Money & Markets

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2018-03-31T15:05:00.001+05:30

Thanks for trusting us for your Investments & Insurance Needs.. We will continue our best to help you in field of Risk & Return going forward...

Banning 500 1000 2 view point

2016-11-12T01:27:00.001+05:30

Now it's an old news... About banning 500 1000 notes ... But here i m publishing to logical views which was shared by two different individual on my whatsapp... Both are interesting and has substance to it...

View one

Effects of ill planned, wrongly executed noble idea:

1. More then 5cr people are going to loose jobs..

2. Poor people, farmers and small traders are going to be most effected.

3. Winning UP election is not end of the world. More elections are to follow.

4. 50 crore people exchange 4000 rs a week and deposit 1.5 lacs in sb account can make all money into white.

5. If Pakistan can copy old notes, it can also copy new notes. It's not a rocket science. It will take maximum 3 months. And that currently is more easy to circulate as whole of India is cash starved.

6. Real estate, branded goods, vehicle, cash on delivery, cement, steel, logistics, entertainment, easy spending for wedding all going to have irreparable damage and people will loose jobs.

7. Terrorism finance is done through wire transfer .

8. How many crore man power of hours of this country is going to be wasted in standing in bank que.

9. So called black money holders will stack new notes within 6 months.

10. It has only led to black marketing of gold, essential commodities.

11. It's only harassment to 125 crore Indians just to show world. Pakistanis must be happy that they have rattled entire India without a single bullet.

12. Media sitting in AC cabins and common man is yet to feel the pinch.

13. Corruption will continue in more better way with new 2000 Rs currency .

and all works has stoped till new notes comes to circulation in regular scale .

14. India is gone back 3 years at least and people loose faith in currency.

15. For people to hide currency, they may use 500€ bills each note is worth 35000 rs. or 2000 Singapore $ each note worth 85000 rs.Over all, it's like you put your own house on fire just to drive a rat out.

OPERATION SUCCESSFUL BUT THE PATIENT DIED!!

Modi's great 2000 Rupee Note Trick

(If you find this helpful and interesting, request you to please do share so that doubts of anybody around introduction of Rs. 2000 currency notes are assuaged)

I was contemplating about writing this post since yesterday, was a bit perplexed if I should.

Its about Modi's great Rs. 2000 Note Trick which Modi has played with such brilliant flair that it has stumped everybody (many of his supporters as well).

There is caveat to the below Analysis, which is, you need to read completely to understand it

As I'm writing this post, I know this will be a little long but should be interesting to the inquisitive, so please have patience.

To understand this trick, you must first understand the characteristics of a surgical strike

Yes a surgical strike and its not an impromptu overnight impulsive reaction.

Its main characteristics are:

1. Meticulous Planning
2. Maximum Damage
3. Very Accurate (Damaging the target while the surrounding suffers very little damage)
4. Sudden Shocking Surprise (without giving any time to the target to understand and save itself)
5. Minimum Collateral Damage
6. Conducted after diversionary tactics
7. Blocking any escape routes

In view of the above, demonetizing was precisely a surgical strike on black money . I will not go into more about this phenomenal death blow to Black Money, there are enough articles and analysis. I will focus on something which not many could see in this blitzkrieg. Modi's Great Rs. 2000 Trick.

To understand this trick, I wont take you too far back but 24th September 2016, Location Kozhikode, event BJP National Council's meeting. Modi was soft in speech and made an appeal to
Pakistani people not to get into fight with each other but fight poverty. There were mocking meme's of "Kahan Gayi 56 inch ki chaati". Indian express talked about strategic restraint.

http://indianexpress.com/article/india/india-news-india/narendra-modi-kozhikode-speech-powerful-case-for-strategic-restraint-pakistan-3048718/

3 Days later, *drumroll* surgical strike. Pakistani who thought nothing is gonna happen were caught completely off guard. They even had prepared their launch pads in final stages to launch terrorists in India as they seemed convinced Modi won't do anything.

Fast forward to 6th November, Social media, WhatsApp were filled with messages & images of new Rs. 2000 with NGC, notice carefully, no news about new Rs. 500 but only 2000 .. Why? Why only 2000 .. just coz 500 was already there? but isn't a news about a new 500 note exciting enough to be shared on WhatsApp .. why there was no news about it.

Now I will start unraveling the plan.

First. How easy do you believe is it to leak an image of new currency and that too in good detail without any action, without any reaction from govt.? Isn't it such a huge security blunder? Isn't that a matter of concern?

Govt acted so cool .. not even a news report that why such a thing happened.. Well coz it was done by RBI (Govt.) itself .. They leaked out the Image of Newly minted Rs. 2000 with the rumour of a NGC Nano GPS Chip on it to track it even 130 meters below ground. But why would they do that .. also why not put a news about 500 with a chip as well .. what did the govt. want to achieve with the tactic?

3 Days later, *drumroll* .. Surgical strike Conducted on Black Money (9th Nov) .. No one could have dreamt that 500 and 1000 Rupee Note would be stopped coz 2000 is a new denomination .. an Addition not a replacement. And news about new 500 never came in the market.

You wanted your target which is guilty and nervous (ready) to feel relaxed .. A whiff of new note of existing denomination would have send a chill down the spine so that is why its 2000 and not a Rs. 1000 note. Also with NGC, the culprit feels that okay so govt. is taking measures on new money, nothing is gonna happen to old as its not gonna get replaced (there is no existing 2000 Rupee note to replace.) Its a measure for future notes and my Rs. 500 and Rs. 2000 are safe.

The same is applicable to terrorists and their handlers as well. Who dont want to be tracked with 2000 rupee note, better start stocking 500 and 1000 Rupee notes now.

You may ask why even announce about the 2000 Note then? Recall the characteristics of Surgical Strike, the target knows that 30th September Deadline is over there could be action so it is always better to relax the target and then launch the offensive for maximum accurate damage. (How it would relax has been explained in previous paragraph if that thought crossed your mind).

This was primary objective. Secondary Objective, The culprit is relaxed about new note but aware that this new note with chip wont be easy to hoard (stock) so better remove Rs. 500 and Rs. 1000 notes from market and convert from 100s to 500s and 1000s .. the culprit is in trap.

Tertiary and quite a valid important Objective:

86% of currency in circulation is in denomination of 500 and 1000. The valid white money crunch is going to crush the economy. Introduction of new money would be slow .. you need a high denomination to fill that void (not completely but to some extent). Don't expect too many 2000 rupee notes to be printed, they are just to tackle this emergency situation which govt. did expect to get created.

Now the next question is if its the objective why not leak 2000 image earlier enough for them to stock maximum. Remember, it is secondary objective and longer the time after a relaxing stroke, the more the chance that culprit becomes aware and take evasive measures.

So now .. Who all knew about stopping of existing 500 and 1000 rupee notes? No one except Modi Ji, Arun Jaitley and RBI Gov. I doubt if there is a fourth person who knew about it.

Why not others? How would it matter anyway .. its stopping the existing denomination .. don't need much preparation to remove the existing, what needs planning is introduction of new currency. So phasing out can be done at the drop of the hat and that is what was done without many people being informed about it.

So what about the new Rs. 500 Note? Did the banks know.. Ha Ha .. they did not?

I came across this article in the evening today and it confirmed my .

http://www.ndtv.com/india-news/top-secret-how-pm-narendra-modis-cash-ban-was-planned-and-executed-1623848

"They (Bank Heads) had been called to the RBI in the morning to receive a locked currency chest which they were told contained notes of the new 2,000 rupee denomination. They were under strict instructions not to open the chest or speak about it until later that night, according to the Mint newspaper.

It was when they opened it, as PM Modi was speaking, that they learnt about the new 500 rupee note, the paper added."

The banks were told that they should give more Rs. 100 notes and not Rs. 500 or Rs. 1000

Another line from the article above - "Last week, the RBI had ordered banks to issue more 100 rupee notes but no one seemed to have seen what was coming."

EDIT: RBI had issued a notification for banks to dispense Rs. 100 Notes through ATMs on 2nd November. Thanks to Mohan Kumar for sharing this link (https://rbi.org.in/Scripts/NotificationUser.aspx?Id=10674&Mode=0)

What other unintended but obvious objective did the Rs. 2000 Note trick achieve? Machines in Karachi worked overtime in last three days to print 1000 and 500 as Rs. 2000 would not be easy to print with the NGC chip (they thought would be real, the hoax worked), only to waste their resources and go WTF after the announcement.

"The Directorate of Revenue Intelligence, Research andAnalysis Wing and other intelligence agencies had exposed Pakistan governmentacquiring ink and paper far in excess of requirement to print Pakistani currency."

http://m.indiatoday.in/story/black-money-surgical-strike-pakistan-fake-currency-network-modi/1/806903.html

The Rs. 2000 trick was a diversionary tactic as well as a trick for black money hoarders to hoard in 500 and 1000 currency notes since 2000 with NGC would not be easy to hoard.

Once you assimilate this one little plan in the whole scheme of things that Modi has tried to checkmate Black Money with, you would only say Modi Sir, You beyond awesome !!!

Bonus Analysis: NDTV Ban was never going to happen, it was just to keep the notorious channel busy in its own affairs trying to garner support while Modi slammed their back and roared "Dhappa" (Chuppan Chuppai)
******************************************
My personal note:-
Sometimes you come across such two exactly different opinions and feel both has bit of truth into it.. ;)

Enjoy this period.. cuz with out cash life do not stop.. but with out moral life isn't life after all.. at last we all leaves back what ever we create here.. so let create Better stronger finner tomorrow of all of us...

A J RAVAL

Sensex

2016-10-16T23:02:00.001+05:30

Here are some very interesting facts about Sensex

The term 'Sensex' was coined by the Pune based stock market analyst Deepak Mohoni.

The BSE Sensex was launched on January 1st, 1986.

On the launch day, the index closed at 549.43 points.

It's lifetime intraday high was 30,024.74 logged on March 4, 2015 while the closing high was 29,380.73 on the same day.

The Sensex has seen 7,203 trading days since its launch till June 30, 2016.

There were 3,768 up days and 3,434 down days for the index.

Historically, Tuesdays were the worst performing day of the week for the benchmark, while Fridays were the best.

The Sensex first passed
1,000 points on July 25th, 1990.
10,000 points in February, 2006 20,000 points in December, 2007.

In just 17 trading days, between September and October 2007 the Sensex gained nearly 3,000 points.

Out of the original 30 companies only six are in the index now Reliance Industries, ITC, Hindustan Unilever (HLL then), Larsen & Toubro, Mahindra & Mahindra and Tata Steel.

HAPPY BIRTHDAY TO SENSEX

2016-10-15T10:07:00.001+05:30

Happy birthday to SENSEX... and wishes to all simple smart sticky Investor that coming many more anniversary will be much more fruitful and wealth creation opportunity... Invest in right asset and stay invested.. will give you much more return then just trying to trade every dam falsy ...

Is World Bond Market in Bubble Territory..?

2016-10-13T17:01:00.001+05:30

Different perspective worth noting...

http://m.economictimes.com/markets/bonds/view-why-bond-market-matters-more-than-stock-market/articleshow/54808646.cms

How to Not Fight with Your Spouse When You Get Home from Work

2016-06-15T15:27:00.000+05:30

https://hbr.org/2016/04/how-to-not-fight-with-your-spouse-when-you-get-home-from-work?cm_mmc=email-_-newsletter-_-management_tip-_-tip_date&referral=00203&utm_source=newsletter_management_tip&utm_medium=email&utm_campaign=tip_date

My coaching clients have hard jobs with big responsibilities that generate lots of stress, and many of their spouses and partners have similarly demanding careers. And yet one of the most challenging experiences in their day doesn’t occur at work, but in the first 15 minutes after they arrive home and greet each other.

When that initial personal encounter at the end of the workday goes well, it can help both parties feel a sense of care and appreciation that helps them unwind and feel better prepared for the following day. And yet it so often goes badly, creating frustration and a sense of disappointment that can poison the rest of the evening. There are several factors that make this such a difficult situation for couples to navigate.

Different needs. Both parties are likely to be in different mental and emotional states with differing sets of personal needs, and while this may seem self-evident, it’s striking how many couples forget this when they walk in the door. A common version of this is someone arriving home after a difficult day who needs some quiet and solitude before being ready to engage, only to meet a spouse or partner who arrived home earlier (or who spent the day there) and is eager to connect.

Even if both people arrive home simultaneously, they may have had vastly different experiences during the day–one person ran into a string of conflicts and had a terrible commute, while the other went from one triumph to another and enjoyed a peaceful journey home.

And even if both people had similar days, they may simply need very different things in response to those experiences. Some people need to talk about their workday with a supportive listener, while others need time for quiet reflection. Some people need entertainment, some need distraction, some need a drink, and some just need a hug.

Different recovery times. Richard Davidson, a neuroscientist at the University of Wisconsin, has spent decades studying the relationship between our emotions and various brain structures and neurological systems. In his 2012 book The Emotional Life of Your Brain, Davidson notes that people vary widely with regard to the speed with which we recover from adverse experiences. (Davidson calls this quality “resilience,” but I prefer “recovery time,” as I use the former term more broadly when discussing our overall response to stress and challenges.) Davidson’s research demonstrates that people with different recovery times even show different patterns of activity in their brains.

In practice, this means that someone who had an objectively horrible day at work may be in a good mood by the time they step out of the office, yet someone who encountered fewer challenges may still feel their impact well into the evening.

(While the disadvantages of an excessively slow recovery time are obvious, it’s important to note that faster recovery times aren’t always better. People who appear to recover extremely quickly from negative experiences may feel compelled to do so because they find the resulting feelings of distress and discomfort intolerable and need to distance themselves psychologically. As a consequence, it can be harder for them to learn from mistakes and setbacks, and they may find themselves out of step with those around them.)

Different cultures. “Every relationship is a cross-cultural experience,” according to John Gottman, an eminent psychologist at the University of Washington whose research has focused on marriage and committed relationships. In Principia Amoris: The New Science of Love, Gottman writes, even “if we come from the same country, the same part of the country, the same race, and the same religion, we come from… families that have defined meaning in very different ways. When we build a relationship together, we must decide on our own meanings.”

But while couples may take the time to understand and evaluate their respective life goals and philosophies before embarking on a shared existence together, they rarely stop to think about the more mundane aspects of domestic life and what it means to build a cross-cultural relationship in those domains.

That’s why spouses and partners may have significantly different interpretations and expectations about what it means to “come home” and how people are expected to interact on such an occasion.

So what can we do?

First, recognize that these differences exist and legitimize them. It’s unrealistic and unhelpful for couples to expect that they’ll automatically be in sync when they arrive home. Different needs, different recovery times, and different cultures all combine to make it more likely rather than not that couples will be out of sync when they first encounter each other at the end of the workday.

Next, identify your needs as individuals and make time to talk about this issue as a couple (but not when you first walk in the door – set some time aside). This may seem like a trivial or even silly issue to take so seriously, and yet a consistent failure to recognize the importance of this encounter is precisely why so many couples find it so stressful. A little planning–and some candor about what you need–go a long way.

Finally, be aware that a degree of emotion management and self-monitoring can be particularly useful. We tend to approach our spouses and partners with the expectation that we can just “be ourselves,” without worrying about how we’ll be perceived or our impact on them. And yet a consequence of this approach is that we take all the interpersonal skills that we work so hard to apply as leaders and managers, and we throw them out the window as we get close to home, just when they’d be most useful.

Ed Batista (@edbatista) is an executive coach and an Instructor at the Stanford Graduate School of Business. He writes regularly on issues related to coaching and professional development at edbatista.com, he contributed to the HBR Guide to Coaching Your Employees, and is currently writing a book on self-coaching for HBR Press

Retirement : Myth or Reality ....

2016-05-27T16:58:00.002+05:30

How SIPs in Diversified Equity Mutual Funds have created wealth

2016-05-27T11:47:00.003+05:30

This article been first publish in advisorkhoj site. I have put down few important part of it.

Systematic Investment Plans (SIPs) were introduced in India almost 22 years back by Franklin Templeton. Since then, SIPs has become the preferred way of investing in Mutual Funds. Currently in India, Investors are contributing almost Rs. 3,000 Crore monthly through SIP route and there are over One Crore active SIP accounts as at end April 2016. Also, Assets managed by the Indian mutual fund industry have grown from Rs. 11.93 trillion in April 2015 to Rs. 13.86 trillion in April 2016. That represents a 16% growth in assets over April 2015. Retail mutual fund investors have significantly contributed to this growth by investing through SIPs and currently their share is 46.30% (Data of April 2016 – Source www.amfiindia.com) to the total Mutual Fund industry assets.

Indian equity or Mutual Fund Investors, over period of time have realised that timing the equity market is difficult and thus investing a small amount systematically makes sense in equity assets as that has given the best returns historically.

Our research shows that investing through SIP route has created immense wealth for the investors in the long run and that is the topic we will cover today. But, first let us recap what are the key benefits of investing through SIPs.

SIP brings a disciplined approach to investing. By investing a fixed amount which may be as small as र 500, you can build a corpus for your long term financial goals like Retirement Planning and higher education of your child etc.

Through SIPs you can also choose to select schemes which are best suited to your risk profile. Investing through SIP does not mean that you can only invest in Equity Mutual Funds. You can also invest in liquid or debt funds through SIP route.

The biggest advantage of SIPs is that, you need not time the market. By investing in regular frequency, e.g. weekly, fortnightly or monthly, you are actually investing at the high and the low points of the markets. This helps in averaging the cost of the investment.

SIPs in Equity oriented mutual funds are far more tax efficient than most other investment options. Long term capital gains for equity mutual funds are tax exempt. Dividends received form equity mutual funds are also tax free.

Few Asset Management Companies even offer Free Life Insurance Cover if you invest through SIP route. This is just to encourage the habit of regular savings and this has no effect on the overall return on the SIPs.

In Example we have have taken SIP of 3000/-

Source: Advisorkhoj Top Performing Sip – Diversified Equity Funds (data as on 20/5/16)

ICICI Prudential Multicap Fund

ICICI Prudential Multicap Fund, a diversified equity fund launched in October 1994, has an AUM base of nearly र 1085 Crores. The chart below shows the SIP returns of the ICICI Prudential Multicap Fund, Growth option, over the last 15 years.

If you had started a monthly SIP of र 3000 in ICICI Prudential Multicap Fund in June 2001, by now you would have accumulated nearly र 25.68 Lakhs corpus, with an investment of only र 5.40 Lakhs.

You would have accumulated corpus of र 4.90 Lakhs by the end of 2005, a corpus of र 10.64 Lakhs by the end of 2009 despite the severe financial crisis of 2008, a corpus of र 15.91 Lakhs by the end of 2013 and finally र 25.68 Lacs at the end of the SIP tenure. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be around 19%.

The fund has been ranked No. 3 by CRISIL in its recent mutual fund ranking for the quarter ending Mar 31, 2016. It is also a 3 Star rated fund by Valueresearch

Birla Sun Life Equity Fund

The Birla Sun Life Equity fund is a diversified equity fund launched in August 1998. This fund from the Birla Sun Life stable has an AUM base of nearly र 2,399 Crores (As on April 30, 2016). The chart below shows the SIP returns of the Birla Sun Life Equity fund, Growth option, over the last 15 years.

If you had started a monthly SIP of र 3000 only in the Birla Sun Life Equity fund back in June 2001, by now you would have accumulated a corpus of over र 29.12 Lakhs, with an investment of only र 5.40 Lacs.

You would have accumulated corpus of र 5.65 Lakhs by the end of 2005, a corpus of र 12.88 Lakhs by the end of 2009 despite the severe financial crisis of 2008, a corpus of र 17.21 Lakhs by the end of 2013 and finally र 29.12 Lacs at the end of the SIP tenure. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be 20%.

The fund has been ranked No. 2 by CRISIL in its recent mutual fund ranking for the quarter ending Mar 31, 2016 up one place from the ranking for the quarter ending December 31, 2015. It is also a 4 Star rated fund by Valueresearch

Franklin India Prima Plus

The Franklin India Prima Plus fund is a diversified equity fund launched in September 1994. This fund from Franklin Templeton stable has an AUM base of nearly र 7,425 Crores (As on April 30, 2016). The chart below shows the SIP returns of the Franklin India Prima Plus fund, Growth option, over the last 15 years.

If you had started a monthly SIP of र 3000 only in the Franklin India Prima Plus Fund back in June 2001, by now you would have accumulated a corpus of nearly र 31.36 Lakhs, with an investment of only र 5.40 Lakhs.

You would have accumulated corpus of र 4.75 Lakhs by the end of 2005, a corpus of र 11.57 Lakhs by the end of 2009 despite the severe financial crisis of 2008, a corpus of र 18.21 Lakhs by the end of 2013 and finally र 31.36 Lacs at the end of the SIP tenure. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be 21%.

The fund has been ranked No. 2 by CRISIL in its recent mutual fund ranking for the quarter ending Mar 31, 2016. It is also a 5 Star rated fund by Valueresearch

HDFC Capital Builder Fund:

The HDFC Capital Builder Fund is a diversified equity fund launched in February 1994. This fund from India’s second largest AMC has an AUM base of nearly र 1,157 Crores (As on 30 April, 2016). The chart below shows the SIP returns of the HDFC Capital Builder fund, Growth option, over the last 15 years.

If you had started a monthly SIP of र 3000 only in the HDFC Capital Builder Fund back in June 2001, by now you would have accumulated a corpus of nearly र 28.82 Lacs, with an investment of only र 5.40 Lacs.

You would have accumulated corpus of र 5.53 Lakhs by the end of 2005, a corpus of र 11.69 Lakhs by the end of 2009 despite the severe financial crisis of 2008, a corpus of र 18.27 Lakhs by the end of 2013 and finally र 28.82 Lacs at the end of the SIP tenure. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be over 20%.

The fund has been ranked No. 3 by CRISIL in its recent mutual fund ranking for the quarter ending Mar 31, 2016. It is also a 3 Star rated fund by Valueresearch.

DSP BlackRock Opportunities Fund

The DSP BlackRock Opportunities Fund is a diversified equity fund launched in May 2000. This fund has an AUM base of nearly र 846 Crores (As on 30 April, 2016). The chart below shows the SIP returns of the DSP BlackRock Opportunities Fund, over the last 15 years

If you had started a monthly SIP of र 3000 only in the DSP BlackRock Opportunities Fund back in June 2001, by now you would have accumulated a corpus of nearly र 28.17 Lakhs, with an investment of only र 5.40 Lakhs.

You would have accumulated corpus of र 5.49 Lakhs by the end of 2005, a corpus of र 12.27 Lakhs by the end of 2009 despite the severe financial crisis of 2008, a corpus of र 17.86 Lakhs by the end of 2013 and finally र 28.17 Lacs at the end of the SIP tenure. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be around 20%.

The fund has been ranked No. 3 by CRISIL in its recent mutual fund ranking for the quarter ending Mar 31, 2016. It is also a 3 Star rated fund by Valueresearch

Reliance Vision Fund

The Reliance Vision Fund is a diversified equity fund launched in May 2000. This marquee fund has an AUM base of nearly र 3075 Crores (As on 30 April, 2016). The chart below shows the SIP returns of the Reliance Vision Fund Growth Option, over the last 15 years

If you had started a monthly SIP of र 3000 in Reliance Vision Fund in June 2001, by now you would have accumulated a corpus of nearly र 27.15 Lakhs with an investment of only र 5.40 Lakhs.

You would have accumulated corpus of र 6.37 Lakhs by the end of 2005, a corpus of र 14.23 Lakhs by the end of 2009 despite the severe financial crisis of 2008, a corpus of र 17.09 Lakhs by the end of 2013 and finally र 27.15 Lacs at the end of the SIP tenure. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be around 20%.

Although it is a Valueresearch 2 Star rated fund, its ranking has been upgraded to No. 3 by CRISIL in its recent mutual fund ranking for the quarter ending Mar 31, 2016.

You may also like to read – The Great Wealth Creators Over 20 Years

Tata Equity Opportunities Fund

The Tata Equity Opportunities Fund is a diversified equity fund launched in March 1993. This fund has an AUM base of nearly र 1151 Crores (As on 30 April, 2016). The chart below shows the SIP returns of the Tata Equity Opportunities Fund Growth Option, over the last 15 years

If you had started a monthly SIP of र 3000 only in the Tata Equity Opportunities Fund back in March 1993, by now you would have accumulated a corpus of nearly र 26.72 Lakhs with an investment of only र 5.40 Lakhs. You would have accumulated corpus of र 5.58 Lakhs by the end of 2005, a corpus of र 12.07 Lakhs by the end of 2009 despite the severe financial crisis of 2008, a corpus of र 16.95 Lakhs by the end of 2013 and finally र 26.72 Lacs at the end of the SIP tenure. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be around 20%.

Although it has been ranked No. 3 by CRISIL in its recent mutual fund ranking for the quarter ending Mar 31, 2016, Valueresearch has given it a higher rating of 4 Star.

Conclusion

In this article, we have seen how SIPs in large cap and diversified equity funds over the long term have created wealth for the investors. SIPs benefit from the power of compounding, and therefore the earlier we start our SIP, the greater is the potential for wealth creation. However, it is important to select a good fund for our SIPs. Your financial advisers can help you select a good fund that is suitable for your risk profile. As your risk profile changes over time, you should re-balance your portfolio to align with your risk profile. In our next post, we will discuss how SIPs in small and midcap funds have created wealth for the investors in the last 10 years. Stay in touch!

There are Many more Funds which have created Wealth over 15 Years !!!

https://www.advisorkhoj.com/articles/Mutual-Funds/How-SIPs-in-Top-and-Best-Diversified-Equity-Mutual-Funds-have-created-wealth?utm_source=Advisorkhoj+Newsletter&utm_campaign=0bca5fe512-Advisor_NewsLetter_27_05_20165_26_2016&utm_medium=email&utm_term=0_8af2b5b51e-0bca5fe512-224761661

Pillars of Successful Investing..

2016-04-14T00:26:00.003+05:30

Hello Investor... I would say hello Smart Investor... Cuz now a days anybody to everybody think him or herself as investor.. even person you have put money in chit funds, Fixed Deposits and so on, thinks herself as an Investor... are they really ?.. are their choice is really Smart.. ?

Well below is link of very wonderful and very insightful article... writer have written it, in keeping advisor at center but i believe this article if not more then equally important for SMART Investor.. !!!

Caution Note :- Please don't click on link if you are predominately Fixed Deposits or Post Office type Savers.. no you are not Investor don't fool your self..

http://cafemutual.com/news/business-development/419-3-pillars-to-strengthen-your-practice

https://drive.google.com/open?id=0B_1QhgAfkm4FY2Nxc2dOam95TDQ

Good EMI Vs Bad EMI

2016-01-06T15:37:00.000+05:30

Good Work by Franklin Team on Good EMI and Bad EMI surely do visit

https://image.e.frk.com/lib/fe9315707d66037a76/m/2/good-emi_2016.html

This Second link is on detail explanation about SIP as Good EMI.. do check that too..

https://image.e.frk.com/lib/fe9315707d66037a76/m/2/good-emi_2016.html

Successful Hedge Fund... Found solace in dissolving the fund.

2016-01-06T00:33:00.001+05:30

I'm reading Nevsky Newsletter 151231 on Scribd. Check it out: https://www.scribd.com/doc/294654490

From Pen of Benjamin Franklin

2015-12-29T13:54:00.004+05:30

From Pen of Benjamin Franklin

Women and wine, game and deceit, Make the wealth small, and the wants great.

’tis easier to suppress the first desire than to satisfy all that follow it. And ’tis as truly folly for the poor to ape the rich,as for the frog to swell, in order to equal the ox

the second vice is lying, the first is running in debt. And again to the same purpose, lying rides upon debt’s back

The borrower is a slave to the lender, and the debtor to the creditor, disdain the chain, preserve your freedom; and maintain your independency: be industrious and free; be frugal and free. At present, perhaps, you may think yourself in thriving circumstances, and that you can bear a little extravagance without injury; but, For age and want, save while you may; No morning sun lasts a whole day, as Poor Richard says. Gain may be temporary and uncertain, but ever while you live, expense is constant and certain; and ’tis easier to build two chimneys than to keep one in fuel, as Poor Richard says. So rather go to bed supperless than rise in debt.

You may think, perhaps, that a little tea, or a little punch now and then, diet a little more costly, clothes a little finer, and a little more entertainment now and then can be no great matter but remember what Poor Richard says “Many a little makes a mickle; beware of little expense for a small leak will sink a great ship.

Many a man thinks he is buying pleasure when he is really selling himself a slave to it.

There are three faithful friends – An old wife, an old dog, and ready money.

https://dl.dropboxusercontent.com/u/28494399/Blog%20Links/The%20Hedonic%20Treadmill.pdf

The Autocar Professional Dialogue With Rajiv Bajaj | Part 2

2015-12-29T12:44:00.001+05:30

Myths concerning risk

2015-09-24T12:44:00.001+05:30

Myths concerning risk

Myth: There is uniformity in how risk is viewed.

Myth: Risk tolerance is subject to market conditions.

Myth: Risk tolerance of an individual changes over time.

To burst this myths just click the link

http://www.morningstar.in/posts/34477/myths-concerning-risk.aspx?utm_campaign=portfolioplanning&utm_medium=email&utm_source=morningstar

Witty Wisdom on Investment

2015-09-22T00:31:00.001+05:30

Adding risky assets to a portfolio makes it riskier.... (Think One more time???)

–

One of Nobel prize-winner William Sharpe’s greatest contributions to investment theory came in the realization that if a portfolio holds only low-risk assets, the addition of a risky asset can make it safer. This happens because doing so increases the portfolio’s diversification and reduces the correlation among its components, reducing its vulnerability to a single negative development.

The level of risk in a portfolio can be kept low by applying a simple formulaic process

–

Rather, risk comes in many forms and they can be overlapping, contrasting and hard to manage. For example, as I said in “Risk Revisited,” efforts to reduce the risk of losing money invariably increase the risk of missing out on gains, and efforts to reduce fundamental risk by buying higher-quality assets often increase valuation risk, given that higher-quality assets often sell at elevated valuation metrics.

Regardless of the outlook for fundamentals or the relationship between price and value, many people sell in a downdraft because, well, you have to do something, and they feel it’s unreasonably passive to just sit there. But something about which I feel strongly is that it’s not the things you buy and sell that make you money; it’s the things you hold. Of course you have to buy things in order to hold them. But my point is that transactions merely adjust what you own, and engaging in them doesn’t necessarily increase potential profit. Sticking with what you own may be enough although it may not be easy in tough times.

There’s only one thing in the investment world that isn’t two edged, and that’s
“alpha”: superior insight or skill. Skill can help in both up markets and down markets.
And by making it more likely that your decisions are right, superior skill can increase the
expected benefit from concentration and leverage. But that kind of superior skill by
definition is rare and elusive. .

Why should superior profits be available to the novice, the untutored or the lazy?
Why should people be able to make above average returns without hard work and above
average skill, and without knowing something most others don’t know? And yet many
individuals invest based on the belief that they can. (If they didn’t believe that, wouldn’t
they index or, at a minimum, turn over the task to others?)

No, the solution can’t lie in rigid tactics, publicly available formulas or loss-eliminating
rules . . . or in complete risk avoidance. Superior investment results can only stem
from a better-than-average ability to figure out when risk taking will lead to gain
and when it will end in loss. There is no alternative.

Abstract from Oak Tree Memo.

From Other Source

It’s all risk-free until you realize the risk just came free.

I Term This Wonderful Economics...

2015-09-09T00:01:00.001+05:30

This Message I got on My WhatsApp... and I thought it Should be Shared...

Masterpiece on Economics :-

One day a tourist comes to the only hotel in a debt ridden town in Kenya. He lays a 100 dollar note on the table & goes to inspect the rooms.

Hotel owner takes the note & rushes to pay his debt to the butcher.

Butcher runs to pay the pig farmer.

Pig farmer runs to pay the feed supplier.

Supplier runs to pay the maid, who in these hard times gave her services on credit.

Maid then runs to pay off her debt to the hotel owner whom she borrowed from in these hard times.

Hotel owner then lays the 100 dollar note back on the counter.

The tourist comes down, takes his money & leaves as he did not like the rooms.

No one earned anything. But that group of people is now without debt & looks to the future with a lot of optimism.

And that is how the world is doing business today!

Worth a read..!!!

" I Would Say Worth Understanding.... "

Dark Side of Money...

2015-09-08T17:15:00.001+05:30

The Psychology of Money is one of most researched fields among Behavioral sciences. It is an objective assessment of financial resources that is available to every individual and the behavior that is triggered because of its presence. This is the side of money which is often outshines by the bright side of it. The presence of financial resources usually leads to any of these behavior:

Money Avoidance Disorder

This is a disorder when the owners of financial resources ignore the presence of money due to the fear of the loss or guilt because of the accumulated financial corpus.

Under spending: This could be a commonly occurring phenomenon when individuals have the tendency to spend much lesser than what is required to maintain a certain standards of living. They emphasize that the money not used is being “saved”.

While saving is a habit that is encouraged, it should not be at the cost of your personal harm or deprivation. If that is the scenario then it could be a case of under spending. It comes from a deep rooted sense of fear of loss.

Excessive Risk Aversion: A lot of investors come from a generation where financial means were limited. Hence, they had to make every penny count. In such a scenario they have been schooled to take non risk, unadventurous means of investment as a little less return was acceptable to complete loss of corpus.

This risk aversion stays despite improvement in financial conditions. Investors still have a tendency to stick to “safe investments” and not venture into “risky investments”. The tendency of investors even today is to avoid “unnecessary risks”

Financial Denial: This is an extreme situation when an individual falls under financial stress. They go to extent of avoiding any stimulus which may remind them or indicate their financial status. They particularly avoid looking at cheque books or listening to news about financial markets.

For example, if an investor lost heavily in the stock markets, he would avoid watching the news regarding the same because it would be a constant reminder of the loss. Upon recovery of the market he would further avoid the market because watching others make profits or the markets gaining all time high would be painful because of the personal financial loss.

Financial Rejection: Individuals with a low self esteem are often riddled with a sense of guilt when they accumulate money. Hence, they try and get rid of the money because they feel they do not deserve it. This leads to a rejection of their current financial situation.

Money Worshipping Disorder

These disorders are the opposite of avoiding money. There are individuals who would go to any extreme to deny the presence of money. There are individuals who are excessively attached to money. The attachment to money does not indicate the presence of money either in personal or bank accounts. It is an attachment to the idea of money and all that money can buy and provide. People with such disorders have a tendency to look for ways to get money to spend.

Compulsive Buying: This disorder is on the rise because of the presence of online shopping sites which gives the users a feel of the products virtually. This leads to an excessive need to shop and buy often leading to negative consequences like debt traps. Due to the rising trends in consumerism, one feels compelled to buy merely because we are presented with too many options.

Pathological Gambling: It is one such disorder, where an individual is faced with a constant urge to gamble. This also stems from over optimism on the part of the gambler who keeps on believing that winning is inevitable to justify the constant gambling bouts. These usually lead to adverse financial conditions, debt traps and a constant cycle of borrowings.

Workaholism: It is a state where an individual’s tax themselves to work extra hours and put in more effort that is usually required to accumulate more money. It reflects upon a state when someone measures their own self worth by their financial situation. In such a situation, being able to accumulate money becomes of prime importance. They equate life, living and lifestyle with money.

Hoarding: We all tend to be attached to our assets or our bank balances. However, there could come a point where you want to make your finances inseparable from you. You start to hoard money or valuable assets. There have been a few incidents which have been noticed among the affluent where they buy expensive diamonds and platinum which are placed in high security vaults only to have their name related to the purchase. They keep accumulating these expensive purchases to give their position an entitlement of being social influential and financially well off.

Relational Money Disorders

If you are a firm believer in the institution of family, then you might also know that the downfall of a relative affects the entire family. The affluence of another relative reflects well on the entire family. Money is one aspect that is known to spoil the strongest of relations and strengthen the weakest of them. Often time our financial situations starts to affect our behaviour among our family members. While it is a sign of social support to stand up for your family in times of need, an extreme execution of such behaviour is what is usually termed as a disorder.

Financial Infidelity: This is one such disorder which arises when you start taking decisions and making transactions without bringing it to the notice of your spouse or partner. You go to extra lengths to ensure that the financial transactions remain hidden. This disorder could arise from guilt of spending more than stipulated budget. Carrying out financial transactions without notice also gives a sense of power if the member feels like the submissive one in the personal relationship.

Financial Enabling: This refers to an extreme situation, where an individual in charge of financial means feels guilt for their affluence because of their poor relatives. They feel compelled to share their finances. However, it could reach a stage where the relatives in need are being helped out while the giver’s needs are ignored. Such a disorder could lead to reversal of personal fortunes. For example, during periods of recession the affluent relatives feel guilty that they have money and jobs while a relative lost everything in stocks. However, in extreme cases of helping out an individual is succumbing to financial enabling.

Conclusion

While you have been reading this you may have thought that you belong to some of these categories or you could possibly have the disorder. You will be surprised all of us tend to exert such behaviour, differing in the intensity. Some of us mildly overspend, some overspend and go bankrupt. All of us have the habit of hiding away money under the pretext of savings. It is only when this behaviour tends to reach an extreme spectrum do you need to look out for help. While money comes with the promise of reversal of fortune it also brings with its dark side. It is up to you which side your money you want to embrace.

Courtesy Priyanka Chakrabarty

"I believe is you have any such disorder then proper Wealth Planner or Financial Planner can be very much helpful to manage your finance effectively... As in Case we do not feel well with our health we sort help of Doctor, in same way Financial Planner or Manager can be helpful when one is over aggressive or very much passive.." - A J RAVAL

Another market crisis?

2015-09-03T15:34:00.001+05:30

Yet Very Useful Article from Mr. Damodaran... I personally Fan of his writing and teaching...

Another market crisis?

Aswath Damodaran is a professor of finance at the Stern School of Business, New York University. Here is an extract from his blog post – Another Market Crisis?

I would be lying if I said that I like down markets more than up markets, but I have learned to accept the fact that markets that go up will come down, and that when they do so quickly, you have the makings of a crisis.

I find myself getting more popular during these periods, as acquaintances, friends and relatives that I have not heard from in years seem to find me. They are invariably disappointed by my inability to forecast the future and my unwillingness to tell them what to do next, and I am sure that I move several notches down the Guru scale as a consequence, a development that I welcome.

For me, the first casualty in a crisis is perspective, as I find myself getting whipsawed with news stories about financial markets, each more urgent and demanding of attention than the previous one.

The second casualty is common sense, as my brain shuts down and my primitive impulses take over. Consequently, I find it useful to step back and look at the big picture, hoping to see patterns that help me make sense of the drivers of market chaos.

A market crisis brings out my worst instincts as an investor.

First out of the pack is fear pushing me to panic, with the voice yelling "Sell everything, sell it now", getting louder with each bad market day.

That is followed quickly by denial, where another voice tells me that if I don't check the damage to my portfolio, perhaps it has been magically unaffected.

Then, a combination of greed and hubris kicks in, arguing that the market is filled with naive, uninformed investors and that this is my time to trade my way to quick profits.

I cannot make these instincts go away, but I have my own set of rules for managing them. (I am not suggesting that these are rules that you should adopt, just that they work for me..)

Break the feedback loop

Being able to check your portfolio as often as you want and in real time, with our phones, tablets and computers, is a mixed blessing. I did check my portfolio this morning for the damage that the last week has done, but I don't plan to check again until the end of the week. If I find myself breaking this rule, I will consider sabotaging my wifi connection at home, going back to a flip phone or leaving for the Galapagos on vacation.

Turn off the noise

I read the Wall Street Journal and Financial Times each morning, but I generally don't watch financial news channels or visit financial websites. I become religious about this avoidance during market chaos, since much of the advice that I will get is bad, most of the analysis is after-the-fact navel gazing and all of the predictions share only one quality, which is that they will be wrong.

Rediscover your faith

In my book (and class) on investment philosophies, I argue that there is no "best' investment philosophy that works for all investors but that there is one for you, that best fits what you believe about markets and your personality.

My investment philosophy is built on faith in two premises, that every business has a value that I can estimate, and that the market price will move towards that value over time. During a crisis, I find myself returning to the core of that philosophy, to make sense of what is going on.

Act proactively and consistently

It is natural to want to act in response to a crisis. I am no exception and I did act on Monday, but I tried to do so consistently with my philosophy. I revisited the valuations that I have done over the past year (and you can find most of them on my website, under my valuation class) and put in limit buy orders on a half a dozen stocks (including Apple, Tesla and Facebook), with the limit prices based on my valuations of the companies.

If the crisis eases, none of the limit orders may go through, but I would have protected myself from impulsive actions that will cost me more in the long term.

If it worsens, all or most of the limit buys will be executed, but at prices that I think are reasonable, given the cash flow potential of these companies.

Will any of these protect me from losing money? Perhaps not, but I did sleep well last night and am more worried about whether the New York Yankees will score some runs tonight than I am about what the Asian markets will do overnight. That, to me, is a sign of health!

The silver linings

Just as recessions are a market economy's way of cleansing itself of excesses that build up during boom periods, a market crisis is a financial market's mechanism for getting back into balance. I know that is small consolation for you today, if you have lost 10% or more of your portfolio, but there are seedlings of good news, even in the dreary financial news:

Live by momentum, die by it

In trading, momentum is king and investors who play the momentum game make money with ease, but with one caveat. When momentum shifts, the easy profits accumulated over months and years can be wiped out quickly, as commodity and currency traders are discovering.

Deal or no deal?

If you share my view that slowing down in M&A deals is bad news for deal makers, but good news for stockholders in the deal-making companies, the fact that this crisis may be imperiling deals is positive news.

Rediscover fundamentals

My belief that first principles and fundamentals ultimately win out and that there are no easy ways to make money is strengthened when I read that carry traders are losing money, that currency pegs do not work when inflation rates deviate, and mismatching the currencies in which you borrow and generate cash flows is a bad idea.

The Market Guru Handoff

As with prior crises, this one will unmask a lot of economic forecasters and market gurus as fakes, but it will anoint a new group of prognosticators who got the China call right as the new stars of the investment universe.

If a market crisis is a crucible that tests both the limits of my investment philosophy and my faith in it, I am being tested and as with any other test, if I pass it, I will come out stronger for the experience.

At least, that is what I tell myself as I look at the withered remains of my investments in Vale and Lukoil!

Market crash: Silver lining in a gloomy cloud

2015-09-03T15:16:00.001+05:30

Cut from Mr. Singhania, CIO - Equity, Reliance Mutual Fund. Chat... fully Interview can be read on :- http://www.morningstar.in/posts/34293/2/market-crash-silver-lining-in-a-gloomy-cloud.aspx

Why we believe India is in a sweet spot compared to the rest of the world.

In the history of financial markets, there will be very few like India which offer such an edge over the rest of the world, both on a short- and long-term basis.

Sharp corrections should not always be viewed with negativity and gloom. In fact, sharp corrections with a structural uptrend offer compelling opportunities.

Sharp corrections (10-20%) are seen often within the structural uptrends witnessed in global as well as Indian equity markets.

We collated data and analysed similar corrections seen over the last 15 years.

A look at the table below confirms our stance and only goes to prove that they have been the best time to increase equity exposure.

Bull market phases in Indian equities and corrections (Sensex)

Source: Bloomberg

The above table highlights that there have been three bull phases (including the ongoing one) in Indian equities over the last 15 years. While markets rallied 7 times in the bull phase of 2003-08, there were few instances when the market corrected sharply (more than 15%).

However, in these cases, the market regained its previous peak in a short period of time (3-4 months). Data suggests that this is a typical characteristic of any bull market.

Market movement is not linear and corrections are inevitable in any bull run. Correction in a bull market is an opportunity to build positions.

Source: Bloomberg

Volatility is a part and parcel to investing. It is perceived to be negative but need not be. In general, it provides the right opportunity to build positions in otherwise great companies. To reiterate, it provides an excellent opportunity to increase allocation to equities.

Conclusion

Indian macros have never been better; oil at $43 and falling further , current and fiscal deficit trending lower, subsidy burden falling, inflation at multi-year lows and a falling interest rate environment.

On the reform and growth front, things can only improve from here.

Yes, it is taking time to get the economy kick-started, but the direction is clear and trending up.

Keep the faith and be positive!

Courtesy : MorningStar India.

Balanced Fund Category Beat Equity Category Yet Again...

2015-04-29T12:09:00.001+05:30

Category and benchmark returns (%) for quarter ended March 2015

Categories

	1 year absolute	2 years annualized	3 years annualized	5 years annualized
CRISIL – AMFI Large Cap Fund Performance Index	35%	27%	20%	13%
CRISIL – AMFI Income Fund Performance Index	15%	9%	10%	8%
CRISIL – AMFI Debt Fund Performance Index	12%	9%	9%	8%
CRISIL – AMFI Gilt Fund Performance Index	18%	9%	10%	8%
CRISIL – AMFI Short Term Debt Fund Performance Index	11%	9%	10%	9%
CRISIL – AMFI MIP Fund Performance Index	21%	14%	12%	10%
CRISIL – AMFI Balance Fund Performance Index	37%	27%	20%	14%

Some Interesting Facts... !!!

2015-03-25T12:48:00.000+05:30

Below Small Charts, Table and Write-ups are taken form different source, but all reflect one things ..

Can Anybody say what is that.. ?

The table below makes an interesting reading.

Source: NAV India, Data as on 31st December, 2014, Internal Calculations

To give you an example, for the 10 year period ended March 31, 2014, the Nifty index returned a compounded annual growth rate of 14.2%. This means that Rs 1 cr invested towards buying some Nifty index fund even would have resulted in the value becoming Rs 3.77 crs. In the same period some of the top performing equity funds and portfolio have generated in the range of 25% compounded. So Rs 1 cr invested towards owning some of these equity funds would have resulted in the value appreciating to Rs 9.3 crs! This has actually happened and there are at least 5 equity funds out there which have delivered this kind of result. Forget owning funds, as I mentioned before just owning Nifty would have resulted in quadrupling of the invested value.

Asset Allocation is the key to successful investing and surprisingly it is also the most neglected, as most of the attention is focused on timing, security selection, moving across funds etc.
Studies have suggested that in investing, upto 90% of returns and wealth over long periods are driven by asset allocation only and not by security selection or timing. - See more at: http://www.indiainfoline.com/article/news-top-story/equities-are-a-great-compounding-machine-india-has-great-growth-prospects-prashant-jain-114101400375_1.html#sthash.ed0qT4P8.dpuf

Asset Allocation is the key to successful investing and surprisingly it is also the most neglected, as most of the attention is focused on timing, security selection, moving across funds etc.
Studies have suggested that in investing, upto 90% of returns and wealth over long periods are driven by asset allocation only and not by security selection or timing.

The data below pertaining to two of long running funds highlights the low holding periods of mutual funds in general by the majority.

	AUM holding for more than
Scheme	3years	5years	10 years
HDFC Prudence Fund:	52%	23%	3%
HDFC Equity Fund	34%	15%	2%

Source: HDFC Mutual Fund, Data as on 31^st August, 2014

The data on above suggests:

Only ~2-3% of assets in equity funds are held for
more than 10 years

Only ~15-25% of assets in equity funds are held for
more than 5 years

Only ~30-50% of assets in equity funds are held for
more than 3 years

The following table gives the returns on CAGR basis and the risk as measured by Standard Deviation over 1, 3 and 5 years holding periods of Sensex, 1 year SBI Fixed Deposit (FD) and Gold in INR terms for the last 30 years:

in last 30years	SENSEX	FD @ SBI	GOLD
CAGR (%)	16%	9%	10%
Rs. 10,000 has become	9,12,496	1,22,434	1,84,990
Standard Deviation 1 yr period	58	2	14
Standard Deviation 3 yr period	22	2	8
Standard Deviation 5 yr period	15	2	7

Source: Bloomberg, 1 year FD rate has been taken for computation of FD returns; Data pertains from Mar 84 to Mar 14

The 'real' risk to your investments !

2015-01-13T13:41:00.000+05:30

Sharing is caring. Forward this email to spread investment wisdom and benefit your friends.

The 'real' risk to your investments

D. Muthukrishnan

Morgan Housel mentions two powerful points in his wonderful piece:

1. Remember what Wharton professor, Jeremy Siegel, says: "You have never lost money in stocks over any 20-year period, but you have wiped out half your portfolio in bonds (after inflation). So which is the riskier asset?"

2. In finance textbooks, "risk" is defined as short-term volatility. In the real world, risk is earning low returns, which is often caused by trying to avoid short-term volatility.

As you are aware, from the last few years, every April, we publish a comparative performance chart of various asset classes from 1979-80 to the current period. Between 1979-80 to 2013-14, i.e., for the last 35 years, fixed deposits have produced an annualised return of 8.41 per cent, and the Sensex has delivered annualised returns of 16.72 per cent (18.72 per cent, assuming a dividend yield of 2 per cent).

Let us assume that 35 years ago, you invested Rs.1 lakh each in a fixed deposit and in the Sensex. As on March 31, 2014, your fixed deposit will be worth Rs. 16.94 lakh and the Sensex will be worth Rs. 2.23 crore. Before we feel happy about the above returns, we have to understand that the average inflation rate for the above period is 7.57 per cent.

Real rate of return = Nominal returns - Inflation

So, the real rate of return for a fixed deposit is a meagre 0.84 per cent, and for the Sensex is 9.15 per cent (around 11 per cent including dividend yield). So, your investment of Rs. 1 lakh in both a fixed deposit and the Sensex 35 years ago, after adjusting for inflation, is ‘really’ worth the following:

Fixed Deposit - Rs. 1.07 lakh
Sensex- Rs. 14.20 lakh

Since fixed deposits are taxed every year on accruals, you would not have even got the real return of 0.84 per cent; instead, you would be sitting on a negative return. Your Rs. 1 lakh investment would be even lesser than the capital value, whereas the Sensex, even after inflation, would multiply your wealth by 14 times. There is no tax on long term capital gains. Though it looks like a fixed deposit has multiplied your wealth by 17 times, in terms of purchasing power, it has actually eroded your capital.

Even the Sensex, which appears to have multiplied your wealth by 223 times, has actually done so ‘only’ by 14 times, if you take purchasing power into account. Many people, especially with real estate and gold, have no clue about annualised return, inflation adjusted return, impact of transactional cost and taxes, etc. But you must remember - what we think as what we are earning, and what we are actually earning is not one and the same.

The real risk is not the short term volatility you see the in stock markets. The real risk is capital erosion due to returns eaten away by inflation and taxes. So, for all long term requirements, you need to invest in instruments which beat inflation handsomely and are also tax efficient.

In the above example, equities have beaten inflation by around 9 per cent, and also given that return absolutely tax free. What more can one ask for? So, please understand that risk is not short term volatility, but long term erosion of capital.

Fixed deposits are not volatile but they erode capital and reduce your purchasing power. Equities are volatile but they multiply capital and increase your purchasing power.

Choose wisely for the long run.

I am Investor - Investor Manifesto

2015-01-12T12:30:00.001+05:30

Read it. Print it. Frame it. Face it. Remember it. Do it.

This was Successful Investor Do...

Letter on New Year Eve... with Outstanding Portfolio Performance

2015-01-01T12:07:00.001+05:30

Cut from the letter sent to our Investors and Members... on New year eve...

Dear Investor / Member,

Another year would come to an end in few hours... and New Year will Start... as such it will only change number from 2014 to 2015 for time which is running from eternity, but if we look deep into past year and if we just put little effort to understand unfolding events lined up in coming year then, I think we would be benefited by great wisdom.

I personally believe 2014 will be marked as one of the very important year in history of Morden India. It would not only be remarkable year in field of Investments and FII flow, but above all year will be marked as major change in political, economical and social sift which was driven by people of India.

In forefront we may see this year as Modi Victory year's, Complete majority after 30 year's and so on but I would say this change in attitude and altitude was driven by people of India, and I believe this change is happing for good. I am optimistic about Indian economy and its entrepreneurship skills which I think will bring prosperity with price stability.

Well in my April 2014 mail I have said Sensex can reach 35K in 3 year... Which I think could happen earlier... :)

with this I am attaching real trading performance of my model portfolio. Our philosophy is very simple, We give utmost importance to risk management and work for consistence absolute positive return irrespective of market condition, Which I believe we are doing very well till date. and I promise my fellow member who have entrust us with there hard earn money, that we will continue to do so.

I believe with proper financial planning you can avoid harsh twilight year of your life..

2015-01-01T12:05:00.001+05:30

I believe with proper financial planning you can avoid harsh twilight year of your life.. - A J Raval (Alchemist)