains from ULIP with a premium of more than Rs. 2.5 lakh per year to remove the disparity relative to mutual funds. This means from Feb 1st 2021 if you buy a <strong>new </strong> ULIP with a premium of more than Rs. 2.5 lakhs the maturity proceeds will be taxed identically to mutual funds. Death benefits continue to remain tax-free regardless less of the premium amount. This will reduce mis-selling of ULIPs.</p><p>This rule applies to the sum of the premium of the ULIPs purchased on or after 1st Feb 2021. For example, if you buy three ULIPs and the total premium is above Rs. 2.5 lakh then the gains from all the three ULIPs will be taxed like mutual funds.</p>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-52434534793676468652021-02-01T15:19:00.001-08:002021-02-01T15:19:28.910-08:00Senior citizens 75 and above need not file IT returns subject to conditions!<p>Budget 2021 has only one offering for senior citizens. If some conditions are met, those aged 75 and above need not file income tax returns. They have to pay the necessary tax but need not file returns.</p><p>The conditions for exemption from filing ITR from 1st April 2021 are:</p><ol><li>The senior citizen should be a resident and should be 75 years of age or more during the financial year for which tax has to be paid</li><li>He/She must receive a pension and interest income from the same bank! Different banks are negligible.</li><li>Only certain specified banks are allowed</li><li>A declaration should be given to the bank</li></ol><p>Another interest income from any other source or any kind of capital gains would mean the person has to pay tax. Thus this benefit will not help many!</p>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-36664168083374384792021-02-01T15:17:00.001-08:002021-02-01T15:17:14.532-08:00How employee contributions over 2.5 lakhs gets taxed like a FDFinance Bill 2021 has proposed that employee contributions over 2.5 lakh will be taxed as per slab.<div><br></div><div>Assume that your EPF balance as on 31st March 2020 is Rs. 10,00,000. The employer contribution is, Rs. 20,000 a month; The employee contribution is Rs. 20,000 a month or Rs. 2,40,000 a year (FY).</div><div><br></div><div>In this case, there is no change in rule and nothing need to be done. Suppose the employee decided to invest via VPF Rs. 5000 a month. The total annual contribution by the employee is (5000 x 12) + 2,40,000 = 3,00,000.</div><div><br></div><div>If the EPF rate is say 8% then 8% of (3,00,000 – 2,50,000) = Rs. 4000 should be shown as income while filing ITR and this will be taxed as per slab rate.</div>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-27695432468943416162021-01-16T18:53:00.001-08:002021-01-16T18:53:26.364-08:00WHY YOU HAVE HATERS, EVEN IF YOU’RE A NICE PERSON<div><b>WHY YOU HAVE HATERS, EVEN IF YOU’RE A NICE PERSON</b></div><div><br></div><div>Are you confused as to why you have haters – because you think you’re truly a nice person?</div><div>And YES, you ARE nice!</div><div><br></div><div>So, what motivates a hater to hate? And why are they choosing you to hate on?</div><div><br></div><div>Below I share many reasons why haters gonna hate – for no good reason at all!</div><div><br></div><div>Why nice people have haters?</div><div><br></div><div>1. You have haters because you’re popular.</div><div>Some people only hate you because of the way other people love you.</div><div><br></div><div>Another definition for a hater: “Someone who secretly wishes to be you.”</div><div><br></div><div>In a way having haters is a good thing. It’s means you are truly loved.</div><div><br></div><div>2. You have haters because you did the work to improve your life.</div><div>Your haters don’t want to put in the effort to improve their life. As a result, your success reminds them they are not willing to put in effort to succeed.</div><div>Plus, your presence reminds them about what’s wrong with them – and what’s missing in their life – so they hate you.</div><div><br></div><div>Basically, it’s the ones who are against you who believe in your power the most.</div><div><br></div><div>In many ways these people who hate you are (ironically) your biggest fans. They admire all you’ve accomplished – and are quite simply jealous.</div><div><br></div><div>3. You have haters because you have risen above them.People who try to pull you down often do so because they see you as above them.</div><div>Perhaps you used to be equals – at about the same level. They feel left behind and trapped at their level of existence – and just don’t like any change in their life.</div><div><br></div><div>They want to put you back in your place so that things remain status quo – instead of accepting your status improvements.</div><div><br></div><div>They’re hating on you to bring you down – to diminish your power and shine – so as to make themselves feel better.</div><div><br></div><div>This reminds me of a terrific Zig Ziglar says: “Don’t be distracted by criticism. Remember the only taste of success some people have is when they take a bite out of you.”</div><div><br></div><div>4. You have haters because you’re going through a bad time – and your uneasiness makes them uneasy.</div><div>They worry your bad luck is contagious. And/or they just don’t want to put in the effort needed to cheer you up and cheer you on.</div><div><br></div><div>Basically…If you want to find out who’s a true friend – screw up or go through a hard time – then see who sticks around.</div><div><br></div><div>5. You have haters because they feel they’re missing out on being around you.</div><div>Perhaps they once rejected you – in some way – for something. Or…in general, they used to feel you weren’t good enough for them. Then you had the audacity to improve yourself and your life! (How dare you! )</div><div>As a result, your haters now feel like they are missing out on the new improved you. They need to still dislike you – so they don’t feel like they are missing out.</div><div><br></div><div>Or maybe you simply are choosing not to socialize with them as often as they want. Or work with them. Or maybe you don’t even know them – and they don’t know how to get to know you – and that bugs them – because they feel they’re missing out being around you.</div><div><br></div><div>6. You have haters because you overcame a shared problem.</div><div>You used to share a problem in common: overeating, or binge drinking, or toxic romantic partners.</div><div><br></div><div>You then found a way to leave the problem behind you – while they are still caught up in the chaos.</div><div><br></div><div>Your newfound peace causes them angst, regret and self loathing.</div><div><br></div><div>7. You have haters because they hate themselves.</div><div>These people are simply not capable of love and connection – with anybody.</div><div><br></div><div>Maybe they are a narcissist, sociopath or have some kind of personality disorder. Perhaps they had a terrible childhood – and thereby hurt people want to hurt people. Or they were raised with hateful, judgmental beliefs.</div><div><br></div><div>As adults, they never awakened to see the wrongness of these limiting beliefs.</div><div><br></div><div>Unfortunately, all of these types of people are mostly comfortable with resentment and drama.</div><div><br></div><div>Basically, happy people don’t hate. And people who walk around hating aren’t happy.</div><div><br></div>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-35891934426152788182021-01-16T18:45:00.001-08:002021-01-16T18:45:55.204-08:00WE DON’T MEET PEOPLE BY ACCIDENT. WE MEET FOR A REASON.<div><b>WE DON’T MEET PEOPLE BY ACCIDENT. WE MEET FOR A REASON.</b></div><div><br></div><div>I believe you don’t meet people by accident – they come into your life for a reason.</div><div>Yes, even the crummy ones.</div><div><br></div><div>If a relationship doesn’t survive the test of time, it doesn’t mean it still wasn’t meant to be.</div><div><br></div><div>Not all encounters with people are supposed to last forever. </div><div><br></div><div>Sometimes the “forever” is not the person – but what we gain from them.</div><div><br></div><div>There’s a synchronicity and purpose for each person you meet. Both our positive encounters with people and the negative, challenging encounters we suffer through.</div><div><br></div><div>Below are some insightful reasons why we don’t meet people by accident.</div><div><br></div><div><br></div><div>We meet people for a reason.</div><div><br></div><div>1.Some people are “bridges.”</div><div>These people are not meant to last for the long road ahead. They are an enjoyable pathway to get us to where we need to go.</div><div><br></div><div>These people are needed to arrive exactly at the time and place you met them – to transport you to the next level of your life journey.</div><div><br></div><div>You meet these people for a reason – even if they are only here for a season.</div><div><br></div><div>2.Some people are “roadblocks” and “re-directors.”</div><div>These people come into your life to delay you – for both little things and big things.</div><div>For example, you might have a conversation with someone – which then delays you and prevents you from getting into a bus accident.</div><div><br></div><div>Or you might spend time with someone – and this time spent creates a “time hiccup” which delays you – so you wind up meeting a new, amazing, romantic partner.</div><div><br></div><div>You might have heard the expression, “Sometimes rejection is a redirection to something better.” Well, that’s what these people do. They might show up as a rejector – but they are a redirector.</div><div><br></div><div>3. Some people are “assignments” and “teachers.”</div><div>Often your tormentors double duty as your mentors.</div><div><br></div><div>They are here to teach you important life lessons – via the process of pain – which helps you to grow who you are.</div><div><br></div><div>Their “crisis pain” creates the “crisis fuel” you need – to motivate a necessary change you didn’t want to put in the effort to make.</div><div><br></div><div>Plus, some people are just straight-up inspiring teachers – who teach you life lessons in a more loving manner.</div><div><br></div><div>4. Some people are “angels”</div><div>These people are here to protect you and remind you to stay safe and stay self loving.</div><div><br></div><div>They are “guardian angels” of some sort.</div><div><br></div><div>Their purpose: Make sure that you do not stray too far from the path you are meant to be on.</div><div><br></div><div>In times of need and desperation they help you – when others are not there for you.</div><div><br></div><div>5. Some people are “guideposts.”</div><div>They represent and symbolize something you want.</div><div><br></div><div>Their purpose: Motivate you to keep pursuing what you want – and stay on track.</div><div><br></div><div>Their presence helps to make sure you stay awake, energized and committed to moving forward on your soul’s true-to-you journey.</div><div><br></div><div>6. Some people are your “tribe.”</div><div>These are the ones who are here to stay the long haul.</div><div><br></div><div>These people are far and few between – but they are the ones who are loyally there for you during tough times and celebratory times.</div><div><br></div><div>They see you clearly and accept you as your “flawesome” self.</div><div><br></div><div>Tribe members support you when you are invisible to others.</div><div><br></div><div>Tribe members root for you with a pure heart – when others might feel competitive or jealous.</div><div><br></div>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-77364440799832986602020-12-10T18:13:00.001-08:002020-12-10T18:13:02.917-08:00Gold vs Equity<div>Gold vs Equity</div><div><br></div><div>If you hear any Investment expert he will always say Gold is not a true investment asset, Its an alternate asset, best hedge against uncertainty, one should not have allocation more than 5% to 8% of his total portfolio etc etc. About equity it is said, it is the best growth asset, will give you best return in long term, maximum allocation should be in equity etc etc.</div><div><br></div><div>All textbook theories do not work in today’s practical world which is becoming impure day by day. How long we will live, talk and believe in old concepts. Why not examine the things in realities of today life. Equity in textbook and in theory is same everywhere but the risk has increased more in India than many developed countries. </div><div><br></div><div>When I look at almost 100 years of gold price movement the maximum fall has been from 1962 to 1964 and then rise again ,1997 to 1998 and then rise again, There has been some more occasions where there has been year to year fall in price but marginal but that has risen quickly back to same old level. Only these are the two periods where it took sone 3-5 years to reach back same old price level. When I compare same with Equity (Sensex movement), year to year variability has been much more. The best of the companies index has been more volatile than Gold. In very long term Sensex might have given higher return that Gold but the same can not be said now in long term (10 years period).</div><div>My concern is not past but future now. Risk in Equity is increasing manifold times vis a vis Gold. The way integrity of Promoters and Management of many companies under doubt, the way Banks yet to learn lesson on proper due diligence on Corporate loans and above all the increasing number of corrupt politicians and their nexus with corrupt promoters clearly being visible I feel risk in equity is increasing. Text book and theoreticians will only talk of economic risk, business risk and market risk. Where some one is talking of integrity risk? This is the biggest risk. Facts and figures are being manipulated to portray as business and market risk. A profit-making company suddenly default where even the best of auditors have been found to have manipulated the financial statements of the company. The law is so weak that from a naked eye one can see company net-worth has depleted but at the same time promoter personal wealth has grown manifold times. Hire the most expensive lawyer, drag the case for decades in court and live king size life is the mantra what many default promoters are following. With universe of quality company reducing choice risk is increasing.</div><div><br></div><div>When I look at Gold there is no such risk as above. Today one has range of products to invest in. From Gold ETF, Gold Fund to Sovereign Gold Bond to Physical Gold to Gold saving schemes. The biggest risk is always of purity but now that is also resolved in whatever way you go. Physical gold is now duly certified one. Investment through financial route takes care of theft, storage etc. With respect to volatility or negative return Gold is less volatile and more stable than Equity. Gold has given stable to good return in mid to long term. Yes, may be if 15, 20 years and above period Equity has given better return but can that be said same going forward? Let’s look at the other risk aspects of Gold more from demand vs supply aspect. Demand has been growing considering existing customary norms (marriage, festivals, gifts etc) catalysed by growing population and their increasing personal income. On supply side it has not been supplemented by discovery of many new Gold mines. So growth in Demand exceeds growth in supply. Based on simple economics principle prices of Gold will have normal growth. It’s the uncertainty factor or flight for safety sentiment factor that accelerates the normal growth in short term ( as seen last 2 years ) which gets corrected later on. So stable return is what one has found in gold in mid to long term.</div><div><br></div><div>One reason as to why there have been so many advocates of equity and not gold is simply because the fortune of many (Fund houses, Stock brokers) is correlated more with equity than Gold. Gold advertisement has always been passive as compared to equity.</div><div> </div><div>Let’s relook this 5% to 8% allocation myth and need to think if allocation to be increased? As a investor one should look to the asset or investment product which is more suitable in mid to long term as an alternative to equity. In all probability there will be correction in Gold price as has appreciated phenomenally last 2 years but I am not saying to look for short term. May be after massive correction it can become an opportunity for investment with higher allocation.</div>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-91403443999490382892020-06-24T20:01:00.000-07:002020-06-24T20:01:06.330-07:00What is the best investment strategy today?<span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">We are amidst uncertain times. </span></span><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></span></div><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">And sailing through such turbulent waters, there is a definite need for an individual to understand that short-term portfolio volatility is naturally inevitable. </span></span></div><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></span></div><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">The stock market and economy, in my opinion, are presently at the bottom and focussed global efforts to fight the ongoing pandemic shall eventually be positive. Until then, the stock market might swing sideways over the near term. </span></span></div><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></span></div><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">Investors should consider investing in staggered manner. I appeal to investors to stay vigilant and not be emotional about profit/loss. An April-like surge shouldn’t be bought into, and a March-type fall shouldn’t be sold into. </span></span></div><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></span></div><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">Volatility will accompany supply and demand shocks like reduced demand for automobiles, real estate, and luxury goods, and increased pressure on the healthcare and e-commerce sectors as the economy continues to recover at its pace. </span></span></div><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></span></div><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">If we look at the broader asset classes available, while bonds and gold have been outperforming since the crash, large-cap equities seem to be on the way back up. Mid and small caps are lagging the larger stocks. Among equities, stocks offering optimum value and low exposure to volatility could be selected from the preferred sectors, for investment like Healthcare and FMCG. </span></span></div><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></span></div><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">Given this backdrop, one may resort to a moderate risk portfolio with a small allocation to sovereign bonds along with a minimal exposure to international markets. The options amongst fixed income could be: </span></span></div><div><ul style="text-align: left;"><li><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">Tax-free bonds from the secondary market </span></span></li><li><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">7.75% Government of India taxable bonds 2018 </span></span></li><li><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">Bank fixed deposits Corporate fixed deposits (pertaining to large institutions) </span></span></li><li><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">PSU Perpetual Bonds like SBI, PNB and BOB </span></span></li><li><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">Mutual Funds: Wherein capital protection is given a premier preference i.e. specific categories such as Short-Term Debt Funds, Arbitrage Funds, along with Overnight and Arbitrage Funds.</span></span></li></ul></div><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></span></div><div><span style="background-color: white;"><span style="color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">An investor must maintain the stance of asset allocation over aggressive or conservative calls. Over the next two years, investors may have to be flexible and active with their investments. It is imperative to liaise with your adviser and chalk out an action plan.</span><br style="box-sizing: border-box; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;" /></span><br /></div>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0Allaudin Bldg Shop No 1, Manchhubhai Road, Malad, Malad East, Mumbai, Maharashtra 400097, India19.1898037 72.8500229-9.1204301361788467 37.6937729 47.500037536178844 108.0062729tag:blogger.com,1999:blog-2498209726761204369.post-24674696916990881832020-06-24T19:52:00.001-07:002020-06-24T19:52:27.421-07:00"This time it's different"- Bear Markets And What We Can Learn From History<h1><strong>April 2020 - The uncertainty and panic surrounding the Covid-19 crisis has led to rollercoaster stock markets. The extreme volatility is worrying for investors and one question I am frequently being asked is “Have we seen the bottom yet?”</strong><br /></h1><div class="w-richtext"><p><strong>At this point the answer to this question is guess work. It all depends on how quickly we are able to contain the virus, how quickly a cure and a vaccine can be found and how quickly regular economic activity can be resumed.<br /></strong></p><p><strong>However, since I first started investing in Emerging Markets back in 1987 we have experienced a number of crises and bear markets including the Asian financial crisis, the subprime mortgage crisis and others. We have also witnessed and profited from the recoveries that followed. While this particular crisis is unique in the scale of the actions taken by governments around the world and their effect on economic activity, as regards to the reactions of stock market investors around the globe there are similarities to previous stock market crashes.<br /></strong></p><p><strong>Some say that this bear market is unique and we have never experienced anything like this before. But it’s important to remember that, as someone once said: “This time is different’ are the most expensive words in the world.” Human behaviour tends to follow predictable patterns because of built-in emotions that make us human.</strong></p><p><strong>So what can we learn from history that will enable us to make better investment decisions in times of crisis? Looking at previous bear markets can provide some indication on what we might expect in the current market environment and going forward. Therefore we took some time to study 11 stock markets (U.S, U.K., Turkey, Korea, China, Taiwan, Brazil, Japan, Thailand, India and Hong Kong ) and their bear markets since the end of the 1980s. We have not included the current bear market since it may not have ended yet.<br /></strong></p><h3><strong>The Global Picture</strong></h3><p><strong>We define a bear market as a decline of 20% or more over a period of at least two months. If this was followed by a 20% rise over a period of at least two months we considered a subsequent fall of 20% or more a new bear market. Because international investors are usually more interested in U.S. Dollar returns we have chosen USD indices rather than the local currency ones.<br /></strong></p><p><strong>Based on these indices the average bear market decline was about 49% across all markets but the declines ranged from a low of 23% to a high of 92%. In terms of the length of time a bear market lasted (from the peak of the bull market to the lowest point in the bear phase) on average over a year, to be precise about 15 months. But the range was from a few months to over three years. As one would expect the Emerging Markets proved more volatile than the developed markets with more bear markets, a higher average decline of 51% and a shorter duration of about one year.<br /></strong></p><p><strong>But let’s have a look at the individual markets. (Please note we are not yet counting the recent market downturn).</strong></p><h3><strong>U.S.</strong></h3><p><strong>Examining the world’s largest market, the U.S., we focused on the S&P 500 Index and found that since 1987 the market experienced only three bear markets, excluding the current one. Those three bear markets averaged a 47% decline and ranged between a low of 34% and a high of 57%. The length of time of the bear markets ranged between three months and three years and averaged 17 months.</strong></p><p><strong><br /></strong></p><figure class="w-richtext-align-center w-richtext-figure-type-image"><img height="225" src="https://assets.website-files.com/5d6927015d8632b70c900879/5eab22b7aa5c362e916b07fe_Slide1.jpeg" width="400" /></figure><h3><strong>U.K.</strong></h3><p><strong>In the U.K. the market (in USD terms) was more volatile than in the U.S. Since 1987 the FTSE 100 Index (USD) experienced six bear markets with declines ranging between 65% and 23% with the average being 38%. Like the U.S. the average length of time was 17 months for the bear markets with a range of 4 months to three years.</strong></p><p><strong></strong></p><figure class="w-richtext-align-center w-richtext-figure-type-image"><img height="225" src="https://assets.website-files.com/5d6927015d8632b70c900879/5eab22d29b1763985a8b6cd2_Slide2.jpeg" width="400" /></figure><h3><strong>Turkey</strong></h3><p><strong>Turning to emerging markets, we found that the Turkish market was highly volatile. This is one reason why this market has been very attractive to some investors who love volatility since it provides them with more opportunities. <br /></strong></p><p><strong>During the time period starting in 1988 the Turkish market experienced 10 bear markets which showed an average decline of 64% with a range of between 81% and 46%. The average length of the bear markets was 14 months but ranged between a high of three years and a low of 4 months.</strong></p><figure class="w-richtext-align-center w-richtext-figure-type-image"><img height="225" src="https://assets.website-files.com/5d6927015d8632b70c900879/5eab22e31874e8c2fd7b63f5_Slide3.jpeg" width="400" /></figure><h3><strong>Korea<br /></strong></h3><p><strong>Next on our list was Korea, another volatile market with nine bear markets. Those bear markets averaged a decline of 49% ranging from a low of 27% to a high of 86%. The average time length of all the bear markets was 17 months and ranged between 4 months and three years.</strong></p><figure class="w-richtext-align-center w-richtext-figure-type-image"><img height="225" src="https://assets.website-files.com/5d6927015d8632b70c900879/5eab22f159ccd84a3a7de96d_Slide4.jpeg" width="400" /></figure><h3><strong>China</strong></h3><p><strong>We found that the China market had a total of eight bear markets averaging a decline of 56% and ranging between a low of 33% to a high of 82%. The average length of time was 14 months with the longest period being more than two years and the shortest five months.</strong></p><figure class="w-richtext-align-center w-richtext-figure-type-image"><img height="225" src="https://assets.website-files.com/5d6927015d8632b70c900879/5eab230be9dd0908b3c7aa2f_Slide5.jpeg" width="400" /></figure><h3><strong>Taiwan<br /></strong></h3><p><strong>We would expect the Taiwan market with its economy so closely tied to China to perform similarly but that was not the case. The Taiwan market proved to be more volatile with 11 bear markets between 1988 and 2019. The average decline was lower than in China with 48% ranging between a high of 80% and a low of 23%. The length of the bear markets ranged between a few months and almost two years with the average being 11 months.</strong></p><figure class="w-richtext-align-center w-richtext-figure-type-image"><img height="225" src="https://assets.website-files.com/5d6927015d8632b70c900879/5eab23302d4612d05fb6bbc3_Slide6.jpeg" width="400" /></figure><h3><strong>Brazil</strong></h3><p><strong>The Brazilian market experienced 11 bear markets during the period averaging 56% decline and ranging between a decline of 75% and 35%. Average time length was 12 months ranging between a few months and almost three years.</strong></p><figure class="w-richtext-align-center w-richtext-figure-type-image"><img height="225" src="https://assets.website-files.com/5d6927015d8632b70c900879/5eab234290cafb4087b6b49e_Slide7.jpeg" width="400" /></figure><h3><strong>India</strong></h3><p><strong>In India, the market experienced nine bear markets averaging a decline of 44% ranging between a high of 71% and a low of 24%. The average time length for the Indian markets was a little over one year.</strong></p><figure class="w-richtext-align-center w-richtext-figure-type-image"><img height="225" src="https://assets.website-files.com/5d6927015d8632b70c900879/5eab234f90cafb9cedb6c79f_Slide8.jpeg" width="400" /></figure><h3><strong>Japan</strong></h3><p><strong>In Japan there were seven bear markets averaging a decline of 42% and ranging between a fall of 62% to 24%. The longest bear market in Japan lasted more than three years and the shortest 9 months with the average at 24 months.</strong></p><figure class="w-richtext-align-center w-richtext-figure-type-image"><img height="225" src="https://assets.website-files.com/5d6927015d8632b70c900879/5eab235e43cd63e3b57fc87e_Slide9.jpeg" width="400" /></figure><h3><strong>Thailand</strong></h3><p><strong>The Thai market was rather volatile with ten bear markets averaging a decline of 46% and ranging between a high fall of 92% and a low of 24%. The average length of time was nine months.</strong></p><figure class="w-richtext-align-center w-richtext-figure-type-image"><img height="225" src="https://assets.website-files.com/5d6927015d8632b70c900879/5eab237559ccd8f96a7e7dbe_Slide10.jpeg" width="400" /></figure><h3><strong>Hong Kong</strong></h3><p><strong>The last market we looked at was the Hong Kong stock market, which witnessed eight bear markets since 1987. The average decline was 45% with a high of 64% and a low of 21%. The average length was 13 months.</strong></p><figure class="w-richtext-align-center w-richtext-figure-type-image"><img height="225" src="https://assets.website-files.com/5d6927015d8632b70c900879/5eab2383453da2bf90912a7e_Slide11.jpeg" width="400" /></figure><h3><strong>What lessons can we draw from history?</strong></h3><p><strong>So what can we learn from the above? We can see that on average bear markets declined by about 50%. The developed markets declined even less on average. In terms of the length, a bear market lasted on average more than a year. Bear markets in emerging markets were on average lasting shorter than bear markets in developed markets. This is important, as I believe the critical question is not only what the bottom is but how long it will last. You will need the cash reserves to continue to gradually buy and hold for what may seem like a long time.<br /></strong></p><p><strong>So at what stage are we now? Most markets went down between 20 and 30% so much less than the average 50% we have seen above. The market swings have been wild on the upside and the downside. As I write this piece the indexes might already have moved higher or lower.<br /></strong></p><p><strong>This kind of volatility is not unusual. If we look at the behaviour of the indices in bear markets we see that this sort of up and down is part of the game. So unfortunately the recent positive movement in many markets does not necessarily mean that we will see a continuous upward trend. There will always be backtracking and corrections along the way. This seems to be confirmed by the historical data from previous bear markets. However, the figures mentioned above are averages and averages are exactly that. The range can be wide. Many bear markets went down far less than 50% so it’s probably a good time to start nibbling but leave enough firepower to continue buying if the markets retreat more.</strong></p><p><strong>The full economic cost of the shutdowns around the world can not be accurately assessed and will, of course, be quite different from one industry to another and one company to another. We merely need to keep our eye on the long term developments and take an optimistic stance: Of the many years since 1987 when I’ve been investing in emerging markets all over the world I can say that there are two conclusions that I can confidently ascribe to: (1) all emerging markets experience bear markets, and (2) all emerging markets recover from those bear markets and experience a bull market. It’s very much like the conclusions of Arnold Toynbee, the famous historian and scholar of civilisations since ancient times. After all the years of study he said that there were two conclusions that he could ascribe to: First, all civilisations rise and, second, all civilisations fall. The wonderful thing about this phenomenon in emerging markets is that the rise and fall of the markets is relatively frequent and the bear markets tend to be shorter than the bull markets. So if you are a patient and disciplined investor you can purchase bargain stocks in the bear phases when everyone else is selling.<br /></strong></p><p><strong>At the rate the coronavirus is spreading globally there might be worse to come but stock markets are starting to price that in. And given the efforts now undertaken by governments, central banks and scientists to contain the crisis I am confident we will see containment followed by a recovery on the horizon but as history teaches us it might not be for another one or two years.</strong></p><p><strong></strong></p></div>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-42769971545751868062020-06-24T19:48:00.003-07:002020-06-24T19:48:38.471-07:00ETF or Index Fund?<span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">Should one invest in an Exchange Traded Fund (ETF) or an index fund? </span><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">The decision depends on the need of the investor. </span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">A corporate treasury who has done derivative trades would prefer an ETF because they get real-time prices to exit and enter. </span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">Retail investors who wish to invest for the long term and are not concerned with intraday prices, would prefer index funds. </span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">Further, if one wants to opt for a systematic investment plan (SIP), then an index fund is the right vehicle, not an ETF. </span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">For first time investors, the simplicity and low-cost structure is a good starting point. Even if they do not have a demat account or a stock broking account, they can access the equity market via an index fund. </span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">Keeping aside retail investors, a few entities such as certain trusts, cooperative societies and some corporate entities, whose existing articles do not permit the operating of a trading and demat account, would opt for index funds. </span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">In the current volatile markets, many institutional treasuries and family offices are taking tactical calls on the equity market by investing via low cost, exit load free index funds. A few suggestions to keep in mind when investing: </span></div><div><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;"><br /></span></div><div><ul style="text-align: left;"><li><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">When considering allocation to passive funds, it need not be to the exclusion of active funds. An investor can invest in both, active and passive funds. Don’t view passive funds as a competing strategy but rather, a complementary strategy. </span></li><li><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">Investors should avoid passive funds based on mid- and small-cap themes. It is in these segments, which is often under-researched, that the potential to outperform the benchmark or generate alpha exists. Mid and small cap allocation can be in active funds. </span></li><li><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">In ETFs, there is often a difference between the fair value of an ETF and the prices quoted on the exchanges. This is all the more evident if there is inadequate liquidity on the exchange. Hence investors should review the past trading volumes of an ETF before investing in it. </span></li><li><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">Investors can also easily check the real-time INAV (indicative NAV) before executing a trade on the exchange – the INAV which indicates a real-time fair value per unit is mandatorily published on the website of the AMC. If a retail investor wants to exit and if he/she doesn’t get the fair value, then the overall investment experience is bad. Hence investors should look for ETFs where the divergence between INAV and the price traded is minimum. </span></li><li><span style="background-color: white; color: #333333; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 14px;">In an ETF, investors need to look beyond the total expense ratio, or TER. They must look at the total cost of ownership, or TCO. This includes all expenses (brokerage, taxes paid on buy and sell transactions on the stock exchange, annual demat account charges, bid/offer spread, etc.).</span></li></ul></div>Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0Allaudin Bldg Shop No 1, Manchhubhai Road, Malad, Malad East, Mumbai, Maharashtra 400097, India19.1898037 72.8500229-9.1204301361788467 37.6937729 47.500037536178844 108.0062729tag:blogger.com,1999:blog-2498209726761204369.post-1689313669641119822019-12-28T21:32:00.003-08:002019-12-28T21:32:52.427-08:00Smart Investing in your child's future<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Whether you’re putting money away for college or a rainy day, here’s a guide to making sure it grows.</span></h2>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="line-height: 21px;">When Tejal, 28, and her husband, Gaurav Mehta, 29, found out they were expecting their first child in March, they quickly began wondering how, and if, they should start saving for future college costs. "Both of our parents were able to pay for our undergrad education, so we probably want to do a PPF & NSC," says Tejal, adding that they also want to put money away for general expenses, such as future education and weddings.</span><span style="line-height: 21px;"><br /></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Until recently, the couple, who lives outside of Mumbai, had saved for two purposes: retirement and a house down payment. Tejal, a Primary School Teacher, and Gaurav, an engineer, put most of those savings into the Fixed Deposit's, where it's taken a beating of Inflation. That leaves them wondering if they should put their child-related savings into safer spots, which might not pay much of a return<span style="line-height: 1.5;"> </span><span style="line-height: 1.5;">or consider risky assets</span><span style="line-height: 1.5;">.</span></span></div>
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<span style="line-height: 1.5;"><span style="font-family: "arial" , "helvetica" , sans-serif;">"I don't want to risk too much up and down," says Tejal.</span></span></div>
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<b><span style="font-family: "arial" , "helvetica" , sans-serif;">So what should new parents like Tejal and Gaurav do with their savings? </span></b></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">It turns out that there are some new strategies that work better than the traditional methods of saving.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">The old methods include opening a Minor's PPF account, <span style="color: #3e3e3e; line-height: 30px;">It is one of the favorite investment options of a lot of experts. The primary reason for recommending this is the impeccable EEE feature. Moreover, the tenure or maturity period of this product i.e. 15 years is so very apt in terms of investment for child’s education but while selecting such option primary</span><span style="color: #3e3e3e; line-height: 30px;"> intention is security to capital and interest. </span><span style="color: #3e3e3e; line-height: 30px;">This Accounts </span><span style="line-height: 1.5;"> automatically transfers into the child's name when he or she becomes an adult (18 Years). </span></span></div>
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<span style="line-height: 1.5;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The downside is that because the money automatically transfers, parents have no control over the funds after the child reaches that age, which means the child could spend it on anything. Similarly, buying a NSC from the Postal Department, which was once a favorite way of putting money aside for newborns, carries such a low interest rate today that there is little chance of keeping up with inflation, especially over the long-term. Fixed deposit present the same problem.</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Here are few new, smart ways to save instead:</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong style="border: 0px; color: #3e3e3e; font-stretch: inherit; line-height: 30px; margin: 0px; outline: none; padding: 0px;">1. </strong><span style="border: 0px; color: #3e3e3e; font-stretch: inherit; line-height: 30px; margin: 0px; outline: none; padding: 0px;"><b>Risk cover to protect future goals</b></span><span style="line-height: 1.5;"><b>:</b> </span><span style="color: #3e3e3e;"><span style="line-height: 30px;">You should take proper term insurance cover for yourself to secure your child against any unforeseen event. Though these things do happen, but the probability or chances of happening such events would be low or cannot be quantified. “It is advisable to have a risk cover in order to reduce or avoid the financial impact on the lives of your dependent in cased of happening of unforeseen events. Thus one should make sure that the future costs related to your child’s requirement are adequately covered in this insurance. Three important expenses to be noted while going for a cover 1) Education 2)Marriage 3) living expenses till they become adult.”</span></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong style="line-height: 1.5;">2. Mutual Funds Child's Funds</strong><span style="color: #222222;"><span style="line-height: 1.5;">: According to my personal survey, 67 percent of adults have never heard of such plan, even though financial advisors agree that it's the smartest way to save for college Education and </span><span style="line-height: 24px;">child's</span><span style="line-height: 1.5;"> </span><span style="line-height: 24px;">marriage</span><span style="line-height: 1.5;"> . The funds, which are allow parents to invest money that then grows tax-free and remains tax-free as per current Law.</span></span></span></div>
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<span style="line-height: 1.5;"><span style="font-family: "arial" , "helvetica" , sans-serif;">"Depending on the age [of your child], you will be more aggressive, and then become more conservative as your child gets older,". you can select funds SIP (Systematic Investment Plan) and auto top up option. </span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="background-color: #f4f7f9; color: #333333; line-height: normal;"><b>For parents who do not wish to create an exclusive portfolio for their children, fund houses have an alternative in terms of children’s plans which are balanced Funds(hybrid Plans). They have been designed in such a way that parents can decide on the different options depending on their investment horizon.</b></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="line-height: 1.5;"><strong>3. </strong></span><strong style="border: 0px; color: #3e3e3e; font-stretch: inherit; line-height: 30px; margin: 0px; outline: none; padding: 0px;">Equity Mutual Funds: </strong><span style="color: #3e3e3e; line-height: 30px;">This ranks right up there in terms of priority. There are two reasons for this – longer time frame (10-15 years) and the mode of investment available (SIP)., a monthly SIP of Rs 10,000 in equity mutual funds for 18 years can fetch you Rs 66 lakh, assuming a return of 12 per cent per annum. Even considering an inflation of 6 per annum, this amount would more than suffice. However, the key here is not the amount invested but the time given. Power of compounding has always been understated. Equity funds have a history of generating 12-15 per cent per annum returns. And SIP, of course, is considered to be one of the best ways to average your cost over the long term.</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">For a time span of ten years or longer, "Put it in a moderate aggressive investment. Over a ten-year period, you can be more aggressive." The money can then be used for college, living expenses, a wedding, or anything else.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong>4. A dedicated child's savings account:</strong> In today's market, savings accounts carry relatively low interest rates, but they come with other advantages, including the opportunity to teach children about money and savings as they get older. This savings account, in the child's name or the parent's name, can supplement the other, more aggressive investing strategies above. Some banks, offer teaching materials along with kids' savings accounts, and waive fees for low balances as well as requirements for minimum account balances.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">"Banks were charging exorbitant fees for parents for zero balance savings account so we created the kids' savings account," this also helps children learn about money as they start to save and invest.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong style="border: 0px; font-stretch: inherit; font-style: inherit; font-variant: inherit; line-height: inherit; margin: 0px; outline: none; padding: 0px;">5. Invest in Gold (Long Term): </strong>Gold acts as a hedge against equity or equity mutual funds and during volatile times. Gold ensures your risks in the financial markets are hedged. “Investments in gold should be either through ETF, gold mutual funds or E Gold. It is advisable to avoid physical investments in gold in order to reduce the risk of storage and the cost associated with the physical holding. Also the prices of the paper gold is derived based on the current gold prices in the market and hence it is as similar to buying or investing in a Gold fund.”</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">I think, “Without gold, a portfolio is never complete for an Indian consumer. It has always been the favorite investment option. Events like marriage can be called as mini festivals of gold. If gold is such an unavoidable metal, why not start saving for it right away! I believe the best way to do it is through Gold ETFs and Gold Funds. However, make sure this investment does not exceed 10-15 per cent of your overall portfolio or only as much as you would need for the goal.”</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span style="background-color: #f4f7f9; color: #333333; line-height: normal;">It is high time that you make provision for your children’s education and start investing for the same. From the mutual fund industry you can consider either of the two options mentioned above.</span></b></span></div>
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br style="background-color: #f4f7f9; color: #333333; line-height: normal; margin: 0px; padding: 0px;" /><span style="color: #222222; font-weight: normal; line-height: 1.5;">Tejal and Gaurav</span></span><span style="color: #222222; font-family: arial, helvetica, sans-serif; font-weight: normal; line-height: 1.5;"> Mehta say they will probably start with the </span><span style="color: #222222; font-family: arial, helvetica, sans-serif; font-weight: normal; line-height: 1.5;">Mutual Funds Child's Funds</span><span style="color: #222222; font-family: arial, helvetica, sans-serif; font-weight: normal; line-height: 1.5;"> with SIP and expand their savings from there. Meanwhile, they are trying to figure out how to find savings in their budget, even after their baby arrives. Says Tejal: "We started talking about cutting back on vacations, traveling, and going out … Then we can have more money for the baby's needs now."</span></div>
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<b><span style="color: #333399;"> Shop No.9,Param Ratan Bldg,Jakaria Road,Malad West,Mumbai - 400064.<br /> Tel:28891775/28816101/28828756/28823279. CELL:9930444099 </span></b><b><span style="color: #333399;"><a fg_scanned="1" href="http://www.tejasconsultancy.co.in/" target="_blank">www.tejasconsultancy.co.in</a> | E-mail Us: <a href="mailto:ritesh@tejasconsultancy.co.in" target="_blank">ritesh@tejasconsultancy.co.in</a></span></b></div>
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<span style="color: #00407f;"><span style="font-size: xx-small;">This POST is addressed to and intended for the investors of Ritesh Sheth & Tejas Consultancy only and is not spam. You are advised to contact Ritesh Sheth & Tejas Consultancy to clarify any issue that you may have with regards to any information contained in this emailer.The views are personal. Ritesh Sheth & Family or Tejas Consultancy does not guarantee the accuracy, adequacy or completeness of any information in this emailer and is not responsible for any errors or omissions or for results obtained from the use of such information. Ritesh Sheth & Family or Tejas Consultancy does not have any liability to any person on account of the use of information provided herein and the said information is provided on a best effort basis. In case of investments in any of our schemes, please read the offer documents carefully before investing.<br />To unsubscribe from future mailer Please e-mail: </span><span style="font-size: xx-small;"><a href="mailto:riteshdsheth@gmail.com" target="_blank">info@tejasconsultancy..co.in</a></span></span></div>
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Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-31633257472380789212019-12-28T21:29:00.002-08:002020-06-24T19:53:30.749-07:00Be careful while buying that ‘cheap’ health insurance policy <div dir="ltr" style="text-align: left;" trbidi="on">
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Be careful while buying that ‘cheap’ health insurance policy offered by your bank</h1>
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Apart from bancassurance, banks also take group insurance cover for its staff and customers, which may be availed by account holders by paying a nominal premium.</h2>
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<span style="font-family: Arial, sans-serif; font-size: 16px;">Almost all general insurance companies and standalone health insurance companies have tie-ups with one or more banks to promote their products. Apart from bancassurance, banks also take group insurance cover for its staff and customers, which may be availed by account holders by paying a nominal premium – much less than the premium amount of personal health insurance policies.</span></div>
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<span style="font-family: Arial, sans-serif; font-size: 16px;">Not only lower premium, but such group health insurance policies also offer some additional benefits like maternity cover, lower or no waiting period etc. So, definitely such group policies look lucrative in comparison to a personal health insurance cover.</span></div>
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But wait, inspect the terms and conditions carefully before you rush to replace your personal health insurance cover with the cheaper group policy offered by your banker.</div>
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<span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 0px; box-sizing: border-box; font-weight: 700; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">This is because, the group health covers have the following demerits over personal health insurance cover:</span></div>
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Not a permanent cover</h3>
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<span style="font-family: Arial, sans-serif; font-size: 16px;">You may avail the benefits of such a group insurance cover as long as you are a customer of the bank. If you change your bank, you will lose the cover. Even if the bank ends contract with the insurer, you will lose your cover.</span></div>
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No claim bonus not available</h3>
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Unlike personal health insurance policy, where you get a bonus either in the form of lower premium or as an additional cover over the basic sum insured for every claim-free year, there will be no such benefits for group cover. The enhanced bonus cover acquired during the disease-free years may prove very beneficial at the time of hospitalisation, when you fall sick.</div>
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No life-long renewal</h3>
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The greatest demerit of the group health cover provided by the banks is that almost all such covers may be renewed up to a certain age, say 80 years. So, during the old age, when you would need the medical care most, you may be left out in the cold with no health insurance cover.</div>
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Moreover, at old age, you may get only limited cover and that too with several clauses that would enhance your out-of-pocket expenses even if the cost of hospitalisation is within the limit of insurance cover.</div>
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So, don’t go for the cheaper premium, but evaluate the usefulness of the health cover when you need it the most.</div>
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You may take the group cover along with your personal health insurance policy as an additional cover to enjoy the extra benefits like maternity cover without much waiting period, if needed. But you can’t completely depend on such group cover and taking personal health insurance policy for yourself and your family is a must.</div>
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<b><span style="background-color: white; color: #333399;"> Shop No.9,Param Ratan Bldg,Jakaria Road,Malad West,Mumbai - 400064.<br /> Tel:28891775/28816101/28828756/28823279. CELL:9930444099 </span></b><b><span style="background-color: white; color: #333399;"><a fg_scanned="1" href="http://www.tejasconsultancy.co.in/" target="_blank">www.tejasconsultancy.co.in</a> | E-mail Us: <a href="mailto:ritesh@tejasconsultancy.co.in" target="_blank">ritesh@tejasconsultancy.co.in</a></span></b></div>
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<span style="color: #00407f; font-size: xx-small;">Disclaimer:</span></div>
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<span style="color: #00407f;"><span style="font-size: xx-small;">This Ppst is addressed to and intended for the investors of Ritesh Sheth & Tejas Consultancy only and is not spam. You are advised to contact Ritesh Sheth & Tejas Consultancy to clarify any issue that you may have with regards to any information contained in this emailer.The views are personal. Ritesh Sheth & Family or Tejas Consultancy does not guarantee the accuracy, adequacy or completeness of any information in this emailer and is not responsible for any errors or omissions or for results obtained from the use of such information. Ritesh Sheth & Family or Tejas Consultancy does not have any liability to any person on account of the use of information provided herein and the said information is provided on a best effort basis. In case of investments in any of our schemes, please read the offer documents carefully before investing.<br />To unsubscribe from future mailer Please e-mail: </span><span style="font-size: xx-small;"><a href="mailto:riteshdsheth@gmail.com" target="_blank">info@tejasconsultancy..co.in</a></span></span></div>
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Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0Allaudin Bldg Shop No 1, Manchhubhai Road, Malad, Malad East, Mumbai, Maharashtra 400097, India19.1898037 72.8500229-9.1204301361788467 37.6937729 47.500037536178844 108.0062729tag:blogger.com,1999:blog-2498209726761204369.post-53400019121732700312019-12-10T06:40:00.002-08:002019-12-10T06:40:21.014-08:00I Call it longer pit-stop<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="background-color: transparent;"><span style="color: #333333; font-family: verdana, geneva; font-size: large;">I Call it longer pit-stop.....</span></span></div>
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<span style="color: #333333; font-family: verdana, geneva;">Rallying on the record breaking FII flows, Indian markets have scaled new highs in the month of November even as Indian macro data continues to disappoint, both IIP & GDP numbers.</span></div>
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<span style="font-family: verdana, geneva; font-size: small;">I sense that the stronger FII flows and catch up in corporate earnings that is underway, could probably give the markets a <strong style="border: 0px; font-family: inherit; font-size: 16px; line-height: 1.5; margin: 0px; padding: 0px;">longer pit-stop </strong>than anticipated earlier<strong style="border: 0px; font-family: inherit; font-size: 16px; line-height: 1.5; margin: 0px; padding: 0px;">. </strong>And I am closely watching.</span></div>
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<span style="font-family: verdana, geneva; font-size: small;">While global economic data has not been deteriorating further, policy stance stays more than accommodating thus leading to a congenial situation for financial markets. Our medium-term expectations are based on continuation of policy support with a significant number of central banks turning dovish and cutting rates, prospects of fiscal support in select economies, cyclical uptick in manufacturing, and forward movement in US-China trade discussions.</span></div>
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<span style="font-family: verdana, geneva; font-size: small;">On the domestic front, some sectors that have been contributing to large pools of losses appear to be on the mend now with corporate banks and telecom being two of the largest. However, a delay in the revival of domestic demand, a further slowdown in global economic activity and geopolitical tensions are downside risks.</span></div>
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<span style="font-family: verdana, geneva; font-size: small;">On the markets front, the recent run-up has been very strong, but has also taken valuations closer to +2 standard deviation mark. With valuations once again hovering near its peak, we may see profit booking soon.</span></div>
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<span style="font-family: verdana, geneva; font-size: small;">I believe that any declines hereon shall be seen as opportunities to invest for better returns in the next 2-3 years. As we have highlighted earlier, I continue to believe that mid and small cap provide relatively better entry points than their larger counterparts for medium to long term investments.</span></div>
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<span style="font-family: verdana, geneva; font-size: small;">On the Fixed income front, RBI decided to keep the policy repo rate unchanged and continue with the accommodative stance 'as long as it is necessary to revive growth’, while ensuring that inflation remains within the targeted range. Given the evolving growth-inflation dynamics, the MPC felt it appropriate to take a pause at this juncture.</span></div>
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<span style="font-family: verdana, geneva; font-size: small;">The bond yields have strengthened post corporate tax cut and have remained range-bound with a steepening bias. Government fiscal is under stress with tax revenues falling short, even as government tries to meet budget expenditure targets to support growth. This kind of coordinated response has increased uncertainty in the bond duration space.</span></div>
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<span style="font-family: verdana, geneva; font-size: small;">I continue to believe that the term premium may remain elevated in the near term and any exposure to debt markets should be taken through short term to medium term debt funds with a high-quality portfolio.</span></div>
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<span style="color: #222222; font-family: Calibri, Helvetica, sans-serif; font-size: 18px;">Happy Investing!</span> </div>
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<span style="color: #222222; font-family: Calibri, Helvetica, sans-serif; font-size: 18px;">Thanks a lot for your time and allowing us to stay in touch with you. All of us at Tejas Consultancy are grateful for the opportunity.</span> <span style="font-family: verdana, geneva; font-size: small;"><br /></span></div>
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<b style="color: #222222;"><span style="color: #333399;"> Allaudin Bldg Shop No 1,Manchubhai Road,Malad East,Mumbai - 400097.</span></b></div>
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<b><span style="background-color: white; color: #333399;"> Shop No.9,Param Ratan Bldg,Jakaria Road,Malad West,Mumbai - 400064.<br /> Tel:28891775/28816101/<wbr></wbr>28828756/28823279. CELL:9930444099 </span></b><b><span style="background-color: white; color: #333399;"><a data-saferedirecturl="https://www.google.com/url?q=http://www.tejasconsultancy.co.in&source=gmail&ust=1576075066459000&usg=AFQjCNGH_eNFMIbQfSxNUbcXdB6jAz1imw" fg_scanned="1" href="http://www.tejasconsultancy.co.in/" style="color: #1155cc;" target="_blank">www.tejasconsultancy.co.in</a> | E-mail Us: <a href="mailto:ritesh@tejasconsultancy.co.in" style="color: #1155cc;" target="_blank">ritesh@tejasconsultancy.<wbr></wbr>co.in</a></span></b></div>
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Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-69744753629071659282019-10-11T01:02:00.001-07:002019-10-11T01:02:48.337-07:00I Call it A New Beginning!<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Calibri,Helvetica,sans-serif; font-size: 18px; text-align: justify;">In the midst of the festive season, we at Tejas Consultancy, wish you a very Happy Dussehra on this auspicious occasion.</span><div>
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<span style="font-family: Calibri,Helvetica,sans-serif; font-size: 18px;">On this day eons back, the Pandavas completed their exile and ventured for a new beginning. Well, India Inc.’s profitably too which was in an exile for the last few years is set to make a new beginning with the slew of measures that the Government has begun to undertake.</span></div>
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<span style="font-family: Calibri,Helvetica,sans-serif; font-size: 18px;">With the much needed fiscal push, India Inc. has got a shot in the arm as corporate earnings can now push higher due to the corporate tax cuts. The intent shown by the government will definitely increase confidence within India Inc. and shall lead to </span><b style="font-family: Calibri,Helvetica,sans-serif; font-size: 18px;">‘A New Beginning!’.</b></div>
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<span style="font-family: Calibri,Helvetica,sans-serif; font-size: 18px;">On the global front, the slowdown has become much evident and corrective measures have already been taken by major economies and we believe more monetary and fiscal measures are to be followed. However, Brexit and US-China trade talks would be the key events to watch for, in the months ahead.</span></div>
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<span style="font-family: Calibri,Helvetica,sans-serif; font-size: 18px;">On the domestic front, the Indian government with the help of RBI are trying to bring back the economy on track. A direct tax code with a significant simplification and lowering of personal taxes will go a long way to boost the demand, triggered by likely increase in consumer spending. While these tax cuts will help in boost the private sector, a focused approach on NPA resolution and bank recapitalization are needed to kick start credit growth as well.</span></div>
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<span style="font-family: Calibri,Helvetica,sans-serif; font-size: 18px;">With the fiscal stimulus announcement, we have increased our allocation to 100% in equities in our Aggressive portfolio. In the Large Cap space, current valuations are reasonable if not cheap and any incremental returns will only come from earnings growth which is underway. As to the Mid & Small Cap Space, the price and time correction over the last 18 months have rendered them relatively cheap vis-à-vis Large Caps. In the past, whenever the relative performance or valuations of Mid & Small Caps have touched the bottom extreme of the Pattern</span><span style="font-family: Calibri,Helvetica,sans-serif; font-size: 18px;">, the journey ahead for them has been very fruitful.</span></div>
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<span style="font-family: Calibri,Helvetica,sans-serif; font-size: 18px;">In the Fixed Income space, RBI has announced a fourth consecutive rate cut, totaling a 135 bps reduction in 2019 and maintained its ‘accommodative stance’ with a dovish tone. Going forward, factors such as Inflation, crude oil prices, fiscal pressure, and global yields would drive the movement in interest rates.</span></div>
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<span style="font-family: Calibri,Helvetica,sans-serif; font-size: 18px;">We believe that the yield curve may steepen, due to the large increase in gross market borrowings in FY20 over FY19 along with low demand for government bonds due to excess SLR in the banking system. This could put upward pressure on yields at the longer end. Hence, we believe that exposure to debt markets should be taken through the short term to medium term debt funds with a high-quality portfolio.</span></div>
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<span style="font-family: Calibri, Helvetica, sans-serif;"><span style="font-size: 18px;">As per My understanding we should add following schemes or add money if you already own this schemes. </span></span></div>
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Mutual Fund Schemes </div>
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1. ICICI PRUDENTIAL BLUECHIP FUND</div>
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2. KOTAK SMALLCAP FUND</div>
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3. IDFC Sterling Value Fund </div>
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4. L&T Emerging Businesses Fund </div>
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5. Motilal Oswal Multicap 35 Fund </div>
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6. Nippon india Multicap Fund</div>
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7.
Kotak Standard Multi-Cap Fund</div>
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8. Tata Equity P/E Fund </div>
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9. Edelweiss equity opportunities fund</div>
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10. Franklin india focused equity fund</div>
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<span style="font-family: Calibri,Helvetica,sans-serif; font-size: 18px; text-align: start;">Happy Investing!</span> </div>
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<span style="font-family: Calibri,Helvetica,sans-serif; font-size: 18px; text-align: start;">Thanks a lot for your time and allowing us to stay in touch with you. All of us at Tejas Consultancy are grateful for the opportunity.</span></div>
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<span style="font-family: Calibri,Helvetica,sans-serif; font-size: 18px; text-align: start;">Please Call us for any assistance you need for your Investment and Insurance needs.</span></div>
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<b style="color: #222222;"><span style="color: #333399;"> Allaudin Bldg Shop No 1,Manchubhai Road,Malad East,Mumbai - 400097.</span></b></div>
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<b><span style="background-color: white; color: #333399;"> Shop No.9,Param Ratan Bldg,Jakaria Road,Malad West,Mumbai - 400064.<br /> Tel:28891775/28816101/<wbr></wbr>28828756/28823279. CELL:9930444099 </span></b><b><span style="background-color: white; color: #333399;"><a data-saferedirecturl="https://www.google.com/url?q=http://www.tejasconsultancy.co.in&source=gmail&ust=1570867241350000&usg=AFQjCNHP9QKjW4upO9W3MqBJzSXKNRMuKQ" href="http://www.tejasconsultancy.co.in/" target="_blank">www.tejasconsultancy.co.in</a> | E-mail Us: <a href="mailto:ritesh@tejasconsultancy.co.in" target="_blank">ritesh@tejasconsultancy.<wbr></wbr>co.in</a></span></b></div>
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Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-68301838028087480252017-05-04T19:09:00.000-07:002017-05-04T19:09:39.979-07:00 Better financial year of FY 17.<div dir="ltr" style="text-align: left;" trbidi="on">
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All of us at Tejas Consultancy wish you a better financial year of FY 17. I sincerely hope that the subdued expectations all around has room for positive surprises due to the many small things which are falling in place. </div>
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key calls for the markets in FY 17 are: </div>
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1.A range bound equity market at best.<br />
2.Long short /Absolute return seeking strategies will continue to outperform relative return strategies<br />
3.Muted returns from duration play on Fixed Income<br />
4.Higher Gold prices in rupee terms<br />
5.Stagnant residential real estate prices<br />
6.An increase in commercial rental yields<br />
7.Stronger dollar and weaker EM currencies<br />
8.Stagnant to lower commodity prices </div>
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We hope that we are way off the mark on all the above counts and that can only mean that </div>
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1.Global demand has revived even despite its current low probability<br />
2.Domestic earnings revival is led by rural demand and the 7th pay commission effect and outweigh the possible slack on the exports side of the economy<br />
3.Inflation collapses and / or Government meets with its fiscal deficits leading to higher bond prices.<br />
4.Personal savings revive enough to bring forth household leverage, that’s required to revive the demand for real estate. </div>
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Going forward, under stable market conditions we expect the our recommended portfolio to continue its out performance given the higher earnings growth differential. </div>
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Request you to pass it on whosever can benefit from it. </div>
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Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-85383308273729276082017-05-04T19:05:00.000-07:002017-05-04T19:05:48.892-07:00India's digital opportunity to overtake China<div dir="ltr" style="text-align: left;" trbidi="on">
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India's digital opportunity to overtake China</h3>
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<a href="http://www.economist.com/news/finance-and-economics/21717393-advanced-technology-backward-banks-and-soaring-wealth-make-china-leader" style="color: #888888; text-decoration: none;">The Economist</a> has an excellent story about the spectacular growth of China's online financial intermediation market,</div>
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<b>By just about any measure of size, China is the world’s leader in fintech. It is far and away the biggest market for digital payments, accounting for nearly half of the global total. It is dominant in online lending, occupying three-quarters of the global market. A ranking of the world’s most innovative fintech firms gave Chinese companies four of the top five slots last year. The largest Chinese fintech company, Ant Financial, has been valued at about $60bn, on a par with UBS, Switzerland’s biggest bank... Its fintech giants have shown what can be done. For emerging markets, the lesson is that with the right technology, it is possible to leapfrog to new forms of banking. For developed markets, China offers a vision of the grand consolidation—apps that combine payments, lending and investment—that the future should hold... </b><b>For about 425m Chinese, or 65% of all mobile users, phones act as wallets, the world’s highest penetration rate, according to China’s ministry of industry and information technology. Mobile payments hit 38trn yuan ($5.5trn) last year, up from next to nothing five years earlier—and more than 50 times the size of the American market.</b></blockquote>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgfLtVzy3gpM4Wp1NL6Z4Bl5zXVtOjdaIgHhFt8cYBPZLrmLj048t2ezmPfNrGX1JpA4TBuQqsrR8rlnsHJysCBxBDSlZG8xvZfIrd9LRd6Z6y1WIyliYCTNFBasNO-aUZPbP613Jpj1K2/s1600/Screen+Shot+2017-02-26+at+12.06.17.png" imageanchor="1" style="color: #888888; margin-left: 1em; margin-right: 1em; text-decoration: none;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgfLtVzy3gpM4Wp1NL6Z4Bl5zXVtOjdaIgHhFt8cYBPZLrmLj048t2ezmPfNrGX1JpA4TBuQqsrR8rlnsHJysCBxBDSlZG8xvZfIrd9LRd6Z6y1WIyliYCTNFBasNO-aUZPbP613Jpj1K2/s400/Screen+Shot+2017-02-26+at+12.06.17.png" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 1px solid rgb(238, 238, 238); box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; padding: 5px; position: relative;" width="387" /></a></div>
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This carries the greatest relevance for India, where digital transactions market may be just about to explode. And it carries one advantage which even China cannot boast of, Aadhaar, the biometric identity which already covers more than a billion Indians.</div>
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I can foresee the potential of five disruptions in the retail payments market from the initiatives already underway. </div>
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1. The RuPay payment gateway has, as I blogged earlier, the potential to break the oligopolistic stranglehold of Visa, MasterCard, and Amex on the payment gateways market. </div>
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2. The <a href="http://www.npci.org.in/UPI_Background.aspx" style="color: #888888; text-decoration: none;">Unified Payment Interface </a>(UPI) supports immediate transfer of money between different bank accounts. It addresses the challenge of inter-operability among different banks and merges several banking features, seamless fund routing and merchant payments into one interface. It also dispenses with smart card based validation and provides competition for payment wallet services like PayTm. Users can download the respective bank UPI app. </div>
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3. The <a href="http://indianexpress.com/article/explained/bhim-app-payments-cashless-online-transaction-narendra-modi-how-it-works-shortcomings-4456264/" style="color: #888888; text-decoration: none;">BHIM app</a> is a <a href="https://upipayments.co.in/bhim-app-download-features-use/" style="color: #888888; text-decoration: none;">digital payments app</a> based on UPI that is promoted by the National Payment Corporation of India (NPCI), and has the potential to disrupt the market for e-wallet services. It uses the Aadhaar number for transacting over the UPI, it also has the potential of becoming the go-to immediate payment interface, <a href="https://yourstory.com/2017/02/bhim-app/" style="color: #888888; text-decoration: none;">eliminating the need</a> to have individual bank UPI apps. It overcomes the limitation of existing e-wallet providers who require transferring money into the wallet and closed loop nature of transactions (transfers only from one wallet account to another), and offers the same set of services by directly intermediating with your existing bank account. </div>
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4. The <a href="http://npci.org.in/AEPSOverview.aspx" style="color: #888888; text-decoration: none;">Aadhaar Enabled Payment System</a> (AEPS) potentially dispenses with the the need for intermediaries like wallet service providers by using Aadhaar to achieve single-click two factor authentication. </div>
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5. The <a href="http://trak.in/tags/business/2017/02/21/bharat-qr-code-facts/" style="color: #888888; text-decoration: none;">BharatQR Code</a> is the world's only interoperable payment system across merchant outlets. It creates a single national standard for all QRCode based transactions. This interoperability means that it can potentially dispense with Point of Sales terminals. The BHIM app supports BharatQR code based transactions, thereby raising the possibility of all kinds of immediate payment transactions with Aadhaar validation, without any intermediary service providers between the bank and the user. </div>
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In countries where trust in online payment mechanisms and private financial intermediaries is a major constraint, government intervention may be useful to catalyse the market. A rural user is far more likely to trust a government sponsored financial intermediation than a similar service offered by a private provider. The challenge for the government is to understand when and where to step back and let the market take-over. </div>
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Interestingly, all these are focussed on the payments side. Unlike the Chinese market, none of these innovations cover the lending and investing parts of the intermediation market. That may be the next frontier. And this again from China assumes significance for India's financial inclusion campaign,<br />
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<b>Until recently, Chinese savers faced two extreme options for managing their money: stash it in bank accounts, where interest rates were artificially low, but it was as safe as the Communist Party; or punt on the stockmarket, about as safe as playing baccarat in a casino in Macau. In the middle there was nothing... The biggest breakthrough was the launch of an online fund, Yu'e Bao, by Alibaba in 2013... promoted as a way for people to earn interest on the cash in their e-commerce accounts... Invested through a money-market fund... this meant that savers could get rates that were more than three percentage points higher than those banks offered. And risk was minimal, because their cash was still ultimately in the hands of banks. Yu’e Bao attracted 185m customers within 18 months, giving it 600bn yuan of assets under management... In 2014 Tencent launched Licaitong, an online fund platform linked to WeChat. Within a year, it had 100bn yuan under management... In the West people generally need deep pockets before they can afford to buy into products such as money-market funds. In China all it takes is a smartphone and an initial buy-in of as little as 1 yuan. WeChat, with 800m active accounts, and Ant, with 400m, can afford to be generous.</b></blockquote>
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Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-63770285979967506232017-03-28T05:02:00.000-07:002017-03-28T05:03:52.170-07:00India's campaign finance reform journey<div dir="ltr" style="text-align: left;" trbidi="on">
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India's campaign finance reform journey</h3>
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The recently passed amendments to the Finance Bill 2017 by the Lower House of the Indian Parliament includes a provision to remove the caps on undisclosed donations to political parties. Critics are right in questioning the wisdom of pushing through such an important decision as part of a Money Bill. And it is most likely that this would be litigated and stuck down by the Supreme Court. </div>
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But their critique that this would weaken campaign finance reforms is arguable. In fact, I am inclined to argue that lifting the cap on corporate donations may be a prudent compromise, though the government may have ended up overreaching with its other elements. </div>
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The conventional wisdom on campaign finance reforms advocate a simultaneous pursuit of transparency (limiting cash donations), competition (capping of donations), and deter cronyism (making their disclosure mandatory). </div>
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While logically unexceptionable and intellectually laudable, I am inclined to believe that this is impractical given the political economy and the scale of transformation that it would entail. Given the prevailing nature and scale of campaign financing, the massive gap between the actual and permissible amounts, and the difficulty of cobbling political consensus on such issues, it is surely unrealistic to expect a simultaneous targeting of all dimensions with one comprehensive strategy. </div>
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A more realistic approach to addressing campaign finance may be to take a few steps at a time. Between the three, it may be prudent to address transparency initially by squeezing out channels of cash donations and ensuring that only clean money enters the political arena. While the decision to dispense with the cap on donations may actually be a practical response, the waiver of disclosure requirements is a retrograde step. The latter becomes all the more so since maintaining the current disclosure requirements would have been politically feasible. </div>
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Instead of the current proposal, it would have been more appropriate and practical to have a much higher cap than the (now amended) 7.5 per cent of the average net profit over the past three years and either retain the current disclosure requirement or link disclosure to the revised cap. A progressive reduction of that cap would then have become the natural phasing of campaign finance reforms. Now, anonymous corporate donations have been given a complete free pass. And future reforms have to battle insertion of the caps on both donations and disclosure requirements. </div>
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The credibility of government's commitment to campaign finance reforms will be measured by complementary measures to strengthen the rigour of audits and tax filings of political parties as well as enforce-ability of their violations. </div>
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In any case, as already mentioned, I feel that the last word on this enactment may yet come from the Supreme Court, and it is here that some of the aforementioned suggestions can be considered.</div>
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Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-43899011586846504372016-07-19T05:06:00.003-07:002016-07-19T05:06:44.554-07:00Status note on the Rupee<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-size: 13.2px; line-height: 1.4;">Is the Rupee over-valued? I have tried to capture the relative</span><span style="font-size: 13.2px; line-height: 1.4;"> </span><span style="font-size: small;">real effective exchange rate (REER) trends</span><span style="font-size: 13.2px; line-height: 1.4;"> </span><span style="font-size: 13.2px; line-height: 1.4;">of Indian Rupee against those of its emerging market peers.</span></h3>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqNK4P3Ect76_RlL7fPFAyKEI_5zm04kWPnPeKUTFCwFGqfqTOnhNOYF_QtqcDS6vnk8QgwBPLzRxCF6SKRZW8paNxTSUfcANxdhwvEvyh0bKXNkVTISAQ0vq3Kh5Z7EvgntqrHNESUa30/s1600/REER+trends+2007.png" imageanchor="1" style="color: #888888; margin-left: 1em; margin-right: 1em; text-decoration: none;"><img border="0" height="246" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqNK4P3Ect76_RlL7fPFAyKEI_5zm04kWPnPeKUTFCwFGqfqTOnhNOYF_QtqcDS6vnk8QgwBPLzRxCF6SKRZW8paNxTSUfcANxdhwvEvyh0bKXNkVTISAQ0vq3Kh5Z7EvgntqrHNESUa30/s400/REER+trends+2007.png" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 1px solid rgb(238, 238, 238); box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; padding: 5px; position: relative;" width="400" /></a></div>
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The graphic (data from Breugel) presents the REER of 14 major emerging economies, including two of India's neighbours, since 2007. As on September 2008, with the base year of 2007, the Indian currency was the weakest in the sample. Fast forward to March 2016, and the rupee has appreciated more than all but four currencies, rising steadily by 16% since January 2007. It was largely stable during the peak of the crisis, but declined in mid-2013 as the taper tantrum played out. However, since the September 2013 trough, the rupee has steadily appreciated by more than a fifth, making its real appreciation significant.<br /><div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjKzGp0VSZmibT4LJJ_awTR9YEhi4s4nt12FaI6bL8miaZkRI8wGvI-SxuSD7o8ihCk0CeKqUKARrkgYuny_qjlCLOKC2Mq6oSbZb8rjJt2i6DV7zavjTgGalxOKiSjuvVi4KfIqbNh9bSf/s1600/REER+September+2013.png" imageanchor="1" style="color: #888888; margin-left: 1em; margin-right: 1em; text-decoration: none;"><img border="0" height="236" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjKzGp0VSZmibT4LJJ_awTR9YEhi4s4nt12FaI6bL8miaZkRI8wGvI-SxuSD7o8ihCk0CeKqUKARrkgYuny_qjlCLOKC2Mq6oSbZb8rjJt2i6DV7zavjTgGalxOKiSjuvVi4KfIqbNh9bSf/s400/REER+September+2013.png" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 1px solid rgb(238, 238, 238); box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; padding: 5px; position: relative;" width="400" /></a></div>
Apart from China, among its peers, only Bangladesh, Vietnam, and Pakistan have had greater currency appreciation since 2007. Since the taper tantrum trough, only Bangladesh and Pakistan currencies have appreciated more. The Bangladeshi Taka has appreciated by nearly 54% and Vietnamese Dong by nearly 44% since January 2007. Interestingly, but for the 2009-10 blip, Bangladesh and Vietnam have been growing steadily upwards of 5-6% for some time now. Pakistan, growing at 3-4%, clearly has a currency over-valuation problem. </div>
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<br />Since September 2013, India's central bank has waged a very firm battle against inflation and has been largely successful in anchoring inflationary expectations. In the process, it has not only managed to provide macroeconomic stability but also enhanced the perception among investors. The problems elsewhere coupled with the country's relatively strong economic growth has only added to the positive animal spirits. In this "<strike>country</strike> world of the blind", the Rupee has naturally held strong against its counterparts in East Asia and elsewhere.<br /><br />In other words, this strength of Rupee is a natural consequence of good macroeconomic policies, relatively high growth, boosted by the Central Bank's credibility, and amplified by economic weakness elsewhere. The RBI could not have engineered such persistent currency strength through open market operations in such choppy times. But its corollary has been erosion in trade competitiveness relative to its competitors, several of whom have benefited from significant depreciation.<br /><br />It also underscores the point that a simultaneous pursuit of macroeconomic stability, high growth and depreciating currency may not have been possible in such times. In fact, may not be possible during most times in a closely inter-connected global economy.</div>
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Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-70340348745161020152016-07-19T05:03:00.000-07:002016-07-19T05:07:06.808-07:00China debt fact of the day<div dir="ltr" style="text-align: left;" trbidi="on">
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China debt fact of the day</h3>
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From a Bloomberg article on China's fascination with high speed rail, whose network has grown to nearly 12000 miles in just under a decade,</div>
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<b>In May, state-owned China Railway Corporation, the operator of China's rail network, reported that its debt had grown 10.4 percent in the past year and now exceeded $600 billion; in 2014, roughly two-thirds of that debt was related to high-speed rail construction. That’s more than the total public debt of Greece. The company runs only one profitable line -- the massively traveled Beijing-Shanghai corridor.</b></blockquote>
That is a staggering number. The debt of just China Railway Corporation is 30% of India's GDP! </div>
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Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0tag:blogger.com,1999:blog-2498209726761204369.post-44585969175856698752016-07-19T03:21:00.004-07:002016-07-19T03:21:57.027-07:00Principle of wealth building 1 of 5<div dir="ltr" style="text-align: left;" trbidi="on">
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The first principle of wealth building is there are only three paths to choose from in this journey... </div>
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<li style="margin-left: 15px;">Paper assets (stocks, bonds, etc.)</li>
<li style="margin-left: 15px;">Investment real estate (not your home) </li>
<li style="margin-left: 15px;">Owning your own business </li>
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Your wealth plan should include at least two of the three paths and occasionally will include all three (depending on personal circumstances). This increases safety and certainty in the outcome. </div>
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Surprisingly, paper assets are rarely a wealth building vehicle despite the avalanche of media propaganda leading you to believe otherwise. They are typically a parking place for preserving and growing the purchasing power of wealth earned elsewhere. </div>
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The reason this is true is because of strict mathematical limitations to paper asset growth. It is the only asset class out of the three that is governed by these limitations. </div>
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(Side note: Did you notice the irony that paper assets are not really a wealth building vehicle when that is the only thing included in a traditional adviser's financial plan? That may not make sense until you realize that financial advisers are in the business of helping you manage the wealth you already created. They are not in the business of helping you build wealth in the first place.) </div>
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<span style="line-height: 19.6px;">In other words, there are really two steps to the wealth process (but most people only think in terms of one). The first step is to create wealth and the second step is preserve and grow that wealth through investing. </span></div>
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So how do most people create wealth in the first place? </div>
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Statistically, the answer is real estate and owning your own business. Why this is true will be explained in wealth plan principles 3 and 4 over the next few weeks. These reasons are an important part of your plan. </div>
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A small proportion of the population can save their way to wealth by applying frugality and deferring earned income (wealth earned elsewhere) to wealth vehicles 1 & 2 (real estate and paper assets). </div>
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However, saving your way to wealth is less common because it ignores wealth plan principles 3 & 4 and because it requires discipline, persistence and starting early enough in life to allow compound growth to work its magic. Yes, it is a workable strategy, but not many people fit this profile. </div>
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Your homework from this lesson is to start thinking about which of the three paths to wealth you would like to include in your wealth plan. </div>
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In your next lesson I will explain how to match the various paths to wealth with your unique life situation to begin formulating your personalised wealth plan. This is critically important to actually reaching your goal. </div>
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There are many ways to achieve wealth, but only one path that will uniquely fit you. I will explain how that works in your next lesson. </div>
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Finally, if you're liking this series, consider taking it to the next level with my course on designing your wealth plan. In Module 2 - Lesson 4 of that course I show you exactly how mathematical limitations to asset growth get integrated into your wealth plan design, and I provide the necessary resources showing you realistic rates of growth for each of the assets in your plan. Also, in Module 4 of the course, I explain the principles underlying each of the 3 asset classes so that you know how to properly utilize each asset class in your wealth plan. </div>
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Okay, see you in a few days with your next lesson from this course... which will be wealth plan principle #2 of 5. </div>
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See you then...<br />
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<b><span style="color: #9d4f00; font-family: "arial" , sans-serif; font-size: 16pt;">Ritesh.Sheth </span></b><b><span style="color: #9d4f00; font-family: "arial" , sans-serif; font-size: 20pt;">CWM<sup>®</sup></span></b></div>
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Ritesh Shethhttp://www.blogger.com/profile/02577440025290345237noreply@blogger.com0