Early trends of 2019 election vote counting are showing clear majority for BJP. Exit polls were right this time. Congress paid the price of its Ego and family politics. They could have made alliances with several regional parties like in UP, they could have joined the Mahagathbandhan. But their overconfidence and ego came in between. They bring Priyanka Gandhi at last moment as if she is a magician and can turn things upside down.
Post-election it is easier to criticise but Congress need to understand root cause of their successive shameful failures. Root cause is that Congress do not have suitable Prime ministerial candidate. Just few months ago Congress won elections in three states because RaGa was not fighting for CM from there. Even today, when Ra Ga has improved himself and can face media independently his “Pappu” image is not leaving him. No one has courage to take Rahul Gandhi name when someone ask question-who will be next PM if not Modi?
Mr. Modi is a Hero for powerless peoples. He is a match maker for business tycoons. He has amazing art of adaptation. He keeps his mission above himself. There is no limit that he cannot cross and there is no trick that he cannot use to achieve his mission.
We can continue to blame EVM hacking for election results;
however, it is quite clear that India has changed considerably in last one decade.
Pseudo secularism is haunting Congress. They let RSS to grow exponentially. Now when RSS has poisoned millions of minds
towards Hindu Rashtra and have accumulated lot of resources, it is very
difficult for any other party to win in elections.
Congress desperately needs a better face. Someone like Shashi Tharoor will be a great choice. Rahul Gandhi must accept his defeat and must give chance to another leader to come up as a PM candidate in 2024 elections if that election ever happened!
On other hand, Mr. Modi is looking more humbled and talking more sensibly about 130 Crore Indians after getting unimaginable victory yet another time. I hope Modi-2 will be far better than Modi-1 and India will prosper and progress in coming years as expected by more than a billion Indians.
There are two ways of investing in Mutual funds:
- Lump sum Investment
- SIP (Systematic Investment Plan)
Above two methods are used by most of new investors. If you do not have big amount of money in your hand, you must opt for SIP where you can start monthly investment as low as Rs.500. whereas if you already have money at your disposal, you can invest as lump sum. In lump sum investment you will start getting profit/loss on whole amount from day one. Whereas in SIP, as your initial investment will be very small, thus, you will gain very small or insignificant return till you accumulate big amount after several months.
Talking about advantage of SIP, SIP average
out the risk of share market as you keep investing regularly.
Both SIP and lump sum has their own advantages. Is there any method by which you can take advantage of both the world?
Answer is yes, and this is the reason why I
am writing this blog. This method is
called STP-Systematic transfer plan. Suppose you have a lump-sum amount and you
want to reduce risk by investing through SIP. In this case STP is best
First you choose two funds from same
company. Invest your full amount in first fund which has zero exit loads. Using
fixed monthly withdrawal through STP
option you can invest in second fund as SIP. In this way, you will be able to
earn return on both the mutual funds.
Suppose I am having two mutual fund schemes
from Aditya Birla mutual fund namely:
- Aditya Birla Sun Life Low Duration – Direct –
- Aditya Birla Tax relief 96
First fund has zero exit load, so I will park my lumpsum in first fund and I will opt from STP which I will use as SIP for second fund. In this way I will earn return on both the funds.
1) Names of mutual funds mentioned are only for example and are not any recommendation to buy or sell.
Mutual Fund investments are subject to market risk. Please read the offer document
carefully before investing
Some of us do regular investment in mutual funds, PPF accounts, FD and in some other such instruments to earn passive income. However, there is another type of investment which can give us better returns than any other investment.
This best investment is one where you invest in your own
skill development. Here, you can generate several times more return than ordinary
investment. Unfortunately, most of us never think about this investment and
they have to settle for 10-15% profits.
World is changing very fast. Everyday new technologies are
replacing old one. Investing in you is not only rewarding but also necessary.
Learn new methods used in your industry, attend seminars, read good books
daily, watch YouTube video’s and utilise your free time in creative habits like
exercise, playing outdoor games, networking, meeting people etc.
Your health and your knowledge are your best investment.
Keep investing to gain best results.
Indian stock market is as sentimental as Indians themselves. Even a small negative news can cause huge panic in market. Big players and well-informed investors exit at high price immediately and buy shares at low price later. Whereas, small investors who want to make one time investment and become rich in short span of time mostly suffer losses. One very important fact about share market is that, it is a zero sum game. Your loss is someone else’s profit. Those who buy shares based on reccomondations and speculations mostly lose money. If you do not know much about share market, it is better to invest through mutual funds which are managed by fund managers.
In long term, any passive investment does not yield more than 9% profit in India. Property rates are going down, maximum rental income is between 5 to 8% and interest rate on FD are between to 5 to 8%. However, share market is booming from last 10 years. Share market can give you better profit if you invest smartly.
To minimize risk and to gain more than 10% return (subject to market risk), Mutual funds are good investment for the long term. They restrict your losses within a narrow band. For low risk and low return of 8% to 12%, you can invest in mix funds known as balanced funds (debt +equity). If you are willing to take moderate risk, and want better returns (if market does not crash abruptly), opt for large and midcap or Multi-cap equity funds. In multicap funds, fund manager has more freedom to choose shares from different catagory. However, recently SEBI has restricted this freedon by making it compulsory for each multicap fund to have 33% exposure in small cap and 33% in mid caps. Small cap equity funds are associated with high risk and high return. It is better to avoid pure small cap fund in short term investment.
If you want to avoid high expense ratio, always buy direct mutual funds. Regular funds always have around 1% higher expense ratio, which can cost you huge amount of money in long term. In addition, direct Index funds are even better having expense ratio around 0.5% or even lesser.
Important terms used in Mutual fund market.
- NAV: NAV stands for net asset value. It is the value of one unit of Mutual fund. Higher NAV does not mean over price of units like in stock market. It means Mutual fund performance is good and it is more famous with investors so they are investing more money.
- AUM: asset under management. It is the total amount of money managed under particular scheme.
- Expense Ratio: It is nothing but fund management charges. Lesser is better.
- S.I.P.: Systematic investment plan. It refers to monthly investment of money in any Mutual fund. You can invest even Rs500 per month in some funds. In this case, your SIP will be Rs500.
- Lump sum: One time investment.
If you do not have big amount of money to invest, then SIP is the best way to start investing in mutual fund as it average out your risk and profit. Do not wait till you save money to invest one time. Start SIP as early in your life as possible. Read my previous blog to understand benefit of starting early by clicking here.