Top Mutual Funds – How to Pick Top Trending Mutual Funds

Mehul Kothari द्वारा पोस्ट | 01 Jul 2019 को प्रकाशित |
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Top Mutual Funds – How to Pick Top Trending Mutual Funds

The ‘Mutual Fund Sahi Hai’ wave has caught the nation in the last 3 years and there is a clear growing awareness & interest in Mutual Funds among people. More and more investors are trying to find out about this investment option and are actively searching answers on How to pick top trending mutual funds? In this article, we give you certain tips that will help you in ascertaining and picking up top performing mutual funds in India.

Investing in mutual funds is simple but the bigger challenge is to find the top mutual funds to invest. Picking the best-suited mutual fund for yourself from the top-ranked ones involve a lot of attention to details like choosing the top performing mutual fund that focuses on offering higher returns on investment with a tap on the risk element. Mutual funds offer a bigger bait and investors perceive them as big winners when they strategically enhance their investment portfolio.

Once you have decided to incorporate top performing mutual funds in your investment portfolio, there are certain parameters that you need to analyze like mutual funds’ performance history, the fund manager, the expense ratio report, etc., before picking the top performing mutual fund. Let us see the best ways to consider picking up top mutual funds.

• Define Financial Goals:

One of the golden thumb-rules while investing in mutual funds is to start with defining your financial goals and ascertaining your financial expectations from the mutual fund scheme. Defining your financial goals will help you to put forth clear roadmap and timelines for achieving your target. Thus, even if you are focusing on top mutual funds to invest your money in, there are certain questions that you need to ask yourself.

o Do I want returns in a short duration or am I looking for long-term gains?
o Whether the purpose of the investment is for fulfilling a dream like children education, marriage, etc. or for creating a retirement corpus?
o How quickly do I want my money back?

Thus, there are these and many more other questions that you must ask yourself while defining your financial goals.

• Define your Risk Tolerance level:

The next very important factor that you must focus before investing in top performing mutual funds is your risk appetite. Mutual funds are subject to market risks so defining your risk appetite and tolerance level will help you in being mentally ready for the upcoming challenges caused due to market fluctuations. Investors can set their risk tolerance bar by answering the below-stated questions:

o Are you comfortable with market volatilities?
o Do you want higher returns or are you comfortable with conservative returns?
o Can you cope with the devaluation of your investment portfolio caused due to market fluctuations?
o Are you ready to take the plunge in the high-risk investment zone?

• Defining fund type and size of fund:

Before investing in top mutual funds, it is important to define the type of returns that you are expecting from top ranked mutual fund. Every investor aims for capital appreciation so having a plan to invest will help in increasing the potential of your investment portfolio. For example: if you want regular income from your investment then investing in income funds is suitable but if you have a higher risk appetite and are aiming for a distant financial goal then investing in a long-term Equity fund will fetch good returns as these funds usually aim for capital appreciation. Pre-determining the size of the fund is equally important as it will diversify the portfolio and even the risk associated with it. Identifying proper fund type, its instruments and size of the fund will help in achieving investment goals in a pre-determined manner and timeframe. Similarly, it will help you to plan better to overcome potential market risks and help in clearly identifying the top mutual funds to invest.

• Charges:

Mutual fund companies charge fees in various forms for offering their services to the investors and they make money from the charges they imply on the investors. Asset Management companies charge in the form of front-end load, back-end load, administrative charges, level-load fees, etc. It is necessary for the investor to keep a close eye on the fees and management expenses charged by the asset management company usually referred to as the Expense Ratio. Expense Ratio refers to the various operating expenses charged by the Asset Management Company. In case, you have any queries related to fees, we recommend getting them clarified before selecting the top mutual fund.

• Type of Management:

Before selecting the top ranked mutual fund, it is important for the investor to determine its portfolio management. The mutual funds in India are managed in two manners viz. Active Management and Passive Management. Both types of management have their own set of advantages and disadvantages which investors should carefully look into and select the preferred type. Following are certain key differentiating points between both the types:

o Actively managed funds charge higher fees as compared to passively managed funds.
o Active funds work to surpass the performance of the index funds while passive funds duplicate their performance
o Passive funds are well diversified as compared to active funds
o Passive funds are not traded frequently so they usually do not create huge taxable income, so this fund is preferred by investors with conservative risk appetite

• Study of the Past Trends:

Before investing in top performing mutual funds in India, one of the most important steps is to carry out extensive research and evaluate the funds’ past performance. Evaluating a fund's record of accomplishment will help in identifying its performance potential. Every mutual fund investor must ask themselves the following questions to gain clarity on the performance of the mutual fund:

o How did the fund manager perform i.e. whether the portfolio manager’s decisions can generate better returns?
o Did the fund deliver consistent results or were they volatile?

Seeking answers to the above questions will help in getting an insight into the performance of the fund managers. Apart from tracking the decision-making potential of the fund manager, it is also important for the investor to track the past trends/performance of the mutual fund before investing in the fund.

• Tax Implications:

It is important to have first-hand knowledge about the tax implications, the funds will attract. There is a different tax structure for mutual funds depending on the type of mutual fund and the period of investment. Investing for long-term for more than 12 months in a listed equity fund is exempted from the income tax ambit, however; investing in an unlisted equity fund for more than 12 months attracts tax at 20% with indexation benefit. Similarly, the short term listed equity funds attract a 15% income tax. While investing in debt mutual funds for long-term attract an income tax rate of 20% with indexation benefit and for short-term, the income tax rate is levied as per slab rate.


Conclusion:
Investing in mutual funds is simple and easy as long as you are done with the most ardent part of mutual fund investing i.e. finding top mutual funds to invest. Therefore, it is always advisable to take expert advice from the professionals at IndiaNivesh who will offer their expertise to help you pick top mutual funds to invest and raise the bar of your investment portfolio.

 


Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.

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ऑनलाइन ट्रेडिंग क्या है - मतलब, सुझाव और लाभ | इंडियानिवेश

Mehul Kothari द्वारा पोस्ट | 24 Jun 2019 को प्रकाशित |

पिछले 30 वर्षों में शेयर बाजार में व्यापार तेजी से विकसित हुआ है। फोन के माध्यम से पहले किए गए ऑफ़लाइन ट्रेडों से, हम एक ट्रेडिंग के ऐसे युग में चले गए हैं जो पूरी तरह से ऑनलाइन है। ऑफ़लाइन ट्रेडों में पहले एक आदेश को रिले करने के लिए अपने ब्रोकर को कॉल करने वाले निवेशकों को शामिल करना पडता था। आदेश की पुष्टि होने के बाद, दलाल ऑर्डर को एक्जिक्यूट करने के लिए स्टॉक मार्केट फ्लोर पर जाता है। स्टॉक मार्केट एक ओपन फ्लोर ट्रेडिंग सिस्टम पर संचालित होते हैं, जहां ब्रोकर अपने ऑर्डर को कॉल करते हैं और कीमतों और लेनदेन को अंतिम रूप दिया जाता है। इसे ओपन आउट क्राई भी कहा जाता है। जहां दलाल एक दूसरे के साथ संवाद करने के लिए हाथ के संकेतों और इशारों का उपयोग करते है। एक बार जब निष्चित कीमत के साथ आदेश को अंतिम रूप दिया जाता है, तो शेयर के प्रमाणपत्र का आदान प्रदान किया जाता है। शेयर प्रमाणपत्र के इस हस्तांतरण को स्वामित्व में परिवर्तन बताते हुए शेयर प्रमाणपत्र के पीछे स्याही में चिह्नित किया जाता है। एक बार जब यह हस्तांतरण हो जाता है, तो फंड यह दर्शाता है कि लेनदेन पूरा हो गया है। जैसा कि इस प्रक्रिया में बोझिल लगता है, 1980 के दशक तक दुनिया के सभी स्टॉक लेनदेन ने इस प्रणाली का पालन किया जिसके बाद स्टॉक एक्सचेंजों ने धीरे-धीरे डीमैटरियलाइज्ड शेयरों और ऑनलाइन ट्रेडिंग के लिए परिवर्तन शुरू कर दिया। ऑनलाइन ट्रेडिंग क्या है? ऑनलाइन शेयर ट्रेडिंग, लेन-देन के अलावा और कुछ नहीं है, यानी ऑनलाइन शेयरों की खरीदी और बिक्री। यह ब्रोकर के ऑनलाइन ट्रेडिंग सिस्टम के माध्यम से किया जाता है। ब्रोकर की ऑनलाइन ट्रेडिंग प्रणाली स्टॉक एक्सचेंज के ऑनलाइन शेयर ट्रेडिंग सिस्टम के साथ रजिस्टर है और इस प्रकार इसका उपयोग ट्रेडों के संचालन के लिए किया जा सकता है। ऑनलाइन ट्रेडिंग खाते का उपयोग करके ट्रेड किए जाने वाले कुछ उपकरण निम्नलिखित हैं: • जनरल शेयर• म्यूचुअल फंड्स• बांड• डेरिवेटिव• कमोडिटी• करेंसी• कोई अन्य लिस्टेड फंड ऑनलाइन ट्रेडिंग स्टॉक मार्केट में निवेश शुरू करने के लिए एक सुविधाजनक तरीका है। अब आपके ब्रोकर को आपके आदेशों के आधार पर सही कीमत का पता लगाना आवश्यक नहीं है। यह प्रक्रिया पूरी तरह से एक्सचेंज के प्राइस मैचिंग मैकेनिज्म के माध्यम से ऑनलाइन की जा सकती है। खरीदारों को खोजने के लिए प्रतिस्पर्धा करने वाले ब्रोकेरो के बजाय, सिस्टम एक मैचिंग सिस्टम के माध्यम से संचालित होता है जहां ऑर्डर खरीदने और बेचने के आदेश कीमत के आधार पर मेल खाते हैं। साधन की कीमत विनिमय पर लिस्टेड मूल्य से प्राप्त की जा सकती है। ऑनलाइन ट्रेडिंग एक निवेशक को उस कीमत को चुनने की सुविधा देता है, जिस पर वह उपकरण बेचना चाहता है और ऑर्डर मैचिंग सिस्टम के आधार पर, यह मिलान होने पर ऑर्डर पूरा हो जाता है। फंड ट्रांसफर और सिक्योरिटी ट्रांसफर, लेन-देन की तारीख के अगले दो दिनों के भीतर होता है, जिससे पूरी प्रक्रिया सहज हो जाती है। ऑनलाइन ट्रेडिंग की शुरुआत के साथ, भारत पहली बार वित्तीय बाजारों में निवेशकों से बढ़ी हुई भागीदारी को देख रहा है। भारत में ऑनलाइन ट्रेडिंग बेहद आसान है और प्रत्येक ब्रोकर यह सुनिश्चित करने के लिए वीडियो, ब्लॉग और ग्राहक सहायता प्रदान करता है कि उनके ग्राहक अपने प्लेटफॉर्म पर आसानी से व्यापार कर सकें। ऑनलाइन ट्रेडिंग निवेशक को विभिन्न प्रकार के ऑर्डर सेट करने की अनुमति देता है जैसे: • मार्केट और्डर• स्टॉप लोस्स आर्डर• लिमिट ऑर्डर्स ये खाते निवेशक को अपनी होल्डिंग्स का उपयोग करने की अनुमति देते हैं और इंस्ट्रूमेंट दर्ज करने या उससे बाहर निकलने के लिए तत्काल निर्णय लेते हैं। ऑनलाइन ट्रेडिंग के लाभ: 1. कॉस्ट:ऑनलाइन ट्रेडिंग का सबसे बड़ा फायदा ब्रोकरेज लागत है। एक ऑनलाइन प्रणाली का उपयोग करके ट्रेडिंग न केवल ब्रोकर के लिए बल्कि निवेशक के लिए भी प्रभावी है। एक मानवीय तत्व की अनुपस्थिति ब्रोकरो को उनकी दलाली की लागत को कम करने की अनुमति देती है, जिससे यह बहुत प्रभावी हो जाता है। 2.एफिशिएंसी:ऑनलाइन ट्रेडिंग बहुत कुशल है। मानवीय गलती के लिए बहुत कम जगह है। एक बार रखा गया आदेश लगभग हमेशा निष्पादित होता है। साथ ही, आपका ऑनलाइन ट्रेडिंग खाता आदेशों की पुष्टि और एग्जेक्युशन पर ईमेल और संदेश भेजता है। 3. रिसर्च रिपोर्ट:अधिकांश ब्रोकर विभिन्न बाजार साधनों के बारे में बाजार अनुसंधान रिपोर्ट और विश्लेषण की एक विस्तृत श्रृंखला पेश करते हैं। ये रिसर्च रिपोर्ट आपको शेयर बाजार की जानकारी देती हैं। आप इन रिपोर्टों पर भरोसा कर सकते हैं क्योंकि आप जानते हैं कि ये उद्योग के विशेषज्ञों द्वारा बनाए गए हैं। इस प्रकार, एक अच्छे ब्रोकर की एक शोध रिपोर्ट आपको समय बचाने में मदद करती है जो आप अन्यथा शोध करने में खर्च करेंगे। 4. स्क्रिप ट्रैकिंग:निवेशकों के लिए अलग-अलग शेयरों को ट्रैक करना संभव है, जिनमें उन्होंने निवेश किया है। ऑनलाइन ट्रेडिंग निवेशक को शेयरों में मूवमेंट को ट्रैक करने का मौका प्रदान करता है। यह समय-समय पर मूल्य मूवमेंट जैसी रिपोर्ट प्रदान करता है, बाजार में वर्तमान में रखे गए विभिन्न खरीद और बिक्री के आदेश आदि। 5. वॉच लिस्ट:ट्रेडर्स अपनी वॉच लिस्ट में कुछ शेयर डाल सकते हैं जो उन शेयरों की कीमतों को ट्रैक करने का एक आसान तरीका प्रदान करता है जिन्हें वे खरीदने का इरादा रखते हैं .. 6. स्पीड:एक ऑनलाइन ट्रेडिंग खाते का उपयोग करना बेहद सरल है। यह कुछ सेकंड में एक व्यक्ति को एक व्यापार पूरा करना करने की अनुमति देता है। ऑनलाइन व्यापार कैसे करें? 1. एक डीमैट और ट्रेडिंग खाता खोलें:ऑनलाइन ट्रेडिंग करने के लिए पहला कदम डीमैट और ट्रेडिंग खाता खोलना है। एक डीमैट खाता आपके सभी निवेशों के लिए एक ऑनलाइन भंडार या रिकॉर्ड है। जब भी आप कोई व्यापार करते हैं, तो शेयर जैसे इंस्ट्रूमेंट्स आपके डीमैट खाते से डेबिट या क्रेडिट होते हैं। ट्रेडिंग खाता ऐसा खाता है जो आपको शेयर बाजार में खरीदने और बेचने में सक्षम बनाता है। 2. सभी विभिन्न इंस्ट्रूमेंट्स के बारे में जानें:नए निवेशकों या व्यापारियों के लिए, विभिन्न इंस्ट्रूमेंट्स को समझना और बाजारों के काम करने के तरीके के बारे में जानना बहुत महत्वपूर्ण है। यह सही ट्रेडों को रखने में मदद कर सकता है और रिटर्न कमाने के लिए शेयर बाजारों का उपयोग कर सकता है। ऑनलाइन उपलब्ध कई रिसोर्सेज के साथ, बाजार के बारे में सभी सीखना आसान है। निवेश या व्यापार करने से पहले, सुनिश्चित करें कि आप जानते हैं कि आप कहाँ निवेश कर रहे हैं। 3. अपनी इंवेस्टिंग स्ट्रेटेजी चुनें:इस कदम का अर्थ है यह तय करना कि आप निवेशक हैं या व्यापारी। यदि आप एक निवेशक हैं, तो आप मध्यम से लंबी अवधि के लिए निवेश कर रहे हैं। व्यापारी आमतौर पर शॉर्ट टाइम ट्रेडों पर ध्यान केंद्रित करते हैं जो या तो कुछ महीनों में ट्रेडों या ट्रेडों को इंट्राडे कर सकते हैं। ये दोनों स्ट्रेटेजी काफी हद तक अलग हैं, इसलिए यह जानना महत्वपूर्ण है कि जब आप निवेश करते हैं तो प्रत्येक शेयर या म्यूचुअल फंड के लिए आपकी स्ट्रेटेजी क्या है। 4. मेक योर ट्रेड:ऑनलाइन शेयर ट्रेडिंग का अंतिम चरण ऑर्डर प्लेस करना और ट्रेड करना है। आपकी निवेश स्ट्रेटेजी के आधार पर, आप शेयरों को खरीद या बेच सकते हैं। अपने शेयरों को ट्रैक करने और सही समय पर बाहर निकलने के लिए याद रखें ताकि आप अपने कमाई के लक्ष्यों को प्राप्त कर सकें। ऑनलाइन ट्रेडिंग अर्थ पिछले कुछ वर्षों में विकसित हुआ है और इसने निवेश और इंट्राडे ट्रेडिंग को बड़ी संख्या में लोगों के लिए सस्ती और सुलभ बना दिया है। ऑनलाइन निवेश को ध्यान में रखते हुए? खैर, इंतजार क्यों? इंडिया निवेश सिक्योरिटीज लिमिटिड. जैसे अग्रणी ब्रोकर के साथ डीमैट और ट्रेडिंग खाता खोलें।   अस्वीकरण: प्रतिभूतियों के बाजार में निवेश / म्यूचुअल फंड बाजार के जोखिमों के अधीन हैं, निवेश से पहले सभी संबंधित दस्तावेजों को ध्यान से पढ़ें।

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Best Large Cap Mutual Funds to Invest in 2019

Posted by Mehul Kothari | Published on 01 Jul 2019

Mutual Funds offer various investment options in companies of varying market capitalization. A Fund needs to be chosen according to the investor’s risk appetite and financial goal. Investment into large cap mutual funds is one of the most recommended investment options today due to its large variety, less volatility, stable returns, etc. Investors who wish to create wealth without taking much risk can consider investing in large cap mutual funds. Financial planners/advisors also suggest and encourage their clients to invest in the large cap mutual funds as large cap mutual funds are placed better and tend to give better returns even during market fluctuations. Now, let us understand what are the best large cap mutual funds?Best large cap mutual funds are those mutual funds that invest in companies that have large market capitalization and have an outstanding track record. The market capitalization of large cap companies is around Rs. 20,000 crores or more currently. When it comes to business, these companies are well experienced and are great players. The most important characteristic of the large cap companies is their good performance and stability during volatility in the market. If you are interested in investing for a long horizon and make a steady profit without much risk, large cap mutual funds are the best option for you.Advantages and Disadvantages of Best Large Cap Mutual FundsOne of the major advantages of a large cap mutual fund is the stability that these funds bring to your portfolio. The large cap companies pay their dividends consistently and they have good records as well. Moreover, these large cap companies are present in the market for a long period, so you can obtain all the necessary details about them such as their management, performance, etc. However, over the long term, the scope and potential for growth is quite less in case of the large cap companies hence large cap mutual funds tend to provide lesser returns as compared to the small and mid-cap mutual funds over the longer tenures. Who should invest in Best Large Cap Mutual funds?Best Large Cap Mutual funds are a very good investment option for beginners or first-time investors. Ideally, the investment option of an investor should depend on the goal of his investments, the tenure for which he is interested in investing and the level of risk he is willing to face in the investment.Those investors who wish to earn their returns without being much exposed to the risk arising due to the uncertainties or fluctuations in the market should invest in the Best Large Cap Mutual funds. Since the large cap companies have good performance records and are financially strong, they tend to maintain stability during the market fluctuations. Even though there can be scenarios in which the returns from large cap funds might be lower than small and mid-cap funds, but they are relatively better protected from market falls which cancel out the effects of loss over the long term. Simply put, the returns obtained from the best large cap mutual funds tend to be less volatile. Top large cap mutual fundsLet us have a look at the top 4 large cap mutual funds in which a risk-averse investor should think about investing. 1 Aditya Birla SL Frontline Equity Fund 2 Axis Bluechip Fund 3 HDFC Top 100 Fund 4 ICICI Pru Bluechip Fund (As of 13th August, 2019) The list mentioned above shows a detailed view of the top large cap mutual funds in India. You can use this data for reference while deciding about investing in large cap mutual funds.Things an investor should consider when investing in Best Large Cap Mutual FundsThere are certain factors that an investor should keep in mind while investing in large cap mutual funds.o Understand the objective of your investmentIt is highly important that you understand and analyze the major goal or objective of your investment before making any investment. If you have clarity on your aim of investment, then you will be able to find out whether the objectives of the fund in which you are investing matches up with your goals or not. If the objectives of the fund and your investment objectives do not align with each other, then the investment would not be of much use in the long run. Moreover, you should understand the methods by which the funds are being managed so that you can have the necessary knowledge of the performance of the fund in which you have invested. o Past performance of the large cap mutual fundIt is quite crucial to know about the past performance of the large cap mutual fund in which you are planning to invest. You should look for the overall performance of the fund across all the conditions of the market. Most of the Best performing large cap mutual funds will perform consistently in all market conditions and you should choose such funds for investment.o Fund ManagementFund manager and his level of experience play an important role in your selection of the best large cap mutual funds. A fund manager’s consistent handling of different market scenarios is very important for generating consistent returns. So, it is necessary to select the Fund Manager wisely. o Expense RatioExpense Ratio, also known as the Management expense ratio, is a tool to measure how much assets of a fund are used in the administrative and other expenditure related to operations. It might also include charges like the brokerage fees, certain costs charged by Mutual fund houses, etc.These Operating expenses tend to lower the assets of a fund and in turn reduce the returns to the investor as well. Before, investing in any Large Cap mutual fund you should understand and compare these charges and the returns with its peers to choose the best large cap fund. Best performing large cap mutual funds will have lower expense ratio and higher returns. o Exit LoadExit load is charged to the investor directly when he/she redeems his/her investment before the stipulated period. This exit load is a fraction of the return an investor receives. So, you should always check the applicable exit load of the large cap mutual fund in which you are planning. Choose a large cap fund that does not have any/low exit load or remain invested for the specified period to avoid incurring an exit load. To summarize, best large cap mutual funds are an excellent investment option for those investors who want consistent returns from the funds. However, there are certain market risks involved in almost all investment options. So, it is always advisable to take help and guidance from Mutual fund advisors like IndiaNivesh before investment. You can always take control of your funds, but it should be done after gaining some experience about mutual funds.  Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.

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  • Value Investing - What is Value Investing & its Fundamentals
    Posted by Mehul Kothari | Published on 15 Jan 2020

    Value investing is the dark horse of stock markets. And this dark horse has created huge wealth for none other than Warren Buffet. Read on to know what value investing is, and what are the critical factors in this strategy. All that glitters is not gold and all that is gold does not always glitter. This holds true for investment decisions as well and forms the core principle of value investing. What is Value Investing? The value investment strategy was popularised by Benjamin Graham along with David Dodd after successfully surviving the period of the great depression. It involves proactively identifying stocks which are trading at a significantly lower value than their intrinsic value. Intrinsic Value refers to the true value of a stock. The two factors behind value investing are market price and value. Price is the amount you pay, and the value is what you get in return. Value investing believes that the stock market does not always remain in an efficient or balanced state. It sometimes overreacts to events such as political announcements, organisational restructuring, economic conditions and results in stock price fluctuations which do not correspond to the company’s actual worth or long-term fundamentals. Hence, there is a good probability that there are undervalued or overvalued stocks in the market. Value Investing and Behavioral Finance Value Investing and Behavioral Finance are two sides of the same coin. Value investing aims to exploit irrational or impulsive behaviour of investors. Emotions heavily influence investment-related decisions. Greed, fear, peer-pressure lead to poor investment decisions. This creates a huge potential for dispassionate or objective investors. Value investors do not get carried away by market sentiments or herd mentality, instead, they look at the real value of a stock in the long run. They also do not fall into a “growth trap” without actually understanding the history or behaviour of stocks. Fundamentals of Value Investing1. Find the intrinsic value Investors who follow value investing strategy are more interested in a stock’s intrinsic value and not just the current market price. There are multiple ways and valuation methods that are used to identify the intrinsic or true value of a stock. Such as discounted cash flow analysis, dividend discount model, Earning per Share valuation, etc. There is also a formula coined by Benjamin Graham to arrive at the true value of a stock. It is:  Intrinsic Value = Earnings Per Share (EPS) multiplied by (8.5+ Twice the growth rate of the company in the coming 7-10 years).  This formula has been now tweaked to reflect the current market conditions correctly. It is now:  Intrinsic Value = [Earnings Per Share (EPS) multiplied by (8.5+ Twice the growth rate of the company in the coming 7-10 years) multiplied by 4.4] divided by current corporate bond (AAA) yield.  4.4 in the above formula referred to the minimum rate of return in the USA in the year 1962. For the purpose of valuation of Indian stocks, 4.4 should be replaced by the corporate bond yield in the same year in India. When the stock’s market value goes below the calculated intrinsic value, investors purchase those stocks. Then they sit back and relax till the time the market corrects itself and the stock price reaches its actual value.  2. Margin of Safety Margin of Safety enables value investors to manage risks and avoid losses. It is also the key element which distinguishes value investing from mere speculation. It refers to the difference between the stock’s current market price and its intrinsic value. Higher the gap, greater is the safety margin. By investing in a stock with an adequate security margin, investors know that any negative event or volatility will not adversely impact the value of the investment. 3. Don’t follow the crowd Value investing is not for those who like to follow the herd. Value investors focus on stocks which are overlooked or avoided by others because of their low valuations but are inherently solid stocks.   Are there risks in Value Investing? Yes. Just like all the other things in our life, there are risks involved in Value Investing as well. One of the biggest risks is falling into Value Traps. All cheap stocks do not translate into good investment decisions. Value traps are stocks which seem to cheap due to low PE multiple or cash flows, but never go up in value. It is important to do full due- diligence before investing. 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  • Online Trading – 5 Essential Tips for Trading Online in 2020
    Posted by Mehul Kothari | Published on 14 Jan 2020

    Technological advancements and digitalisation have changed the online arena for every business, and the online share trading is no exception to the trend. Over the last few years, online trading has become very popular, especially amongst the millennials and generation Y. Prevalence of smartphones, lower costs, opportunity to earn extra income, low entry barriers, ease of access, etc has had a profound impact on online trading. Even though online stock trading today is huge, and many people are motivated to explore online trading for a rewarding career, by no figment of imagination it should be assumed that it is easy, and they can become financially self-sufficient in a short period. Here are 5 essential online trading tips to help improve your chances of success in your endeavours as a trader-1. Do the research and gain relevant information about the markets The economic conditions are constantly changing and it has a significant impact on the stock markets. To be successful in online share trading you have to do your research, collect relevant information and be updated about matters relating to markets. With information being available at the click of a button, it is easy to get access to information from various sources. Keeping your eyes and ears open about the official announcements being made, reading up market-related articles and financial publications can help you ace the game of online stock trading and avoid making whimsical trade calls.  2. Get acquainted with the trading terminologies and tools Getting yourself familiar with various terminologies and trading tools beforehand is extremely important so that you do not falter when you start trading. Clearing your basics about the important workings, different types of trades, important terms are critical. If you are not clear about the basics, then you may end up placing a wrong order. Once you are trading online, you are investing real capital and you cannot undo the trade. So, it is essential that you must be familiar with the features and the functions of the trading platform which you are going to use. Practice trading on dummy versions to get a hang of the trading interface before you can start with online trading. Once you have enough practice you will not be flustered and confused at the time of real trading. 3. Start with small capital and practice risk management There are infinite opportunities in the trading world and you do not want one experience to be the deciding factor for you. As online trading is risky, you should always make a small start in the beginning and invest little capital. Even the most successful traders do not put their entire investible surplus for trading but use only the capital which they have to spare after they have put aside for their long-term goals such as retirement. So, invest only the capital which you can afford to lose and which will not affect your financial planning. Another important thing to keep in mind at the time of executing trades is that the risk associated with trading is high and hence you should take adequate measures to minimise risk. Setting a stop-loss to your order will automatically stop a trade if the losses hit a particular mark and help minimise your losses. 4. Be patient and disciplined Online trading is a great way to make an income and many have successfully made a career out of it. If the success stories of other traders have motivated you to take the plunge, then, let’s be honest, online trading is risky and not for the light-hearted. Moreover, it is not something you can master overnight or become rich overnight on a single trade. To be successful, you need to have the right mindset and should be disciplined in your approach. Make a trade plan and stick to it. Trading out of impulse or greed will not help you become successful but following a plan and trading when you see opportunities can help you achieve the desired results. 5. Select the right broker and trading platform Last but not least, choosing the right broker and opening the best trading account online is important, and hence you should be careful about your selection. Choose a trading platform that best meets your needs and has a user-friendly interface. You should be comfortable using their software. Your success rate would be greatly affected by the timely execution of your orders. Other aspects to consider are a level of customer service and satisfaction, market reputation and competitive fee structure.   Conclusion With the above essential online trading tips, you can give your income a boost. We at IndiaNivesh have one of the best online trading platforms at the most competitive price and also offer expert advisory and research to meet your investment needs.Disclaimer: "Investment in securities market and Mutual Funds are subject to market risks, read all the related documents carefully before investing."

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  • Tips on Investing Money in Mutual Funds
    Posted by Mehul Kothari | Published on 20 Nov 2019

    Mutual Funds are the cynosure of the financial world. And rightly so! These investment havens pool in money from multiple investors and then invest the corpus across asset categories in line with the scheme’s objective. They are a great option for retail investors who would otherwise find it difficult to get exposure to such varied investment opportunities. What makes Mutual Funds a good investment tool? ·         Professional Management The USP of Mutual Funds is that they are managed by a team of experts. They are equipped with the necessary resources and information to continuously monitor the markets, analyze market trends and conduct in-depth research. As a result, the fund managers can devise the best investment strategy for the investors and guide them regarding the best mutual funds to invest in. ·         Financial Discipline One of the common problems faced by investors is that they lack the rigour or discipline to stick to their financial resolutions. Mutual Funds take care of this issue easily. Systematic Investment Plans ensure that investors continue to invest regularly. ·         Flexibility Mutual Funds offer a great deal of flexibility to investors. You can choose the frequency of contribution as well as opt to increase or reduce the investment amount as per cash flows. ·         Affordable Systematic Investment Plan (SIP) facility makes Mutual Funds affordable to everyone. One can start mutual fund investments with just Rs. 500. That is basically the cost of one pizza these days! They are perfect for novice investors who are overwhelmed or scared of equities but still want some exposure. ·         Tax savings ELSS are tax-saving Mutual Funds. Investment in these mutual funds qualifies for tax deductions (till Rs. 1.5 Lakhs) as per Section 80C. Owing to their potential of higher returns and shorter lock-in period, as compared to other tax-saving alternatives, ELSS have become a preferred choice for many investors.   Mutual Fund investment tips Now that you know what makes Mutual Funds a great investment tool, here are some mutual fund investment tips to help you make the most out of your hard-earned money. ·         Set a goal It is rightly said that “Dreams do not come true. Goals do”. The same rationale applies to investments too. Investments bring the best results when they have a purpose. So, the first step in mutual fund investments should be setting an investment goal. You should consider factors like budget, investment horizon, financial ambitions and most importantly your risk appetite.  ·         Select the right fund type When it comes to mutual fund investments, one size does not fit all. Just because your friend is investing in a fund does not mean it will benefit you as well.  Mutual Funds invest across a range of asset classes. Hence deciding which mutual fund to invest in can be slightly tricky. It is important to choose a scheme that is in sync with your needs and risk profile. For instance, if you are an experienced investor and can afford to take risks, you can easily go for equity funds. However, if you are a novice then most mutual fund tips for beginners will suggest going for debt or balanced funds. It is important to understand the risk-return relationship inherent in each asset category before making a decision. Rule of thumb being – higher the risk, higher the return! The asset allocation should be in sync with your risk appetite. Also, ask yourselves why you are investing in mutual funds. Is it to save taxes? Then ELSS Funds are your best bet. If you have a short investment horizon and want a fund type with high liquidity, then you can go with Liquid Funds. ·         AMC Credibility Check The right fund house can not only help you decide which mutual fund to invest in but optimize the potential of your overall portfolio. It is important to look at factors such as the credentials of the fund managers, expense ratio, components of the portfolio and AUM (Assets Under Management) of the Fund House. ·         Diversification is the key You should not put all your eggs in the same basket. Diversification across asset categories and investment styles is important. It helps to lower the risk quotient as it gets spread over different investments. Even if one fund underperforms, the other can compensate for it. The value of the entire portfolio is not at risk. ·         SIPs vs Lump-sum One of the best mutual fund tips for beginners is choose the SIP way. Especially if you are venturing into equity or equity oriented mutual funds. A SIP will allow you to spread out your investments over a longer duration of time. You will invest at different points in the market cycle and hence even out the associated risk. Also, the power of rupee-cost averaging in SIPs helps to generate higher returns in the long-term. ·         KYC KYC has become a necessity these days. Government of India has mandated KYC for most of the financial transactions including mutual fund investments. So, ensure that you have documents such as PAN Card, valid address proof, etc. before you venture into mutual fund investments. ·         Have a long-term view Mutual Funds are like a committed relationship and not a one-night stand. You need to remain invested for a longer duration in order to get the best rewards. Especially in the case of equity funds. This is because markets tend to be volatile in the short run but tend to move up in the long-term. The best combination is to invest in a mix of debt and equity to get best of both the worlds. Debt Funds would help to lower the overall risk of the portfolio and could help meet emergency fund requirements in the short run. While your equity funds work on wealth appreciation in the long run. ·         Ask the Expert Just like KBC, Mutual Funds also come with a helpline – Ask the Expert! There are so many options available in Mutual Funds. It can become rather overwhelming for a new investor to select the right mutual fund to invest in. A professional expert will not only help to select the right funds and schemes but will also constantly monitor the market on your behalf. One such expert is IndiaNivesh. They offer a wide variety of financial solutions related to broking and distribution, strategic investments, institutional equities, corporate advisory, investment banking and private wealth management. The team at IndiaNivesh has a combined experience of more than 300 years. With their cutting-edge technological and research capabilities, competent team and “client-first” approach, you can be rest assured that you are in safe hands.   Final Words Now that the mystery is solved about how you can select the best mutual funds to invest in, what are you waiting for? Especially when you know that you have a guide like IndiaNivesh available at the click of a button.Disclaimer: "Investment in securities market and Mutual Funds are subject to market risks, read all the related documents carefully before investing."

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